# EDGAR Filing Document

**Accession Number:** 0001095146
**File Stem:** 0001683168-25-008493
**Filing Date:** 2025-11
**Character Count:** 484549
**Document Hash:** f9ab483b8e667bc445035a0a57da2075
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001683168-25-008493.hdr.sgml**: 20251117

**ACCESSION NUMBER**: 0001683168-25-008493

**CONFORMED SUBMISSION TYPE**: 424B3

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20251117

**DATE AS OF CHANGE**: 20251117

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Athena Bitcoin Global
- **CENTRAL INDEX KEY:** 0001095146
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 870493596
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 424B3
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288284
- **FILM NUMBER:** 251491606

**BUSINESS ADDRESS:**
- **STREET 1:** 800 NW 7TH AVENUE
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33136
- **BUSINESS PHONE:** 312-690-4466

**MAIL ADDRESS:**
- **STREET 1:** 800 NW 7TH AVENUE
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33136

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Athena Bitcoin Global, Inc.
- **DATE OF NAME CHANGE:** 20210226

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GAMEPLAN INC
- **DATE OF NAME CHANGE:** 19990916

**Filed Pursuant to Rule 424(b)(3)**

**Registration No. 333-288284**

**Prospectus Supplement No. 2**

**(to Prospectus dated July 2, 2025)**

**473,874,346 Shares of Common Stock**

![A logo with an owl AI-generated content may be incorrect.](image_001.jpg)

This prospectus supplement updates, amends, and supplements the prospectus dated July 2, 2025 (as amended and supplemented, the "<u>Prospectus</u>"), which forms a part of our Registration Statement on Form S-1 (Registration No. 333-288284).

This prospectus supplement is being filed to update, amend, and supplement the information in the Prospectus with the information contained in (a) our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "<u>SEC</u>") on September 10, 2025 (the "<u>Current Report</u>"), and (b) our Quarterly Report on Form 10-Q, for the quarter ended September 30, 2025, as filed with the SEC on November 13, 2025 (the "<u>Quarterly Report</u>"), each as more fully described below. Accordingly, we have attached the Current Report and Quarterly Report to this prospectus supplement.

This prospectus supplement is not complete without the Prospectus. This prospectus supplement should be read in conjunction with the Prospectus, which is to be delivered with this prospectus supplement, and is qualified by reference thereto, except to the extent that the information in this prospectus supplement updates or supersedes the information contained in the Prospectus. Please keep this prospectus supplement with your Prospectus for future reference.

We are an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended, and are subject to reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

Our common stock is quoted on the OTCID Market maintained by OTC Markets under the symbol "ABIT". On November 14, 2025, the last reported sale price for our common stock as reported on the OTCID Market was $0.015 per share. You are urged to obtain current market quotations for the common stock.

**INVESTING IN OUR SECURITIES INVOLVES SUBSTANTIAL RISKS. SEE THE SECTION TITLED "RISK FACTORS" BEGINNING ON PAGE 21 OF THE PROSPECTUS TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING OUR SECURITIES.**

**NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.**

**The date of this prospectus supplement is November 17, 2025.**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **September 4, 2025**

**<u>ATHENA BITCOIN GLOBAL</u>**

(Exact Name of Registrant as Specified in its Charter)

---

| | | |
|:---|:---|:---|
| **Nevada** | **333-262629** | **87-0493596** |
| (State or Other Jurisdiction<br> of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

---

---

| | |
|:---|:---|
| **1 SE 3rd Avenue Suite 2740**<br> **Miami, Florida** | **33131** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **(312) 690-4466**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 1.01 Entry into a Material Definitive Agreement.**

The information and description of the Settlement Agreement in <u>Item 1.02</u> below is incorporated by reference into this <u>Item 1.01</u> in its entirety.

**Item 1.02 Termination of a Material Definitive Agreement.**

On September 4, 2025, Athena Bitcoin, Inc. (the "<u>Athena</u>"), the wholly-owned subsidiary of Athena Bitcoin Global (the "<u>Company</u>"), entered into a Release and Termination Agreement ("<u>Settlement Agreement</u>") with Taproot Acquisition Enterprises, LLC ("<u>Taproot</u>"), William Mgt LLC ("<u>William Mgt</u>"), BTML, LLC ("<u>BTML</u>") and PSBC, LLC ("<u>PSBC</u>" and together with BTML, William Mgt and Taproot, the "<u>Taproot Parties</u>").

The Settlement Agreement terminated certain prior agreements between the parties and allowed for a buyout of Athena's obligations under such prior agreements, streamlining such obligations, releasing liens, providing for Athena's immediate ownership of ATMs and source code, and eliminating prior revenue sharing and equipment financing mechanics, as discussed in greater detail below.

Taproot and Athena are parties to various agreements pursuant to which, among other things, Taproot agreed to sell, and Athena agreed to purchase, certain of Taproot's interests in Bitcoin ATMs, including: (i) that certain Equipment Financing Agreement dated November 2, 2023 (the "<u>November 2nd Agreement</u>"); (ii) that certain Equipment Financing Agreement dated December 31, 2023 (the "<u>December 31st Agreement</u>"); and (iii) that certain Equipment Financing Agreement dated February 23, 2024 (the "<u>February 23rd Agreement</u>" and together with the November 2nd Agreement and the December 31st Agreement, collectively, the "<u>Equipment Financing Agreements</u>"), and certain of the Taproot Parties and the Company are also party to certain other agreements including an intercreditor agreement dated November 1, 2023, of which KGPLA Holdings LLC, an entity in which Mike Komaransky, a former director and principal shareholder of the Company has a controlling interest is also a party; an omnibus equipment refinancing agreement dated October 30, 2024; an equipment financing agreement dated October 30, 2024; a client services agreement dated April 26, 2024; and a development services agreement dated July 24, 2025 (collectively, all such agreements, as amended from time to time, the "<u>Taproot Agreements</u>").

Pursuant to the Settlement Agreement: (a) Athena and the Taproot Parties agreed to terminate all Taproot Agreements as of September 4, 2025, and release all obligations with respect thereto upon the terms and conditions set forth therein provided, provided however that such termination and release does not apply to, and shall expressly exclude, any third-party claims and/or litigation which would be indemnifiable under such Taproot Agreements and of which the other party had actual knowledge of as of the date of the Settlement Agreement; and (b) Athena agreed to pay the Taproot Parties $9,031,578 as a buyout of existing liabilities owed by Athena to Taproot, payable in tranches over twelve months. Athena may, in its sole discretion, prepay the amounts due pursuant to the Settlement Agreement and if it prepays such amount in full, may receive discounts for early repayment. In the event any amount due to the Taproot Parties is not timely paid, the entire balance of payments shall become immediately due and payable. The Taproot Parties also agreed to release all liens and security interests on Athena's assets, provide Athena ownership of all technology, source code and Bitcoin ATMs covered by Taproot, pending the satisfaction of certain conditions precedent.

The Settlement Agreement includes mutual releases of the parties thereto, and customary ongoing confidentiality requirements and non-disparagement obligations and provides that the Taproot Parties are subject to a three-year non-solicitation, non-compete and non-circumvention requirement in favor of Athena, subject to certain exceptions.

No material early termination penalties were incurred by the Company or Athena in connection with the entry into the Settlement Agreement.

The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Settlement Agreement attached as <u>Exhibit 10.1</u> to this Current Report on Form 8-K and incorporated by reference into this Item <u>1.02</u>.

**Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.**

The information set forth above in <u>Item 1.02</u> of this Current Report with respect to the Settlement Agreement and more specifically, the payments due under the Settlement Agreement, is hereby incorporated by reference into this <u>Item 2.03</u> in its entirety.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| 10.1\*♦ | [Release and Termination Agreement dated September 4, 2025, by and between Athena Bitcoin, Inc., Taproot Acquisition Enterprises, LLC, William Mgt LLC, BTML, LLC and PSBC, LLC](https://www.sec.gov/Archives/edgar/data/1095146/000168316825006824/athenabitcoin_ex1001.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed herewith.

♦ Certain schedules, annexes and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished. Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets ("[\*\*\*]") because the identified confidential portions (i) are not material and (ii) the Company customarily and actually treats that information as private or confidential.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Athena Bitcoin Global** | **Athena Bitcoin Global** |
|  | By: | */s/ Matias Goldenhörn* |
| Date: September 10, 2025 | Name: | Matias Goldenhörn |
|  | Title: | Chief Executive Officer |

---

[**Table of Contents**](#q3_001)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D. C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2025**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**Commission file number: 333-262629**

![](image_003.jpg)

**Athena Bitcoin Global**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **87-0493596** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **1 SE 3rd Avenue, Suite 2740**<br> **Miami, Florida**  | **33131** |
| (Address of principal executive offices) | (Zip Code) |

---

**(312) 690-4466**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2025, 4,095,009,545 shares of common stock, par value $0.0001 per share, were issued and outstanding.

**ATHENA BITCOIN GLOBAL AND SUBSIDIARIES**

**FORM 10-Q** 

**FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025**

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| | | **Page** |
| [Glossary of Bitcoin and Crypto Terms](#q3_002) | [Glossary of Bitcoin and Crypto Terms](#q3_002) | 3 |
| [Cautionary Note Regarding Forward-Looking Statements](#q3_003) | [Cautionary Note Regarding Forward-Looking Statements](#q3_003) | 6 |
| PART I | [FINANCIAL INFORMATION](#q3_004) |  |
| ITEM 1. | [Financial Statements](#q3_005) | 7 |
|  | [Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024](#q3_006) | 7 |
|  | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)](#q3_007) | 9 |
|  | [Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited)](#q3_008) | 10 |
|  | [Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)](#q3_010) | 12 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#q3_010) | 13 |
| ITEM 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#q3_011) | 40 |
| ITEM 3. | [Quantitative and Qualitative Disclosures About Market Risk](#q3_012) | 59 |
| ITEM 4. | [Controls and Procedures](#q3_013) | 59 |
| PART II | [OTHER INFORMATION](#q3_014) |  |
| ITEM 1. | [Legal Proceedings.](#q3_015) | 60 |
| ITEM 1A. | [Risk Factors.](#q3_016) | 60 |
| ITEM 2. | [Unregistered Sales of Equity Securities and Use of Proceeds.](#q3_017) | 106 |
| ITEM 3. | [Defaults Upon Senior Securities.](#q3_018) | 106 |
| ITEM 4. | [Mine Safety Disclosures.](#q3_019) | 106 |
| ITEM 5. | [Other Information.](#q3_020) | 106 |
| ITEM 6. | [Exhibits.](#q3_021) | 107 |
| [Signatures](#q3_022) | [Signatures](#q3_022) | 108 |

---

**GLOSSARY OF BITCOIN AND CRYPTO TERMS**

The following are abbreviations, acronyms and definitions of certain terms used in this document, which are commonly used in our industry:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Address**: An alphanumeric reference to where crypto assets can be sent or stored.

· **Athena Bitcoin Affiliates Program** provides Bitcoin ATM operators with a turnkey solution, offering software, compliance support, cash management, and marketing services to streamline operations and maximize profitability. This turnkey solution is for participating independent Bitcoin ATM operators ("Affiliates") who will be able to leverage the Company's established platform and services to manage their own Bitcoin ATMs more efficiently. See ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Business Overview and Recent Events for a description of the Affiliates program.

· **Bitcoin (BTC):** The first system of global, decentralized, scarce, digital money as initially introduced in a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto. Bitcoin, while having several of the primary attributes of money, is not considered a currency or money in the jurisdictions that the Company operates, with the exception of El Salvador where it is considered legal tender.

· **Bitcoin ATM**: A kiosk that can be used by a Customer to buy or sell bitcoin or other crypto assets in exchange for Cash.

· **Bitcoin Cash (BCH)**: A fork of Bitcoin that seeks to add more transaction capacity to the network in order to be useful for everyday transactions. BCH is based on the original Bitcoin blockchain with some distinct differences. A major one is an increased maximum block size of 32MB, compared to just 1MB on Bitcoin. Increased block size allows BCH to process transactions faster than Bitcoin, with lower fees and an increased per-second transaction capacity.

· **Block**: A grouping of Transactions validated by Miners and disseminated by the Network to servers that maintain the records in a blockchain. Blocks are added to an existing blockchain as transactions occur on the network. Miners are rewarded for "mining" a new block.

· **Blockchain**: A cryptographically secure digital ledger that maintains a record of all transactions that occur on the Network and follows a consensus protocol for confirming new Blocks to be added to the blockchain.

· **Cash**: The physical specie or banknotes of a sovereign country including the U.S. Dollar and other countries that issue Fiat Currency in paper formats.

· **Chivo**: CHIVO, Sociedad Anonima de Capital Variable, a private company incorporated under the laws of the Republic of El Salvador, which is politically controlled by the Government of El Salvador (GOES), is the official Bitcoin service provider of the Government of El Salvador. Chivo's platform is used to support the use of Bitcoin as legal tender in the country. The platform facilitates the exchange of Bitcoin and U.S. Dollar between users and their counterparties. The Chivo brand, which is the exclusive property of CHIVO, Sociedad Anonima de Capital Variable, is used across multiple products and services including a mobile wallet (Chivo wallet), integrated ATM (Chivo ATMs) and point-of-sale ("POS") terminals.

· **Cold storage:** The storage of private keys in any fashion that is disconnected from the internet. Common cold storage examples include offline computers, USB drives, or paper records.

· **Confirmation**: A Bitcoin or similar transaction is considered confirmed when it is included in a new Block in the Blockchain. Each time another Block is appended to the chain, the Transaction is confirmed again.

· **Crypto:** A broad term for any cryptography-based market, system, application, or decentralized network.

· **Cryptocurrency**: Bitcoin and alternative coins, or 'altcoins'. This category of crypto asset is designed to work as a medium of exchange, store of value, or to power applications and excludes security tokens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Customer**: A retail user of our Bitcoin ATMs or client of one of our other services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Customer Buying**: When a Customer acquires Bitcoin or another crypto asset in exchange for Cash or a Wire Transfer. In these transactions, the Company is selling Bitcoin or the crypto asset and acquiring Fiat Currency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Customer Selling**: When a Customer acquires Fiat Currency, via either Cash or a Wire Transfer from the Company, in exchange for Bitcoin or another crypto asset. In these transactions, the Company is acquiring Bitcoin or another crypto asset in exchange for Fiat Currency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Crypto Asset or Digital Asset**: Bitcoin and alternative digital forms of money, or 'altcoins,' launched after the success of Bitcoin. This category of crypto asset is designed to work as a medium of exchange, store of value, or to power applications. The term "altcoins" is inclusive of Ethereum, Litecoin, Tether and Bitcoin Cash.

· **Ethereum (ETH):** A decentralized global computing platform that supports smart contract transactions and peer-to-peer applications, or "Ether," the native crypto assets on the Ethereum network.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Fiat Currency**: The currency issued by a sovereign government or bloc including the U.S. Dollar, Argentine Peso, or Euro.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Fork**: A fundamental change to the software underlying a blockchain which results in two different blockchains, the original, and the new version. In some instances, the fork results in the creation of a new token.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Hot Wallet**: A wallet that is connected to the internet, enabling it to broadcast transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Mining**: The process by which new blocks are created, and thus new transactions are added to the blockchain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Network**: The collection of all Miners and Nodes that use computing power to maintain the ledger and add new blocks to the blockchain. Most networks are decentralized, reducing the risk of a single point of failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Node**: A server that maintains a record of the blockchain and can communicate with other Nodes on the Network to propagate new Transactions. Nodes can also maintain wallets and safeguard Private Keys.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Protocol**: A type of algorithm or software that governs how a blockchain operates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Public key or private key**: Each public address has a corresponding public key and private key that are cryptographically generated. A private key allows the recipient to access any funds belonging to the address, similar to a bank account password. A public key helps validate transactions that are broadcasted to and from the address. Addresses are shortened versions of public keys, which are derived from private keys.

· **Stable Coin:** A Token issued for the purpose of maintaining a constant value relative to a Fiat Currency, most commonly the U.S. Dollar. Examples include Tether, USDC, Dai, BinanceUSD or GUSD. Many of these operate as un-regulated money market fund equivalents. Stable coins are a popular method to transfer funds between exchanges without taking price risk.

· **Tether (USDt):** A blockchain-based cryptocurrency whose tokens in circulation are backed by an equivalent amount of U.S. dollars, making it a stable coin with a price pegged to U.S. Dollar $1.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Token:** A unit of a crypto asset or other instrument secured by and recorded on a blockchain. Tokens could include the primary units of a blockchain as in Ethereum or Bitcoin, or be a separate construct whose ownership is recorded using such a blockchain as in an ERC-20 Token, whose ownership might convey any number of properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Transaction:** The transfer of Bitcoin or a crypto asset from one Address to one or more Addresses. The Transaction is validated by Nodes and Miners according to the Protocol and specifically must be signed using the private key of the sending Address to be included in a block, whereby it becomes Confirmed.

· **Wallet**: A place to store public and private keys for crypto assets. Wallets are typically software, hardware, or paper-based.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Wire Transfer**: A permanent inter-bank transfer on a national or international settlement system including the Fedwire system in the United States or the SWIFT international system but excluding non-permanent systems like ACH (Automated Clearing House, a computer-based network that allows financial institutions to electronically process transactions).

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q ("Report"), including "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements, within the federal securities laws, regarding future events and the future results of Athena Bitcoin Global (the "Company") that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company. Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

All forward-looking statements reflect our current views as of the date of the filing of this Report. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in, or suggested by, the forward-looking statements we make in this Report are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Report. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Factors that might cause or contribute to such differences include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our future financial performance, including our expectations regarding our revenue, operating expenses, and our ability to achieve and maintain future profitability;

· our business plan and our ability to effectively manage our growth;

· anticipated trends, growth rates, and challenges in our business, the crypto economy, and in the markets in which we operate;

· market acceptance of our products and services;

· beliefs and objectives for future operations;

· our ability to further penetrate our existing customer base and maintain and expand our customer base;

· our ability to develop new products and services and grow our business in response to changing technologies, customer demand, and competitive pressures;

· our expectations concerning relationships with third parties;

· our ability to maintain, protect, and enhance our intellectual property;

· our ability to continue to expand internationally;

· the effects of increased competition in our markets and our ability to compete effectively;

· future acquisitions of or investments in complementary companies, products, services, or technologies and our ability to successfully integrate such companies or assets;

· our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

· economic and industry trends, projected growth, or trend analysis;

· trends in revenues, cost of revenues, and gross margin;

· trends in operating expenses, including technology and development expenses, sales and marketing expenses, and general and administrative expenses, and expectations regarding these expenses as a percentage of revenue;

· increased expenses associated with being a public company;

· other risks and uncertainties, including those described under Risk Factors, herein; and

· other statements regarding our future operations, financial condition, and prospects and business strategies.

All forward-looking statements and projections attributable to us or persons acting on our behalf apply only as of the date of this Report and are expressly qualified in their entirety by the cautionary statements included in this Report. We undertake no obligation to publicly update or revise any written or oral forward-looking statements made by us or on our behalf, including any of the projections presented herein, to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

**PART I – FINANCIAL INFORMATION**

**Item 1.** **Financial Statements**

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Balance Sheets

*(in thousands, except number of shares)*

 

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| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025**<br> **(Unaudited)** | **December 31,**<br>**2024**<br> **(Audited)** |
| Assets |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, net | $14558 | $17506 |
| &nbsp;&nbsp;&nbsp;Restricted cash held for customers | 2846 | 122 |
| &nbsp;&nbsp;&nbsp;Crypto assets held, net | 2208 | 1241 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 3114 | 1339 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2151 | 2702 |
| Total current assets | 24877 | 22910 |
| Property and equipment, net | 14349 | 16245 |
| Software development, net | 4295 | 5239 |
| Right of use assets – operating leases | 33651 | 33613 |
| Other noncurrent assets | 56 | 26 |
| Total assets | $77228 | $78033 |
| Liabilities and stockholders' equity |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $7637 | $11133 |
| &nbsp;&nbsp;&nbsp;Accounts payable, related-party | 457 | 818 |
| &nbsp;&nbsp;&nbsp;Liability for cash held for customers | 2846 | 122 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current portion | 10753 | 9627 |
| &nbsp;&nbsp;&nbsp;Equipment notes payable, current portion |  | 3084 |
| &nbsp;&nbsp;&nbsp;Short-term debt | 5710 | 256 |
| &nbsp;&nbsp;&nbsp;Convertible debt, related-party | 3000 |  |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 340 | 376 |
| Total current liabilities | $30743 | $25416 |

---

 

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Balance Sheets, Continued

*(in thousands, except number of shares)*

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025**<br> **(Unaudited)** | **December 31,**<br>**2024**<br> **(Audited)** |
| Long-term liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, net of current portion | $22898 | $23986 |
| &nbsp;&nbsp;&nbsp;Equipment notes payable, net of current portion |  | 3344 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities, net | 695 | 914 |
| &nbsp;&nbsp;&nbsp;Convertible debt, related-party | – | 3000 |
| Total long-term liabilities | 23593 | 31244 |
| Total liabilities | 54336 | 56660 |
| Commitments and contingencies (Note 15) | **–** | **–** |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.001 par value 5,000,000,000 shares authorized; No shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively. |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value 10,000,000,000 shares authorized; 4,095,009,545 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively. | 4095 | 4095 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 11982 | 11982 |
| &nbsp;&nbsp;&nbsp;Accumulated income | 7092 | 5537 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (277) | (241) |
| Total stockholders' equity | 22892 | 21373 |
| Total liabilities and stockholders' equity | $77228 | $78033 |

---

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

*(in thousands, except number of shares)*

 

 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the nine months ended** | **For the nine months ended** |
|  | **September 30,** <br> **2025** | **September 30,** <br> **2024** | **September 30,** <br> **2025** | **September 30,** <br> **2024** |
| Revenues | $57414 | $69406 | $192852 | $221737 |
| Cost of revenues | 50205 | 61322 | 169730 | 190108 |
| &nbsp;&nbsp;&nbsp;Gross profit | 7209 | 8084 | 23122 | 31629 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Technology and development | 431 | 376 | 1281 | 904 |
| &nbsp;&nbsp;&nbsp;General and administrative | 3234 | 2689 | 9698 | 7356 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 423 | 542 | 1426 | 1424 |
| &nbsp;&nbsp;&nbsp;Other operating expense | 254 | 349 | 1070 | 767 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 4342 | 3956 | 13475 | 10451 |
| Income from operations | 2867 | 4128 | 9647 | 21178 |
| &nbsp;&nbsp;&nbsp;Interest expense | 170 | 201 | 702 | 1698 |
| &nbsp;&nbsp;&nbsp;Fees on virtual vault services | 403 | 451 | 1240 | 1557 |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 4602 |  | 4602 |  |
| &nbsp;&nbsp;&nbsp;Other (income) expense | 746 | (3) | 744 | 107 |
| Income (loss) before income taxes | (3054) | 3479 | 2359 | 17816 |
| &nbsp;&nbsp;&nbsp;Income tax expense (benefit) | (603) | 1224 | 804 | 5609 |
| Net income (loss) | $(2451) | $2255 | $1555 | $12207 |
| Basic earnings (loss) per share | $(0.00060) | $0.00057 | $0.00038 | $0.00307 |
| Diluted earnings (loss) per share | $(0.00060) | $0.00052 | $0.00040 | $0.00278 |
| Weighted average shares outstanding - Basic | 4095009545 | 3975611408 | 4095009545 | 3975611408 |
| Weighted average shares outstanding - Diluted | 4095009545 | 4456401260 | 4345009545 | 4462165814 |
| Comprehensive income |  |  |  |  |
| Net income (loss) | $(2451) | $2255 | $1555 | $12207 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment, net of tax | (39) | 2 | (36) | (17) |
| Comprehensive income (loss) | $(2490) | $2257 | $1519 | $12190 |

---

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

*(in thousands)*

---

| | | |
|:---|:---|:---|
|  | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30, <br> 2024 |
| Operating activities |  |  |
| Net income | $1555 | $12207 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 6869 | 3219 |
| &nbsp;&nbsp;&nbsp;Unrealized loss of crypto assets held | 107 |  |
| &nbsp;&nbsp;&nbsp;Impairment of crypto assets held |  | 419 |
| &nbsp;&nbsp;&nbsp;Realized loss on crypto assets, net | 13 | 39 |
| &nbsp;&nbsp;&nbsp;Bitcoin payments for expenses | 599 | 6784 |
| &nbsp;&nbsp;&nbsp;Bitcoin received from independent Bitcoin ATM operators [affiliates program] | (1156) |  |
| &nbsp;&nbsp;&nbsp;Loss on disposal of property and equipment | 63 |  |
| &nbsp;&nbsp;&nbsp;Non-cash loss on extinguishment of debt | 4602 |  |
| &nbsp;&nbsp;&nbsp;Write-off of unamortized imputed interest | 681 |  |
| &nbsp;&nbsp;&nbsp;Deferred income tax | (219) | 581 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Crypto assets held | (3039) | (7784) |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (1775) | (485) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 521 | (1368) |
| &nbsp;&nbsp;&nbsp;Liability for cash held for customers | 2724 | 779 |
| &nbsp;&nbsp;&nbsp;Accounts payable and other liabilities | (3865) | 4024 |
| Net cash provided by operating activities | 7680 | 18415 |
| Investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (1130) | (9346) |
| &nbsp;&nbsp;&nbsp;Capitalized software | (6) | (23) |
| Net cash used in investing activities | (1136) | (9369) |
| Financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from debt | 353 | 167 |
| &nbsp;&nbsp;&nbsp;Repayment of debt | (435) | (4604) |
| &nbsp;&nbsp;&nbsp;Payments in reduction of financing leases |  | (1115) |
| &nbsp;&nbsp;&nbsp;Payments in reduction of equipment notes payable | (6650) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of stock | – | 57 |
| Net cash used in financing activities | (6732) | (5495) |
| Effect of exchange rate changed on cash and cash equivalents | (36) | (17) |
| Net increase (decrease) in cash and cash equivalents | (224) | 3534 |
| Cash, cash equivalents and restricted cash, beginning of period | 17628 | 18360 |
| Cash, cash equivalents and restricted cash, end of period | $17404 | $21894 |

---

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited), Continued

*(in thousands)*

---

| | | |
|:---|:---|:---|
|  | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30,<br> 2024 |
| Cash, cash equivalents, and restricted cash consisted of the following: |  |  |
| Cash and cash equivalents | $14558 | $20860 |
| Restricted cash held for customers | 2846 | 1034 |
| Total cash, cash equivalents and restricted cash | $17404 | $21894 |
| Supplemental disclosure of cash flow information: |  |  |
| Cash paid for interest | $706 | $217 |
| Cash paid for taxes | $705 | $5958 |
| Leased assets obtained in exchange for operating lease liabilities | $3874 | $7454 |
| Supplemental schedule of non-cash investing and financing activities: |  |  |
| Property and equipment purchased in accounts payable | $35 | $3621 |
| Software development purchased in accounts payable | $– | $5314 |
| Short-term debt replacing equipment financing | $9000 | $– |
| Bitcoin used to buy property and equipment | $2430 | $181 |
| Bitcoin assets used for interest | $– | $1037 |
| Bitcoin and Tether used for other payments | $83 | $– |

---

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

*(in thousands, except number of shares)*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Common Stock | Common Stock | | | | |
|  | Shares | Amount | Additional Paid-in<br>Capital | Accumulated Income<br>(Deficit) | Accumulated Other Comprehensive<br>Loss |<br>Total |
| Balance, December 31, 2023 | 4094459545 | $4094 | $11926 | $(4747) | $(255) | $11018 |
| Net income |  |  |  | 6046 |  | 6046 |
| Foreign currency translation adjustment | – | – | – | – | (11) | (11) |
| Balance, March 31, 2024 | 4094459545 | $4094 | $11926 | $1299 | $(266) | $17053 |
| Net income |  | $– | $– | $3906 | $– | $3906 |
| Foreign currency translation adjustment |  |  |  |  | (8) | (8) |
| Issuance of stock | 550000 | 1 | 56 | – | – | 57 |
| Balance, June 30, 2024 | 4095009545 | $4095 | $11982 | $5205 | $(274) | $21008 |
| Net income |  | $– | $– | $2255 | $– | $2255 |
| Foreign currency translation adjustment |  |  |  |  | 2 | 2 |
| Balance, September 30, 2024 | 4095009545 | $4095 | $11982 | $7460 | $(272) | $23265 |
| Balance, December 31, 2024 | 4095009545 | $4095 | $11982 | $5537 | $(241) | $21373 |
| Net income |  |  |  | 2624 |  | 2624 |
| Foreign currency translation adjustment | – | – | – | – | 4 | 4 |
| Balance, March 31, 2025 | 4095009545 | $4095 | $11982 | $8161 | $(237) | $24001 |
| Net income |  | $– | $– | $1382 | $– | $1382 |
| Foreign currency translation adjustment | – | – | – | – | (1) | (1) |
| Balance, June 30, 2025 | 4095009545 | $4095 | $11982 | $9543 | $(238) | $25382 |
| Net loss |  | $– | $– | $(2451) | $– | $(2451) |
| Foreign currency translation adjustment | – | – | – | – | (39) | (39) |
| Balance, September 30, 2025 | 4095009545 | $4095 | $11982 | $7092 | $(277) | $22892 |

---

See accompanying notes to unaudited condensed consolidated financial statements.

Athena Bitcoin Global and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

For the three and nine months ended September 30, 2025 and September 30, 2024

**NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Nature of Business**

Athena Bitcoin Global, a Nevada corporation, and its wholly-owned subsidiary, Athena Bitcoin, Inc., a Delaware corporation (together referred to as "Athena Global" or the "Company") is a provider of various crypto asset transaction platforms, including the operation of automated teller machines ("ATMs") and personalized services ("Athena Plus") for the purpose of selling and buying crypto assets, white-label operations and payment services. The Company's network of Athena Bitcoin ATMs ("Athena ATMs") is active in thirty-four states and the territory of Puerto Rico in the United States, and 4 countries in Central and South America as of September 30, 2025. The Company places its machines in convenience stores, shopping centers, and other easily accessible locations.

Athena Bitcoin Global was incorporated in the state of Nevada in 1991 under the name "GamePlan, Inc." for the sole purpose of merging with Sunbeam Solar, Inc., a Utah corporation, which merger occurred as of December 31, 1991. The Articles of Merger were filed in the state of Nevada pursuant to which the Company was the surviving entity following the merger.

On January 14, 2020, GamePlan, Inc. entered into a Share Exchange Agreement (the "Exchange Agreement"), with Athena Bitcoin, Inc., a Delaware corporation ("Athena") founded in 2015, and certain shareholders of Athena. The Exchange Agreement provided for the reorganization of Athena, with and into GamePlan, Inc., resulting in Athena becoming a wholly-owned subsidiary of GamePlan, Inc., upon the closing of the transaction. The agreement was for the exchange of 100% of the outstanding common stock of Athena, for 3,593,644,680 shares of GamePlan, Inc.'s common stock (an exchange rate of 1,244.69 shares of GamePlan, Inc. common stock for each share of Athena common stock). The closing of the transaction occurred as of January 30, 2020.

As the result of this transaction, the former shareholders of Athena acquired the majority (88%) of the voting rights of the Company and Athena had control of the Company's board of directors. Also, the senior management of Athena became the management of the combined entity. Therefore, the Company determined that the Share Exchange Agreement was a reverse acquisition as defined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805-10-55-12, and Athena is considered the accounting acquirer pursuant to FASB ASC 805-40-45-2. Accordingly, the historical financial statements prior to the Share Exchange Agreement are those of Athena, except that the historical equity of the Company has been retroactively restated to reflect the number of shares received in the business combination at the exchange rate of 1,244.69 shares of the Company's common stock for each share of Athena common stock. All share and per share information included in these condensed consolidated financial statements have been adjusted to reflect the 1,244.69 to 1 share conversion.

Effective April 15, 2021, the Company changed its name to Athena Bitcoin Global from GamePlan, Inc.

Athena Bitcoin Global has 10,000,000,000 shares of common stock authorized and 4,095,009,545 shares of common stock issued and outstanding as of September 30, 2025 and December 31, 2024, respectively.

**Principles of Consolidation**

The accompanying condensed consolidated financial statements include the accounts of Athena Bitcoin Global, Athena Bitcoin, Inc. and its wholly-owned subsidiaries, Athena Bitcoin S. de C.V., incorporated in Mexico; Athena Holdings Colombia SAS, incorporated in Colombia; Athena Holding Company S.R.L, incorporated in Argentina; Athena Holdings of PR LLC, incorporated in Puerto Rico; Athena Holdings El Salvador, S.A. de C.V., incorporated in El Salvador; and Athena Business Holdings Panama S.A. incorporated in Panama. All significant intercompany account balances and transactions have been eliminated in consolidation.

A summary of the Company's significant accounting policies is as follows:

**Basis of Presentation**

The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

**Use of Estimates**

The preparation of the condensed consolidated financial statements, in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Significant estimates and assumptions made by management are used for, but not limited to, present value of lease liabilities and right-of-use assets, contingencies, valuation of crypto assets held, valuation of current and deferred income taxes and impairment assessment for long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

**Revenue Recognition**

The Company derives its recurring revenues primarily from three sources: (i) sale of crypto assets at Bitcoin ATMs (both Athena ATMs and White-label ATMs such as those in El Salvador), (ii) customized investor trading services for the sale or purchase of crypto assets through the Company's Athena Plus desk (referred to as "over-the-counter" or "OTC"), and (iii) Athena Pay which is a payment processor application ("app"); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin. The Company also generates revenue from ancillary items, such as sale of intellectual property and maintenance of software.

Under FASB ASC 606, Revenue from Contracts with Customers, ("FASB ASC 606") the Company recognizes revenue at the point of sale or over time of the service period for these products or services to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Pursuant to FASB ASC 606, the Company recognizes revenue by applying the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the contract, or contracts, with a customer.

· Identification of the performance obligations in the contract.

· Determination of the transaction price.

· Allocation of the transaction price to the performance obligations in the contract.

· Recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company recognizes revenue when the performance obligations identified under the terms of contracts with its customers are satisfied.

Judgment is required in determining whether we are the principal or the agent in transactions between customers. We evaluate the presentation of revenue on a gross or net basis based primarily on inventory risk (are we at risk for potential fluctuations of the crypto asset price) and whether we control the crypto asset provided before it is transferred to the customer or whether we act as an agent by arranging for others to provide the crypto asset to the customer. The Company determined it acts as the principal in each of its revenue streams. The Company enters into contracts that may include multiple performance obligations. The Company identifies the promises in the contract and assigns them to their appropriate performance obligation. These performance obligations may be part of a different revenue source and are listed separately below.

 ****

***Athena ATM & White-label Service***

*<u>Athena ATM</u>*

The Company requires all users of Athena ATMs to agree to the ATM Terms of Service which stipulate the terms and conditions of the transaction. The user, by inserting sovereign currency (known as fiat) and confirming that they agree to the transaction, is agreeing to the contract that governs the transaction.

The Company has a single performance obligation to provide a specific quantity of a Bitcoin to the customer's crypto wallet in exchange for fiat. The Company utilizes a mark-up for crypto assets sold to the customer. Athena ATMs permit customers to purchase as little as one US dollar of Bitcoin, and it records the gross cash received from the customer as the transaction price.

Revenue is recognized at the point in time when the Bitcoin is delivered to the customer's crypto wallet. Delivery to the customer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.

*<u>White-label Service</u>*

In this revenue stream, "client" refers to the entity contracting with the Company while "customer" refers to the person using the White-label ATM. The Company entered into multiple contracts that govern the white-label service for ATMs located in El Salvador and in the United States. The contracts permit the clients to terminate the contract at any point or to adjust the number of ATMs that are in use without a substantive penalty.

The Company operates White-label ATMs on behalf of the clients and the installation of the ATMs is performed by a third-party which is chosen by the White-label ATM client.

The operations, on behalf of the White-label client, include cash logistics services, and testing the ATMs. The Company charges a fixed fee each month for operating the ATMs.

The Company leases Company-owned ATMs to its clients. The Company elected the expedient in FASB ASC 842, Leases ("ASC 842"), which permits combining the lease and non-lease components together if the lease component has the same timing and pattern of transfer as the non-lease component and the lease component is an operating lease. Both of these conditions are met (for a more detailed discussion see *<u>Leases</u>* within NOTE 1, below).

The Company is considered the principal, as it controls any third-party good or service before it is transferred to the client.

For operating the White-label ATM, revenue is recognized straight line over the requisite service period.

*Athena Plus (Over-The-Counter or OTC)*

The Company requires all users of Athena Plus (a.k.a. "Over-The-Counter" or "OTC") to agree to the Athena Plus Terms of Service. The Athena Plus Terms of Service stipulate the terms and conditions of the transaction. The user, by wiring fiat to the Company's bank account, is agreeing to the contract that governs the transaction.

The Company provides a specific quantity of Bitcoin to the customer's crypto wallet. The Company utilizes a mark-up for crypto assets sold to the customer. The minimum transaction is $10 thousand (or equivalent value of local currency). The Company records the gross cash received from the customer as the transaction price for the transaction.

Revenue is recognized at the point in time when the Bitcoin is delivered to the customer's crypto wallet. Delivery to the customer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.

*Athena Pay*

 

The Company requires all retailers who are using Athena Pay to execute the Athena Pay contract which stipulates the terms and conditions of the transactions. As a payment processor, the Company recognizes a processing fee of approximately 2.5% (average) of the transaction amount, when the transaction occurs (i.e., when the retailer generates the QR code with the specific amount to be charged to the customers in Bitcoin and the transaction is completed).

Revenue is recognized at the point in time when the Bitcoin is delivered to the retailer's crypto wallet. Delivery to the retailer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the transaction is completed.

**Cost of Revenues**

Cost of revenues consists primarily of expenses related to the acquisition of Bitcoin; including the costs to purchase Bitcoin from users of the Company's ATMs and from third-party exchanges at market value, and cost of revenues includes the costs of operating the ATMs from which Bitcoin are sold (including the associated rent expense, related incentives, ATM cash losses, software licensing fees for the ATMs, depreciation of ATM machines, amortization of software, insurance, and utilities), crypto asset valuation changes and fees paid to service the ATMs and the transport of cash to the banks.

**Cash and Cash Equivalents**

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash maintained at various financial institutions, cash in transit, and cash in ATMs owned and leased by the Company.

The Company maintains cash balances at various financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per institution. The Company has deposits in excess of the FDIC-insured limit. The Company has not experienced any losses in such accounts and believes that it is not exposed to significant credit risk due to the financial position of the depository institutions, third-party crypto exchanges or investment vehicles in which those deposits are held. The Company has significant cash in ATMs, held on various third-party crypto exchanges and in transit with cash logistic providers. Management evaluates cash in transit based on outstanding cash deposits on cash picked up by the armored truck companies, historical cash deposits and cash that is lost during transit, which is immaterial. The armored truck companies maintain insurance over theft and losses.

Cash in transit consists of cash that is picked up by armored truck companies from the Company's ATMs but not yet deposited in the Company's bank accounts. As of September 30, 2025 and December 31, 2024, the Company had cash in transit of $3.4 million and $5.5 million, respectively, net of an allowance for cash lost in transit of $713 thousand and $1.3 million, respectively. The Company recognized $251 thousand and $1.1 million of cash losses for cash in transit for the three and nine months ended September 30, 2025, respectively, which are included in other operating expense in the condensed consolidated statements of operations and comprehensive income (loss), and $340 thousand and $726 thousand of cash losses for cash in transit for the three and nine months ended September 30, 2024, respectively, which are included in other operating expense in the condensed consolidated statements of operations and comprehensive income (loss). The Company wrote-off $2.1 million of uncollectible outstanding cash in transit for the nine months ended September 30, 2025 representing $1.3 million of amounts outstanding from 2023 and $830 thousand representing amounts outstanding from 2024.

**Restricted Cash Held for Customers**

Restricted cash held for customers consists of money on hand received from customers of the White-label clients for replenishment of ATMs.

**Accounts Receivable**

Accounts receivable are unconditional, uncollateralized customer obligations and are stated at the amount the Company expects to collect. The carrying amount of accounts receivable is reduced by an allowance for credit losses. The Company's allowance for credit losses represents the estimate of expected credit losses related to accounts receivable. To estimate the allowance for credit losses, the Company leverages information on historical losses, asset-specific risk characteristics, current conditions and reasonable and supportable forecast of future conditions. Account balances are written off against the allowance when the Company deems the amount is uncollectable.

The Company measures collectability of its accounts receivables using the current expected credit loss ("CECL") method. The measurement of CECL applies to all financial assets measured at amortized cost, including receivables for revenue. The Company recognized no allowance for credit losses as of September 30, 2025 and December 31, 2024.

**Software Development Costs**

The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by FASB ASC 985-20-25 "*Costs of Software to Be Sold, Leased, or Marketed*", requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers.

Capitalized software consists of costs related to the design, coding, testing and documentation of software, as well as salaries and compensation costs for employees, fees paid to third-party consultants who are directly involved in development efforts, and costs incurred for upgrades and enhancements to add functionality of the software. Other costs that do not meet the capitalization criteria are expensed as incurred. The criteria for capitalization includes the completion of the preliminary project stage, demonstration of feasibility of the project and the ability to reliably estimate future economic benefits. Capitalized software is subject to periodic impairment tests to ensure that the carrying value of the asset is not overstated. If an impairment is identified, the carrying value of the capitalized software will be reduced to its recoverable amount. Software development is amortized over its estimated useful life of five years.

In accordance with FASB ASC 350-30-65 "<u>Goodwill and Other Intangible Assets</u>", the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important, which could trigger an impairment review include the following:

1. Significant underperformance compared to historical or projected future operating results;

2. Significant changes in the manner or use of the acquired assets or the strategy for the overall business; and

3. Significant negative industry or economic trends.

When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

There was no impairment for the three and nine months ended September 30, 2025 and 2024.

**Leases** 

The Company determines if an arrangement is a lease at inception. The Company determines if an arrangement is a lease, or contains a lease, primarily by determining if the arrangement conveys to the Company the right to control or use an identified asset. The Company classifies its arrangements for ATM retail spaces as operating leases. The Company has classified certain arrangements for ATMs as finance leases. The Company does not have any significant arrangements where it is the lessor.

The Company elected to separate lease and non-lease components for arrangements where the Company is a lessee. The Company determined the relative standalone price of the separate lease components and non-lease components by utilizing observable information to estimate the standalone price of each component. The Company allocated the consideration on a relative standalone price basis to the separate lease components and the non-lease components of the contract.

Leases with an initial lease term of 12 months or less are not recorded on the condensed consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term.

Operating and finance lease right of use ("ROU") assets and operating and finance lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The right of use assets is shown net of accumulated periodic amortization. The Company's leases do not contain material residual value guarantees or material restrictive covenants. For purposes of calculating lease obligations, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The discount rate used to measure the Company's lease obligation is its incremental borrowing rate at lease commencement. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term while finance lease ROU assets are amortized on a straight-line basis and interest expense is recorded over the lease term based on the incremental borrowing rate and the amount of lease liability outstanding during each month.

The operating and finance lease assets also include any initial direct costs and lease payments made prior to lease commencement and excludes lease incentives incurred.

**Concentration of Credit Risk**

The Company's revenues, other than White-label services discussed below (as well as in <u>Revenue Recognition- Athena ATM & White-label Service-Athena ATM, above)</u>, are generated primarily from ATM sales to customers. As the Company collects all amounts from these customers and holds $0 in accounts receivable from its ATM or Athena Plus (Over-the-Counter) customers, there is no credit risk associated with customer concentration for these customers.

The Company has revenues from White-label services in El Salvador and ancillary sales to customers where it provides services on customary credit terms, typically Net 30 or Net 60. As of September 30, 2025 and December 31, 2024, one customer, Chivo, Sociedad Anónima de Capital Variable, represented substantially all of the Company's total accounts receivable balance.

No single customer is responsible for over 10% of revenue for the three and nine months ended September 30, 2025 and 2024.

**Property and Equipment, Net**

Property and equipment are stated at cost, net of accumulated depreciation. Equipment is depreciated over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of improvements or the term of the related lease. Repairs and maintenance costs are expensed as incurred.

Following are the estimated useful lives by type:

---

| | |
|:---|:---|
| *Description* | *Estimated Useful Life* |
| Computer equipment | Three years |
| ATM equipment | Three years |
| Office equipment | Three to six years |

---

**<br> Impairment of Long-Lived Assets**

The Company reviews its long-lived assets for impairment in accordance with FASB ASC 360 – Property, Plant and Equipment whenever events or changes in circumstances have indicated that an asset may not be recoverable. Management has determined there was no impairment of long-lived assets for the three and nine months ended September 30, 2025 and 2024.

**Crypto Assets Held, Net**

The Company's crypto assets are Bitcoin and Tether (USDt) and they are considered indefinite-lived intangible assets under FASB ASC 350 – Intangibles—Goodwill ("ASC 350") and are initially measured at cost and are not amortized. As intangible assets, Bitcoin and Tether held are initially recorded at cost. However, on December 13, 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires certain cryptocurrencies to be measured at fair value, with changes in fair value recorded in net income in each reporting period. Effective as of January 1, 2025, the Company adopted ASU 2023-08, which requires the Company to measure crypto assets held at fair value. The Company determines the fair value of its Bitcoin in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on CoinMarketCap, which is a level 1 input in the fair value hierarchy.

The Company recognized an unrealized loss on crypto assets held of $14 thousand and $107 thousand which is included in Cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2025, respectively. No unrealized gain or loss is recognized for the three and nine months ended September 30, 2024 as the ASU was not adopted until January 1, 2025.

For the three and nine months ended September 30, 2024 (prior to the adoption of ASU 2023-08 described above), Bitcoin and Tether were initially recorded at cost and tested for impairment at the end of the month. The Company assigns cost to transactions on a first-in, first-out basis. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the Bitcoin and Tether at the time its fair value is being measured in its principal market. The Company continuously assessed Bitcoin and Tether for impairment. The Company determined that there was a decline in the quoted market price below the carrying cost of their Bitcoin and Tether and for the three and nine months ended September 30, 2024, the Company had impairment charges related to Bitcoin held of $292 thousand and $419 thousand respectively, which is included in Cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss). No impairment is recognized for the three and nine months ended September 30, 2025 as the Company adopted, effective January 1, 2025, the guidance to measure crypto assets held, at fair value and therefore recognize unrealized losses instead of impairment charges.

The Company purchases Bitcoin, which is held in the Company's hot wallets, on a just-in-time basis to facilitate sales to customers and mitigate exposure to volatility in Bitcoin prices. As of July 19, 2023, the Company only transacts in Bitcoin at its ATMs in exchange for cash, on a predetermined markup at the time of the transaction. However, there may be multiple days between the purchase of the Bitcoin and the sale of the Bitcoin. When Bitcoin is sold to customers, the Company recognizes the market value of the crypto asset within cost of revenue. The related cash flows from purchases and sales of cryptocurrencies are presented as cash flows from operating activities on the condensed consolidated statements of cash flows.

**Expenses Paid in Bitcoin**

The Company enters into agreements with certain vendors and service providers that provide us with the option to settle their invoices in Bitcoin. The amount due is fixed and is denominated in USD. There are no payment terms that include conversion options, variable settlement features, or alternative settlement provisions contingent upon future events or market price fluctuations that could potentially give rise to embedded derivatives.

The Company considers the guidance in FASB ASC 350, FASB ASC 606, FASB ASC 610, and FASB ASC 845 when it evaluates the derecognition of its Bitcoin paid to vendors in lieu of cash payments. In these transactions, the Company has been invoiced by a vendor and given the option to pay in USD or Bitcoin. The amount of Bitcoin is determined by the market price in accordance with the guidance of FASB ASC 820. The Company records as an expense the USD value of the invoice and then considers the above references to determine the proper way to derecognize the indefinite-lived intangible assets used as payment.

The Company records invoices from vendors in USD and for vendors who elect to be paid in Bitcoin, the Company transfers Bitcoin at market value at the time of transfer in line with ASC 820, Fair Value Measurement. The Company then recognizes as a gain or loss, the difference between the current carrying value of the Bitcoin and its value at the time of transfer to cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss).

The Company had (gains) and losses related to the derecognition of Bitcoin of ($4 thousand) and $5 thousand for the three months ended September 30, 2025 and 2024, respectively, and $13 thousand and $39 thousand for the nine months ended September 30, 2025 and 2024, respectively.

**Foreign Currency** 

The functional currency of the Company's foreign operations is generally the local currency. For these foreign entities, the Company translates their financial statements into U.S. dollars using average exchange rates for the period for income statement amounts and using end-of-period exchange rates for assets and liabilities. The Company records these translation adjustments in accumulated other comprehensive income (loss), a separate component of equity, in the Company's condensed consolidated balance sheets. The Company has foreign currency translation gain (loss) adjustments of ($39 thousand) and $2 thousand during the three months ended September 30, 2025 and 2024, respectively and of ($36 thousand) and ($17 thousand) during the nine months ended September 30, 2025 and 2024, respectively.

The Company records exchange gains and losses resulting from the conversion of transaction currency to functional currency as a component of other income (expense).

The amount of taxes allocated to translation adjustments was immaterial for the three and nine months ended September 30, 2025 and 2024.

**Stock-Based Compensation Expense**

Stock-based compensation expense is recorded as a result of stock options, restricted stock units and restricted stock granted in return for services rendered. The stock-based payment arrangements with employees were accounted for under FASB ASC 718, "<u>Compensation - Stock Compensation</u>".

The Company accounts for stock-based compensation for all stock-based awards made to employees and directors, including employee stock options and non-vested stock awards, based on the fair values on the dates they are granted. The Company records the fair value of awards expected to vest as compensation expense on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards, including the options expected term, expected volatility of the underlying stock, risk-free rate, and expected dividends. The expected volatility is based on the average historical volatility of certain comparable publicly-traded companies within the Company's industry. The expected term assumptions are based on the simplified method, due to insufficient historical exercise data and the limited period of time that the Company's equity securities have been available for issuance. The risk-free interest rates are based on the U.S. Treasury yield in effect at the time of grant. The Company does not expect to pay dividends on common stock in the foreseeable future; therefore, it estimated the dividend yield to be 0%.

For a more detailed discussion of stock-based compensation, see NOTE 10. STOCK-BASED COMPENSATION**.**

No stock-based compensation was recognized during the three and nine months ended September 30, 2025 and 2024.

**Warrants to Purchase Common Stock**

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in the FASB ASC 480, Distinguishing Liabilities from Equity ("ASC 480"), and FASB ASC 815, Derivatives and Hedging ("ASC 815"). Management's assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, they are recorded at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as a non-cash gain or loss in the condensed consolidated statements of operations and comprehensive income (loss).

**Income Taxes**

Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which are recorded on the condensed consolidated balance sheets in accordance with FASB ASC 740, Income Taxes ("ASC 740"), which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the condensed consolidated statements of operations and comprehensive income (loss).

The Company recognizes interest and penalties related to uncertain tax benefits on the income tax expense line in the accompanying consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the condensed consolidated balance sheets.

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity's consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As a result of the implementation of ASC 740-10, the Company does not have a liability for unrecognized income tax benefits.

**Segment Reporting**

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (the "CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company's Chief Executive Officer is the Company's CODM. The CODM reviews financial information presented on a global consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. While the Company does have revenue from multiple products and geographies, no measures of profitability by product or geography are available, so discrete financial information is not available for each such component. As such, the Company has determined that it operates as one operating segment and one reportable segment.

**Earnings (loss) per share**

Basic earnings (loss) per share are calculated by dividing net income (loss) by the number of weighted average common shares outstanding for the applicable period, excluding the shares exercised from the proceeds of the non-recourse loan. Diluted earnings (loss) per share is calculated by dividing diluted net income (loss) available to common stockholders by the diluted weighted average shares outstanding which includes common shares outstanding for the applicable period and shares of common stock related to outstanding stock-based awards, warrants and convertible senior notes using the treasury stock method or the if-converted method.

The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings (loss) per share by application of the treasury stock method. The dilutive effect of outstanding convertible securities is reflected in diluted earnings (loss) per share by application of the if-converted method.

The following is a reconciliation of basic and diluted earnings (loss) per common share for the three and nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30, <br> 2024 | September 30, <br> 2025 | September 30, <br> 2024 |
| **Basic net income (loss) per share:** |  |  |  |  |
| Numerator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss), in thousands | $(2451) | $2255 | $1555 | $12207 |
| Denominator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted-average shares of common stock used to compute net earnings (loss) per share attributable to common stockholders, basic | 4095009545 | 4094750869 | 4095009545 | 4094750869 |
| &nbsp;&nbsp;&nbsp;Less: Non-recourse loan shares | – | (119139461) | – | (119139461) |
| Adjusted weighted-average shares of common stock used to compute net earnings (loss) per share attributable to common stockholders, basic | 4095009545 | 3975611408 | 4095009545 | 3975611408 |
| Net earnings (loss) per share attributable to common stockholders, basic | $(0.00060) | $0.00057 | $0.00038 | $0.00307 |
| **Diluted net income (loss) per share:** |  |  |  |  |
| Numerator |  |  |  |  |
| Net income (loss), basic, in thousands | $(2451) | $2255 | $1555 | $12207 |
| &nbsp;&nbsp;&nbsp;Add: Interest expense on convertible debt, in thousands | – | 60 | 180 | 180 |
| &nbsp;&nbsp;&nbsp;Net income (loss), diluted, in thousands | $(2451) | $2315 | $1735 | $12387 |
| Denominator |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Adjusted weighted-average shares of common stock used to compute net earnings (loss) per share attributable to common stockholders, basic | 4095009545 | 3975611408 | 4095009545 | 3975611408 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-recourse loan issuance |  | 111228451 |  | 114786048 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average effect of potentially dilutive securities: convertible debt |  | 250000000 | 250000000 | 250000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unexercised warrants | – | 119561401 | – | 121768358 |
| &nbsp;&nbsp;&nbsp;Weighted-average shares of common stock used to compute net earnings (loss) per share attributable to common stockholders, diluted | 4095009545 | 4456401260 | 4345009545 | 4462165814 |
| Net earnings (loss) per share attributable to common stockholders, diluted | $(0.00060) | $0.00052 | $0.00040 | $0.00278 |

---

For the three months ended September 30, 2025, the weighted-average number of common shares outstanding excludes anti-dilutive common stock equivalents.

There were no anti-dilutive securities for three months ended September 30, 2024 and nine months ended September 30, 2025 and 2024.

**Recently Adopted and Issued Accounting Pronouncements**

The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, effective December 31, 2024. The adoption did not have a material impact on the condensed consolidated financial statements.

On December 13, 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires entities to subsequently measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. For all entities, the ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Effective as of January 1, 2025, the Company adopted ASU 2023-08, which requires the Company to measure crypto assets held at fair value. Upon adoption, there is no material impact on the condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Adoption of the standard will only impact the income tax disclosures and is not expected to be material to the condensed consolidated financial statements.

**Fair Value Measurements** 

ASC 820, Fair Value Measurement, establishes a three-level valuation hierarchy for disclosure of fair value measurements. Under the FASB's authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods, including the market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

---

| | |
|:---|:---|
| Level 1: | Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. |
| Level 2: | Observable inputs other than Level 1, including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. |
| Level 3: | Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single-dealer quotes not corroborated by observable market data. |

---

The Company has various processes and controls in place to ensure that fair value is reasonably estimated. A model validation policy governs the use and control of valuation models used to estimate fair value. This policy requires review and approval of models, and periodic re-assessments of models to ensure that they are continuing to perform as designed. The Company performs due diligence procedures over third-party pricing service providers in order to support their use in the valuation process. Where market information is not available to support internal valuations, independent reviews of the valuations are performed, and any material exposures are escalated through a management review process.

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. To the extent that the valuation method is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised in determining fair value is greatest for the financial instruments categorized in Level 3.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

During the three and nine months ended September 30, 2025 and 2024, there were no changes to the Company's valuation techniques that had, or are expected to have, a material impact on its consolidated balance sheets or consolidated statements of operations and comprehensive income (loss).

The Company did not make any transfers between the levels of the fair value hierarchy during the three and nine months ended September 30, 2025 and 2024.

The carrying amounts for cash equivalents, restricted cash, accounts receivable, accounts payable, other current liabilities, short-term debt, note payable related-party, convertible debt related-party and equipment notes payable approximate fair value.

**NOTE 2. REVENUE**

The table below presents revenue of the Company disaggregated by revenue source for the three and nine months ended (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30, <br> 2024 | September 30, <br> 2025 | September 30, <br> 2024 |
| Bitcoin ATMs (Athena and White-label) | $56598 | $68188 | $188156 | $218213 |
| Athena Plus (OTC) | 536 | 1010 | 3852 | 3245 |
| Athena Pay, Affiliates and other ancillary | 280 | 208 | 844 | 279 |
|  | $57414 | $69406 | $192852 | $221737 |

---

The revenues from Bitcoin ATMs are composed of the following:

&nbsp;&nbsp;&nbsp;&nbsp;· The Company recognized $55.9 million of revenues related to Athena ATMs, and $0.7 million of revenues
related to operating the White-labeled ATMs for a total of $56.6 million of revenues from Bitcoin ATMs for the three months ended September
30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;· The Company recognized $66.9 million of revenues related to Athena ATMs, and $1.3 million of revenues
related to operating the White-labeled ATMs for a total of $68.2 million of revenues from Bitcoin ATMs for the three months ended September
30, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;· The Company recognized $186.2 million of revenues related to Athena ATMs, and $1.9 million of revenues
related to operating the White-labeled ATMs for a total of $188.2 million of revenues from Bitcoin ATMs for the nine months ended September
30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;· The Company recognized $214.4 million of revenues related to Athena ATMs, and $3.8 million of revenues
related to operating the White-labeled ATMs for a total of $218.2 million of revenues from Bitcoin ATMs for the nine months ended September
30, 2024.

The table below presents revenues by geographic territories based on sales location for the three and nine months ended (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30, <br> 2024 | September 30, <br> 2025 | September 30, <br> 2024 |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;United States | $55884 | $67330 | $186291 | $215139 |
| &nbsp;&nbsp;&nbsp;El Salvador | 1481 | 2006 | 6350 | 6385 |
| &nbsp;&nbsp;&nbsp;Argentina, Colombia & Mexico | 49 | 70 | 211 | 213 |
|  | $57414 | $69406 | $192852 | $221737 |

---

**Contracts with Chivo, Sociedad Anónima de Capital Variable of El Salvador**

In the third quarter of 2021, the Company installed and began operating:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. 200 white-labeled ATMs in El Salvador,

ii. 10 white-labeled ATMs at El Salvador consulates in the U.S.,

iii. 45 white-labeled ATMs in other U.S. locations, and

iv. sold 950 point-of-sale (POS) terminals to the Ministerio de Hacienda (Department of Treasury) of El Salvador ("GOES") for local businesses in El Salvador to process transactions (under Athena Pay) in Bitcoin.

Additionally, the Company contracted for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. the sale of software,

ii. development of a Bitcoin platform designed to support a GOES branded digital wallet, and

iii. maintaining the GOES digital wallet.

On December 20, 2024, the Company and Chivo, Sociedad Anónima de Capital Variable, a wholly-owned private company of the Government of El Salvador ("Chivo"), agreed to a new three-year MSA and SLA effective December 1, 2024 which included the same services, performance obligations, pricing and terms outlined in the original Master Services Agreement, Contracts and Addendums effective as of July 1, 2022.

Effective June 30, 2024, a settlement agreement was entered into between Chivo and the Company whereby amounts owed to Chivo of $5.2 million for amounts retained by the Company were netted against fees that Chivo owed the Company of $4.4 million; the net of which amounts to a payable to Chivo of $782 thousand in addition to a receivable from Chivo of $798 thousand for other fees. As part of the settlement agreement, the receivables and payables between the Company and Chivo were written off in exchange for (i) a new three-year agreement with Athena Holdings El Salvador, S.A. de C.V. charging reduced rates going forward and (ii) Athena SV would make available to Chivo a credit facility of $600 thousand for Chivo's use at any time. However, the conditions of the credit facility were:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) that the cash is the property of Athena SV,

b) Chivo would need to deposit the amount of funds they needed in Athena SV's bank account (resulting in a pre-funded credit facility) and Athena would release the funds to Chivo from the ATM pick-ups, and

c) the credit facility has a monthly fee of 0.487% of the credit facility amount (i.e., $600 thousand).

The funds owed to Chivo were $0 as of September 30, 2025 and December 31, 2024.

As of September 30, 2025, and December 31, 2024, the cash received as advances from GOES was $2.8 million and $0, respectively. These amounts are included in restricted cash held for customers on the condensed consolidated balance sheets. A corresponding liability to repay GOES for the advances is included in liability for cash held for customers on the condensed consolidated balance sheets.

**NOTE 3. ACCOUNTS RECEIVABLE, NET**

Accounts receivable consisted of the following as of September 30, 2025 and, December 31, 2024 (in thousands):

---

| | | |
|:---|:---|:---|
|  | September 30, <br> 2025 | December 31,<br> 2024 |
| White-label fee receivable | $3097 | $716 |
| Athena Plus (OTC) |  | 600 |
| Others | 17 | 23 |
|  | $3114 | $1339 |

---

**NOTE 4. CRYPTO ASSETS HELD, NET**

 

The Company held the following crypto assets as of September 30, 2025, and December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | September 30, <br> 2025 | September 30, <br> 2025 | September 30, <br> 2025 | December 31, <br> 2024 | December 31, <br> 2024 | December 31, <br> 2024 |
|  | Qty <sup>(1)</sup> | Average Rate | Amount <br> (in thousands) | Qty <sup>(1)</sup> | Average Rate | Amount <br> (in thousands) |
| Bitcoin | 19 | $114056 | $2206 | 11 | $93000 | $1051 |
| Tether (USDt) | 1764 | 1 | 2 | 190000 | 1 | 190 |
|  |  |  | $2208 |  |  | $1241 |

---

<sup>(1)</sup> Rounded off to the nearest whole number

The table below shows the roll-forward of quantity and costs of various crypto assets traded by the Company for the three months and nine months ended September 30, 2025 and September 30, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Bitcoin** | **Bitcoin** | **Tether (USDt)** | **Tether (USDt)** |
| *Three months ended September 30, 2025* | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) |
| July 1, 2025 | 13 | $1423 | 10674 | $11 |
| Purchases | 358 | 41359 | 3032992 | 3033 |
| Cost of sales | (346) | (40008) | (3041902) | (3042) |
| Unrealized loss on crypto assets |  | (14) |  |  |
| Crypto assets received independent Bitcoin ATM operators [affiliates program] | 4 | 455 |  |  |
| Crypto assets used for expenses | (3) | (302) |  |  |
| Crypto assets used for capital expenditure | (7) | (707) | – | – |
| September 30, 2025 | 19 | $2206 | 1764 | $2 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| *Three months ended September 30, 2024* |  |  |  |  |
| July 1, 2024 | 8 | $470 | 342290 | $342 |
| Purchases | 897 | 54658 | 17208 | 17 |
| Cost of sales | (879) | (51695) |  |  |
| Impairment on crypto assets |  | (292) |  |  |
| Crypto assets used for expenses | (11) | (2538) |  |  |
| Crypto assets used for other payments | (8) | (181) | – | – |
| September 30, 2024 | 7 | $422 | 359498 | $359 |

---

<sup>(1)</sup> Rounded off to the nearest whole number

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Bitcoin** | **Bitcoin** | **Tether (USDt)** | **Tether (USDt)** |
| *Nine months ended September 30, 2025* | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) |
| January 1, 2025 | 11 | $1051 | 190000 | $190 |
| Purchases | 1423 | 142555 | 3176558 | 3177 |
| Cost of sales | (1394) | (139337) | (3364794) | (3365) |
| Unrealized loss on crypto assets |  | (107) |  |  |
| Crypto assets received for independent Bitcoin ATM operators [affiliates program] | 11 | 1156 |  |  |
| Crypto assets used for expenses | (6) | (599) |  |  |
| Crypto assets used for capital expenditure | (25) | (2430) |  |  |
| Crypto assets used for other payments | (1) | (83) | – | – |
| September 30, 2025 | 19 | $2206 | 1764 | $2 |

---

 

<sup>(1)</sup> Rounded off to the nearest whole number

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Bitcoin** | **Bitcoin** | **Tether (USDt)** | **Tether (USDt)** |
| *Nine months ended September 30, 2024* | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) | **Qty<sup>(1)</sup>** | **Cost**<br> (in thousands) |
| January 1, 2024 | 9 | $399 | 22190 | $22 |
| Purchases | 2936 | 172780 | 887442 | 887 |
| Cost of sales | (2838) | (165373) | (550134) | (550) |
| Impairment on crypto assets |  | (419) |  |  |
| Crypto assets used for expenses | (92) | (6784) |  |  |
| Crypto assets used for capital expenditure | (8) | (181) | – | – |
| September 30, 2024 | 7 | $422 | 359498 | $359 |

---

 

<sup>(1)</sup> Rounded off to the nearest whole number

**NOTE 5. PROPERTY AND EQUIPMENT, NET**

Property and equipment, net consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

---

| | | |
|:---|:---|:---|
|  | September 30, <br> 2025 | December 31, <br> 2024 |
| ATM Equipment | $26451 | $23271 |
| Computer equipment | 929 | 799 |
| Office equipment | 51 | 186 |
| Leasehold improvement | 148 | – |
|  | 27579 | 24256 |
| Less accumulated depreciation | 13230 | 8011 |
| Total property and equipment | $14349 | $16245 |

---

Depreciation expense for the three months ended September 30, 2025 and 2024 was $1.9 million and $1.3 million, respectively. Depreciation expense for the nine months ended September 30, 2025 and 2024 was $5.4 million and $2.7 million, respectively.

**NOTE 6. SOFTWARE DEVELOPMENT, NET**

During the second quarter of 2024, the Company entered into a Development Services Agreement with PSBC, LLC, a third-party Delaware corporation, for a software platform to use in connection with the operation of Bitcoin ATMs. The Company implemented and began to use the software platform in June 2024.

On May 14, 2025, the Company entered into a Second Amendment to the Development Services Agreement with PSBC, LLC, pursuant to which PSBC, LLC agreed to provide support services through November 14, 2025, and we agreed to pay PSBC, LLC, $50 thousand per month beginning on May 14, 2025. The balance of this Development Services Agreement was settled with the September 4, 2025 Release and Termination Agreement with Taproot Acquisition Enterprises, LLC, a Delaware limited liability company ("Taproot"), and its affiliated entities which terminated and settled all outstanding obligations under several prior arrangements, including this Development Services Agreement (please refer to **NOTE 9. NOTES PAYABLE –** Short-term debt for detailed descriptions).

The Company's capitalized software development cost was $0 and $9 thousand for the three months ended September 30, 2025 and 2024, and $6 thousand and $23 thousand for the nine months ended September 30, 2025 and 2024, respectively. There was no impairment for the three and nine months ended September 30, 2025 and 2024. Amortization expense for the three months ended September 30, 2025 and 2024, was $311 thousand and $131 thousand, respectively. Amortization expense for the nine months ended September 30, 2025 and 2024, was $950 thousand and $495 thousand, respectively.

---

| | | |
|:---|:---|:---|
| *(in thousands)* | September 30, <br> 2025 | December 31, <br> 2024 |
| Capitalized software | $6333 | $6327 |
| Less accumulated amortization | 2038 | 1088 |
| Total capitalized software | $4295 | $5239 |

---

**NOTE 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS**

Prepaid expenses and other current assets are mostly composed of prepayment to the Company's taxes, rent, insurance and security deposits. The components of prepaid expenses and other current assets were as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | September 30, <br> 2025 | December 31, <br> 2024 |
| Prepaid expenses and other current assets: |  |  |
| Prepaid expenses | $701 | $818 |
| Prepaid taxes | 1437 | 1865 |
| Other | 13 | 19 |
| Total prepaid expenses and other current assets | $2151 | $2702 |

---

**NOTE 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES**

Accounts payable and accrued expenses consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

---

| | | |
|:---|:---|:---|
|  | September 30, <br> 2025 | December 31, <br> 2024 |
| Accounts payable and accrued expenses: |  |  |
| Accounts payable | $803 | $4753 |
| Accrued expenses | 6763 | 6309 |
| Interest payable | 71 | 71 |
| Total accounts payable and accrued expenses | $7637 | $11133 |

---

**NOTE 9. NOTES PAYABLE**

*<u>Equipment notes payable</u>*

On September 22, 2021, the Company entered into a borrowing arrangement with Banco Hipotecario secured against the Company's assets in El Salvador. The promissory note provided for a principal amount of $1.5 million, with a final maturity date of 36 months after disbursal with equal monthly installment payments of $47 thousand and a moratorium of 2 months. Interest as defined in the loan arrangement is 7.5% per annum. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0.

On September 19, 2024, the Company and Taproot Acquisition Enterprises, LLC, a Delaware limited liability company, entered into an Omnibus Equipment Refinancing Agreement providing for the refinance of the Company's debt obligations previously incurred in connection with the purchase of Bitcoin ATMs pursuant to the previously entered into equipment financing agreements for the purchase of the equipment by the Company from Taproot. The parties agreed that the total outstanding balance of $2.1 million would be paid by one inception payment of $1.2 million upon the execution of the agreement and followed by weekly payments of $20 thousand for a period of 48 weeks. The Omnibus Equipment Refinancing Agreement also contains representations and warranties of both parties with respect to clear and marketable title of the equipment and provides provisions addressing an event of default by the Company as a purchaser of the equipment. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $643 thousand, respectively.

On October 30, 2024, the Company entered into an Equipment Financing Agreement with Taproot (the "Financing Agreement") to purchase certain Bitcoin ATMs listed in the Financing Agreement. The Financing Agreement amends and supersedes previous equipment purchase agreements between the parties. Under the Financing Agreement, the Company will acquire from Taproot installed Bitcoin ATMs or additional Bitcoin ATMs at the price per Bitcoin ATM set forth in the Equipment Agreement. The down payment was to be paid in 4 installments with the first payment due and paid by the Company as of October 31, 2024, and the last payment due by January 31, 2025; which last payment was made on January 27, 2025.

In addition, the Company agreed to pay a fee equal to 0.8% of the revenue (to be paid weekly) derived from the sale of Bitcoin in each Bitcoin ATM location until the expiration of the term of the Financing Agreement (36 months) or until full payment of the total purchase price for the equipment subject to certain additional limitations. The Financing Agreement also provides the provisions addressing the event of default by either Taproot or the Company, and respective available remedies. Certain property on which the equipment units are located are subject to merchant agreements (as listed in the Financing Agreement), and the Financing Agreement provides for assignment and assumption of merchant agreements and leases, as may be applicable. Furthermore, Taproot is to maintain a first priority interest on the Bitcoin ATMs until fully paid for. In connection therewith, the Company, Taproot and KGPLA Holdings LLC ("KGPLA"), an entity in which Mike Komaransky, a former director and principal shareholder of the Company has a controlling interest and whose Chief Investment Officer is Huaxing "Jason" Lu, our director, entered into a First Amendment to the Intercreditor Agreement dated as of October 23, 2024, pursuant to which KGPLA agreed to the subordination of its first priority security position on collateral of the Company to Taproot. As of September 30, 2025 and December 31, 2024, the outstanding principal balance was $0 and $5.8 million, respectively. As described below, on September 4, 2025, all outstanding obligations with Taproot, and its affiliated entities (the "Taproot Parties") were terminated and replaced with a Release and Termination Agreement; therefore, as of September 30, 2025, the principal outstanding balance of the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement was $0. See table below for balances of the aforementioned loans as of September 30, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
| Long-term Debt Reconciliation (in thousands) | September 30, <br> 2025 | December 31, <br> 2024 |
| Taproot – Omnibus Equipment Refinancing Agreement | $– | $643 |
| Taproot – Equipment Financing Agreement | – | 5785 |
| Total Equipment notes payable |  | 6428 |
| Less: Equipment notes payable, current portion | – | (3084) |
| Equipment notes payable, net of current portion | $– | $3344 |

---

*<u>Short-term debt</u>*

On September 4, 2025, the Company entered into a Release and Termination Agreement with Taproot and the Taproot Parties to terminate and settle all outstanding obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. Under the terms of the Release and Termination Agreement, the Company agreed to pay the Taproot Parties an aggregate Termination Payment of $9 million, consisting of an upfront payment of $3 million upon execution of the agreement and weekly installments of $115.4 thousand over 52 weeks. Upon payment in full, all security interests, liens, and other encumbrances under the prior agreements will be released, and all outstanding obligations between the parties will be deemed satisfied and discharged.

 

At the date of settlement, the carrying amount of the debt obligation under the Equipment Financing Agreement was $4.3 million. The Company also recorded the following items associated with the extinguishment of debt:

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) $3.2 million, related to the Equipment Financing Agreement and 2024 Financing Royalty Buy-Out, representing the lump-sum buy-out of a 0.5% vendor participation obligation.

b) $300 thousand, related to the Location Referral Agreement and Location Agreement Buy-Out, representing the lump-sum buy-out of a referral revenue share obligation.

c) $1.1 million, recorded as a settlement premium, representing the excess of the total settlement consideration over the carrying amount of the extinguished obligations.

During the three and nine months ended September 30, 2025, the Company recorded a loss of $4.6 million, included in loss on extinguishment of debt expense in the condensed consolidated statements of operations and comprehensive income (loss), and $681 thousand of unamortized imputed interest, included in other (income) expense in the condensed consolidated statements of operations and comprehensive income (loss).

As of September 30, 2025 and December 31, 2024, the outstanding principal of the Release and Termination Agreement was $5.5 million and $0, respectively, which was included in short-term debt in the condensed consolidated balance sheets.

In December 2023, the Company entered into financing agreements with Capital Premium Financing, Inc. to pay the insurance premium on its commercial liability insurance. The annual interest rate was 20.53% per annum, repayable in nine monthly installments beginning February 1, 2024. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0.

On February 26, 2024, the Company entered into a financing agreement for $170 thousand with National Partners PFco LLC to pay the insurance premium on its directors' and officers' insurance with an annual percentage rate of 8.45% per annum repayable in ten monthly installments beginning March 14, 2024. On October 11, 2024, the Company increased its coverage for the same policy and entered into an additional financing agreement for $170 thousand with an annual percentage rate of 7.95%, repayable in ten monthly installments beginning November 11, 2024. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 thousand and $140 thousand, respectively.

On December 19, 2024, the Company entered into financing agreements for $116 thousand with National Partners PFco LLC., to pay the insurance premium on its commercial liability insurance with an annual interest rate of 7.95% per annum, repayable in eight monthly installments beginning January 11, 2025. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 thousand and $116 thousand, respectively.

 

On May 30, 2025, the Company entered into insurance premium financing agreements for $280 thousand (gross premium in the amount of $353 thousand less $73 thousand deposit) with E.T.I. Financial Corporation, to pay the insurance premium on its cyber, crime and employment practices liability insurance with an annual interest rate of 9.51% per annum, repayable in ten monthly installments beginning June 14, 2025. As of September 30, 2025, the outstanding principal was $172 thousand.

*<u>Note payable, Related</u>*-*<u>Party</u>*

As of May 15, 2023, the Company entered into a Senior Secured Loan Agreement, as amended (the "Loan Agreement") and Senior Secured Revolving Credit Promissory Note (the "Revolving Credit Note") with KGPLA. The Revolving Credit Note allowed the Company to borrow up to $4.0 million for the operations of its New Bitcoin ATM Machines, as defined in the Loan Agreement, with a maturity date of May 15, 2024. Revenue share fees for this agreement were calculated based on a percentage of the gross daily receipts generated from these machines and were recorded as part of interest expense in the condensed consolidated statements of operations and comprehensive income (loss). In connection with the above loan transaction and issuance of Revolving Credit Note, the Company granted KGPLA a first priority lien and security interest in and to all of the Company's assets, except for property previously pledged to Banco Hipotecario (see above), and with respect to such assets, the Company granted KGPLA a second priority lien. On March 28, 2024, the Company repaid the principal amount of $4.0 million (together with fees due) on the Senior Secured Revolving Credit Promissory Note due with KGPLA. The debt was settled in full in accordance with the terms outlined in the Revolving Credit Note and was funded using cash reserves generated from the Company's operating activities. The early payoff of this debt resulted in the elimination of revenue share fees. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0.

*<u>Convertible debt, related</u>*-*<u>party</u>*

On January 31, 2020, the Company entered into a convertible debenture agreement with KGPLA. The convertible debenture provided for a principal amount of $3.0 million, with a maturity date of January 31, 2025, which was extended to January 31, 2026. Interest as defined by the agreement is 8% per annum. KGPLA has the option to convert the outstanding principal and accrued interest balance into common stock of the Company at the lower of $0.012 per share or a 20% discount to the next major financing or change in control. The convertible debenture was amended and restated as of May 15, 2023, and became a secured, and not general unsecured, obligation of the Company, on par with the notes issued pursuant to the Senior Secured Loan Agreement entered into as of the same date. As of September 30, 2025 and December 31, 2024, the outstanding principal amount of the debenture was $3.0 million and $3.0 million, respectively.

Maturities on the Company's notes payable are as follows (in thousands):

---

| | |
|:---|:---|
| 2025 | $1584 |
| 2026 | 7126 |
| Total payments on notes payable | $8710 |

---

**NOTE 10. STOCK-BASED COMPENSATION**

**Stock Option Plans**

The Company has a 2021 Equity Incentive Plan (the "2021 Plan") with 98 million shares of common stock to be awarded to eligible employees, directors, and consultants in the form of stock options, restricted stock, other awards, and any combination of the foregoing. 2 million shares have been issued under the 2021 Plan as of the date of these financial statements for consulting services. As of September 30, 2025 and December 31, 2025, there were no options outstanding under the plan.

The Company's Board of Directors and its majority shareholders approved the 2025 Equity Compensation Plan (the "2025 Plan") effective as of July 7, 2025. The 2025 Plan authorized the granting of up to 409,500,955 shares of common stock to eligible employees, directors, and consultants in the form of stock options, restricted stock, restricted stock units ("RSUs"), other awards, and any combination of the foregoing. No securities have been issued under the 2025 Plan as of the date of these financial statements.

**Non-recourse loans**

In January 2020, the Company allowed its employees with vested stock options to exercise with the use of a non-recourse loan agreement for the issuance of 119,139,461 shares of common stock. These loan agreements originally had a maturity date of 48 months from the date of exercise, which was extended by one year in December 2023 to 60 months. An increase of $35 thousand to additional paid in capital was recorded as a result of this modification. The loans carry an interest rate of 1.69% per annum. The loans are required to be consistent with the accounting for stock options, with the exercise price of the stock option being the principal and interest due on the loan.

The fair value of the non-recourse loans as of the grant date (January 15, 2020) was determined using the Black-Scholes option pricing model. The following assumptions were used in estimating the fair value of the non-recourse loans:

---

| | |
|:---|:---|
| Stock price | $0.03 |
| Exercise price | $0.01 |
| Expected life (years) | 4.0 |
| Expected volatility | 78.3% |
| Annual dividend yield | 0.0% |
| Discount rate | 0.0% |

---

The Company elected, in accordance with FASB ASC 718, to deduct the increase in the exercise price (interest) from the risk-free interest rate, resulting in no discount rate.

The original fair value of the awards was $3.2 million, which was expensed in 2020.

As of December 31, 2024, the Company cancelled these non-recourse loans in favor of the employees.

No shares of the Company's common stock, options to purchase shares of the Company's common stock or restricted stock units of the Company have been issued during the three and nine months ended September 30, 2025 and 2024.

**NOTE 11. WARRANTS** 

In 2017, Athena Bitcoin, Inc. issued warrants to purchase 202,350 shares of Athena Bitcoin, Inc.'s common stock for $14.0 million. The warrants provide for a right to purchase common stock in Athena Bitcoin, Inc., priced at $2.00 to $3.00 per share, at an average exercise price of $2.49 per share. The warrants were classified as equity. In January 2020, warrants to purchase 102,350 shares of Athena Bitcoin, Inc. common stock at an average exercise price of $2.00 per share were exercised.

The unexercised warrants to purchase 100,000 shares of Athena Bitcoin, Inc. common stock, at an exercise price of $3.00 per share, were outstanding as of December 31, 2024 and expired on May 30, 2025.

**NOTE 12. RELATED PARTY TRANSACTIONS**

Aside from the transactions discussed in NOTE 9. NOTES PAYABLE to these condensed consolidated financial statements, the Company continues to carry a payables balance to Red Leaf Opportunities Fund LP, an entity in which Eric Gravengaard, one of the Company's principal shareholder, former director and former Chief Executive Officer, has a controlling interest in the General Partner, Red Leaf Advisors LLC, for previous purchases of crypto assets. The outstanding balance due to Red Leaf Opportunities Fund LP as of September 30, 2025 and December 31, 2024, was $63 thousand and $407 thousand, respectively, and is recorded in accounts payable, related-party in the condensed consolidated balance sheets.

The Company incurred cash logistics services of $1.7 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively, and $5.3 million and $3.7 million for the nine months ended September 30, 2025 and 2024, respectively with Move On Security LLC. Mr. Matias Goldenhörn, the Chief Executive Officer and director of the Company, has a 50% interest in Move On Security LLC. Included in the balance of accounts payable, related-party are the amounts due to Move On Security, LLC of $265 thousand and $246 thousand as of September 30, 2025 and December 31, 2024, respectively.

On February 7, 2024, the Company entered into a service agreement with Move On Tech Service, LLC to provide ATM services for the Company's ATM operations in various states. Move On Tech Service, LLC is responsible for ATM management, periodic ATM maintenance, installation, and deinstallation. The Company incurred $542 thousand and $1.1 million in services for the three months ended September 30, 2025 and 2024, respectively, and $1.8 million and $2.9 million in services with Move On Tech Service, LLC for the nine months ended September 30, 2025 and 2024, respectively. Included in the balance of accounts payable, related-party are the amounts due to Move On Tech Service, LLC of $121 thousand and $165 thousand as of September 30, 2025 and December 31, 2024, respectively.

**NOTE 13. FEES ON VIRTUAL VAULT SERVICES** 

Virtual Vault is a term used in the Armored Car and Cash Transport industry to define a service provided by armored car services for assets considered property of the bank when the bank does not have a physical vault or location in a given state or location. The fees for virtual vault services included in the Company's condensed consolidated statements of operations and comprehensive income (loss) are for a currency availability service provided to the Company by its bank for making funds held in a virtual vault immediately available to the Company. Neither the term nor the service is related to virtual currency or crypto assets.

Fees on Virtual Vault Services were $403 thousand and $451 thousand for the three months ended September 30, 2025 and 2024, respectively, and $1.2 million and $1.6 million for the nine months ended September 30, 2025 and 2024, respectively.

**NOTE 14. INCOME TAXES**

The Company's effective tax rate ("ETR") for the three months ended September 30, 2025 and 2024 was (19.7%) and 35.2%, respectively, and 34.0% and 31.5% for the nine months ended September 30, 2025 and 2024, respectively. ETR of (19.7%) for the three months ended September 30, 2025 and 31.5% for the nine months ended September 30, 2025 differed from than the U.S. statutory rate of 21.0% due to the tax benefit of operating losses, state income taxes, foreign income taxes, and deferred tax assets.

**NOTE 15. COMMITMENTS AND CONTINGENCIES**

The Company, from time to time, might have claims against it incidental to the Company's business including but not limited to tax demands and penalties. While the outcome of any of these matters cannot be predicted with certainty, management does not believe that the outcome will have a material adverse effect on the accompanying consolidated financial statements.

*<u>Employee Bonuses</u>*

 

The Company has accrued $2.1 million and $2.1 million as of September 30, 2025 and December 31, 2024, respectively, of bonuses to employees and management of the Company and were included in accounts payable and accrued expenses. The bonuses are based on the Company's performance objectives that were achieved during the respective years. The bonuses for the year ended December 31, 2024, were paid on March 14, 2025. Performance bonuses are based on management's periodic review and the amounts are accrued monthly.

*<u>Legal Matters</u>*

On October 9, 2023, Arley Lozano-Jaramillo ("Lozano"), an individual, commenced proceedings against the Company by filing a complaint with the 11th Judicial Circuit Court for Miami-Dade County, Florida (the "Court") which named the Company as the defendant. Lozano, either individually or through the entities controlled by him (XPay, Vakano Industries) entered into certain non-binding letters of intent on July 13, 2021 and as of September 2021 (the second letter of intent was a draft and not signed by the parties) pursuant to which Lozano was a seller of certain assets and technology related to XPay Wallet, intellectual property regarding the AthenaPay POS System, XPay POS System and related technology (the "XPay Assets") for the proposed purchase price of $3.0 million and 270,000,000 shares of common stock of the Company (valued at $0.10 per share). The acquisition of the XPay Assets was subject to the execution of a definitive acquisition agreement. No such agreement was finalized nor entered into by the parties. The Company made payments to Lozano for a total amount of approximately $1,600 and Lozano transferred the ownership of XPay Assets to the Company. Lozano alleges breach of contract, promissory estoppel, unjust enrichment, fraud in the inducement and conversion. He asserts the claim for failure to compensate Lozano pursuant to the terms of the purchase price provided in the non-binding letter of intent (and the unsigned draft letter of intent), which includes the remaining amount of the purchase price ($1.4 million) and 270,000,000 shares of the Company's common stock. Lozano did not offer any evidence of a signed and binding acquisition agreement. The claim also seeks an award for legal and other costs relating to the proceeding.

The Company disputes the allegations and continues to vigorously defend against them. Accordingly, the Company filed with the Court on February 9, 2024, a motion to dismiss Lozano's complaint. The Court granted the Company's motion in part and denied in part, dismissing two of the five causes of action. The Company proceeded to file its counter-complaint against Plaintiff who presented his answer on October 6, 2024. The potential loss related to the identified claim is between $0 and $1.4 million and the issuance of 270,000,000 shares of common stock valued at $27.0 million, the amount of damages that Lozano is seeking in the lawsuit. The additional costs mentioned in the claim are not able to be estimated at this time. The Company does not believe that it is probable that a liability has been incurred September 30, 2025 and December 31, 2024, related to this lawsuit. The case is currently in the discovery phase and trial is scheduled for March 2, 2026.

On June 21, 2024, Digital Access, LLC, a Michigan limited liability company ("Digital Access") and two additional co-defendants, filed a complaint against Athena before the US District Court for the Eastern District of Michigan. The complaint alleges tortious interference with business relationships and business expectancy, statutory and common law conversions, and trespass to chattels and seeks injunctive relief. The case was removed to the U.S. District Court for the Northern District of Indiana. Although the Company did not believe that there was any merit to the allegations against it, a mutually acceptable settlement was reached by the parties that concluded the case. The parties completed the agreement and its requirements. The corresponding court entered an Order of Dismissal on March 25, 2025.

On August 20, 2024, Keon Jackson ("Jackson"), an individual, commenced what was entitled as a "Class Action Complaint" against Athena, filed at the US District Court for the Northern District of Florida (the "Court"). The complaint alleges receipt of unwanted telemarketing text messages in contravention to Federal and State statutes while seeking class certification status. The claim by Jackson is for the award of the statutory amounts as established in the corresponding statutes. On June 18, 2025, the Court issued an Order Granting Motion for Class Certification. Additionally, on July 16, 2025, the Court entered an Order granting in part and denying in part Jackson's motion for summary judgment. The Court did grant Jackson's summary judgment under the Florida Telephone Solicitation Act ("FTSA"), in 4,512 instances and where this statute establishes a penalty of $500 per instance. The Court did not adjudicate at that time if violations occurred under the federal Telephone Consumer Protection Act of 1991 ("TCPA"), and such question will be decided in a trial on the merits. The Company continues its attempts to engage in new discussions to entertain a settlement with Jackson. Discovery between the parties has concluded, and the trial on the remaining issues is scheduled to commence on January 20, 2026, with an estimated time of two weeks.

On September 9, 2024, S.M. on behalf of herself and all others ("S.M."), an individual, filed a complaint that includes class action allegations, against Athena, Genesis Coin, Inc., and two other defendants, filed at the Common Pleas Court at Cuyahoga County, Ohio. The complaint against Company alleges negligence and violations to the Ohio Products Liability Act because of alleged elder financial scams involving cryptocurrency and the operation of kiosks. S.M. alleges the need for implementing effective and sufficient checks and procedures both at the kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what the Company already has in place. The claim by S.M. against Athena is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. On October 25, 2024, S.M. filed its First Amended Class Action Complaint. But the case has been removed to the US District Court for the Northern District of Ohio, Eastern Division, where a motion to dismiss remains pending a decision from the court.

The motion to dismiss filed by Athena continues to be pending, and the parties await for this decision from the Court. There have been no new filings in the case made by S.M. pertaining to any additional amendment to her complaint.

On November 25, 2024, Karen Carew on behalf of herself and all others ("Carew"), an individual, filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Monmouth County (the "State Court"). The complaint against Athena alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. Carew alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what already Athena has in place. The claim by Carew against Athena is for an undetermined amount of compensation (which cannot exceed $5,000,000 under the Class Action Fairness Act of 2005) as well as injunctive relief.

After removing the case to Federal Court, the case got remanded back to State Court as Carew filed an amended complaint removing all class action allegations, and becoming a sole plaintiff. Caren then filed a second amended complaint on July 16, 2025 at the State Court where she is still the sole plaintiff. A motion to dismiss filed by Athena is pending resolution from the State Court.

The Company disputes the claims and believes that the allegations are based on flawed legal theories and incorrect factual assumptions, and the Company intends to vigorously defend itself against these claims and allegations. Although the outcome of any litigation is inherently uncertain and may be materially adverse, based on current information, our management does not expect this litigation to have a material adverse effect on our financial condition and results of operations.

On January 21, 2025, Girma Yilma on behalf of himself and all others ("Yilma"), an individual, filed a complaint that includes class action allegations, against Athena, and two other retail establishments as defendants, filed at Colorado's Arapahoe County District Court. The complaint against the Company alleges negligence and violations to various Colorado statutes such as its consumer protection act, civil theft, unjust enrichment, negligence and negligent design. As in the previous two cases filed by the same plaintiff's law firm, it alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond to what the Company already has in place. The claim by Yilma against the Company is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable.

Athena filed a motion to compel arbitration on March 21, 2025. After the Court was fully briefed, the case was administratively closed and referred to obligatory arbitration on August 13, 2025. Yilma initiated the arbitration proceedings under JAMS as established in Athena's Terms of Service.

On January 31, 2025, Zamareeh Odoms ("Odoms"), an individual, through counsel sent an extrajudicial claim for $500 thousand against Athena. The claim alleges lack of proper due diligence when recruiting or supervising an employee, agent or representative that caused damages to his person for alleged insults and verbal aggressions made while in the common areas of the office building. However, the individual involved that caused the alleged claims by Odoms is not an employee, agent or representative of the Company, the alleged actions were not within the scope of any duties for Athena and Athena had no control over his employment, actions, or behavior because there is no employment relationship. Therefore, the Company's assessment of this case at this time is there is no liability by Athena.

No actions have been served upon Athena pertaining to any lawsuit that may have been filed by Odoms. However, the statute of limitation for a tort action in the State of Florida is 2 years, if not properly tolled. Thus, Odoms still has at least a year to file any judicial claims against Athena.

On February 6, 2025, Diane Reynolds on behalf of herself and all others ("Reynolds"), an individual, filed a complaint that includes class action allegations, against Athena and another codefendant, filed at the Circuit County Court of Montgomery in Maryland. The complaint was served upon Athena on March 24, 2025. The complaint against Athena alleges violations to Maryland's Safe Act, negligence, product liability because of defective design, and violation of the State's Consumer Protection Act. Similar to the previous akin cases, (i.e., the cases above of S.M. filed on September 9, 2024 and Girma Yilma filed on January 21, 2025) but using a different law firm this time, Reynolds alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what already Athena has in place. The claim by Reynolds against Athena is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief.

On February 26, 2025, the State of Iowa through its Attorney General ("Iowa"), filed separate complaints against Athena competitors Lux Vending, LLC, Bitcoin Depot Operating, LLC (both "Bitcoin Depot"), and GPD Holdings LLC d/b/a CoinFlip ("CoinFlip") (all collectively "Competitors"). Iowa alleges violations to the State's Consumer Fraud Act by the Competitors. Also, Iowa further advises that they had subpoenaed fourteen (14) companies and that "[t]he investigation into crypto ATM companies is ongoing."

In the complaints against Competitors, it is requested by Iowa for civil penalties of up to $40 thousand per violation of the Consumer Fraud Act because of any misrepresentation, deception or unfair practices. Additionally, it demands the reimbursement of funds of the full transaction to defrauded victims, and a penalty of $5.0 million for each violation committed against an older individual. Although Athena believes that its operations can be clearly distinguished, Athena has received multiple requests for information from Iowa in matters substantially similar to those related to the complaints against Competitors. There is no money or invoices owed by the Company to the undersigned for this matter.

Despite the pair of requests for information and production of documents, Athena has not been served with, nor is it aware of any, civil action filed against it by Iowa similar to those of the Competitors.

On May 30, 2025, Rachael Gnadinger, Madeline McCausland, and Joanne Nebus-Horning, on behalf of themselves and others similarly situated (collectively, "Gnadinger"), filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Middlesex County. The complaint against Athena alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. Gnadinger alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what Athena already has in place. The claim by Gnadinger against Athena is for an undetermined amount of compensation (which cannot exceed $5,000,000 under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. Athena has requested the removal of the case to the US District Court for the District of New Jersey. However, Gnadinger has moved to request the case be remanded back to the State Court in a September 15, 2025 filing. Therefore, at this time, the parties continue to await the Federal Court's decision to remand or not the case to the State Court. Once the decision is made, remanded or not, Athena will then move to request that two of the claimants be compelled to arbitrate in accordance to the Terms of Service in effect at the time of their transactions.

On September 8, 2025, the District of Columbia (the "<u>District</u>"), through the Office of the Attorney General, filed a complaint against Athena in the Superior Court of the District of Columbia Civil Division. Pursuant to the complaint, the District alleged that Athena failed to disclose excessive fees and to protect consumers in violation of the District's Consumer Protection Procedures Act ("<u>CPPA</u>") and Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act (the "<u>Financial Exploitation Act</u>"). Specific causes of action include allegations of (1) deceptive trade practices in violation of the CCPA; (2) unfair trade practices in violation of the CCPA; and (3) violations of the Financial Exploitation Act. The lawsuit seeks a declaratory judgment that Athena violated the CPPA and Financial Exploitation Act; a permanent injunction enjoining Athena from violating the Financial Exploitation Act and CPPA, and requiring Athena to (a) remove unconscionable contract terms, including its no-refunds policy, its cap on refunds, and its liability limitation clauses; (b) fully disclose all transaction fees, including the actual percentage markup above the market rate, at the point of sale before consumers insert cash; and (c) institute and implement adequate fraud prevention measures, including appropriate daily and monthly transaction limits and effective fraud detection protocols; enjoin Athena from engaging in money transmissions in the District of Columbia until Athena has required licenses; order Athena to pay damages and restitution for the entire transaction amounts it is alleged to have collected in violation of the CPPA and Financial Exploitation Act; order Athena to pay damages and restitution, for all undisclosed fees it collected within the District in violation of the CPPA and Financial Exploitation Act; award civil penalties of $10,000 for each violation of the Financial Exploitation Act; award civil penalties of $5,000 for each violation of the CPPA; and award the District the costs of the action and reasonable attorneys' fees. On October 31, 2025, ABI filed a motion to dismiss and is currently awaiting the District's opposition, after which ABI will have an opportunity to reply.

On September 23, 2025, AML Software, Inc. ("AML") filed a complaint against Athena, Taproot, PSBC, and Jordan Mirch, an individual, in the United States District Court for the Southern District of Florida (Case 1:25-cv-24378). The complaint alleges, among other things, that Athena and the other defendants misappropriated AML's proprietary Bitcoin kiosk software source code. The claims asserted include copyright infringement (against all defendants), contributory and vicarious infringement (against Taproot, PSBC and Mr. Mirch), vicarious copyright infringement (against Mr. Mirch), misappropriation of trade secrets under the Defend Trade Secrets Act (against all defendants), unfair competition (against Athena, Taproot and PSBC), and conversion (against all defendants). AML seeks injunctive relief, return or destruction of all versions of the software code, damages including actual, statutory, and exemplary damages, disgorgement of profits, attorneys' fees, and costs. The complaint alleges that Athena knowingly obtained and used AML's copyrighted source code through transactions with other defendants and used it on approximately 2,800 Bitcoin kiosks. AML contends that Athena entered into agreements with related entities and ultimately paid approximately $9 million for the kiosks and associated software, which AML claims improperly included its proprietary source code.

At this stage, Athena is unable to predict the outcome of this litigation or reasonably estimate the potential loss or range of loss, if any. The Company intends to vigorously defend itself against these claims and allegations. As the case has just commenced, Athena is in the process of securing counsel, and as of this date it is yet to be served with or answer the complaint.

On November 6, 2025, plaintiff Chris Vaughan filed a putative nationwide class action complaint against ABI in the United States District Court for the Southern District of Florida. The complaint names only ABI as defendant and asserts claims under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. §§ 501.201 et seq., and what plaintiff terms the "Florida Financial Exploitation of Vulnerable Adults Act," Fla. Stat. § 825.103. Plaintiff alleges that ABI operates Bitcoin ATMs ("Kiosks") nationwide and has imposed excessive and insufficiently disclosed fees through fee-inclusive exchange rates, misleading or incomplete disclosures, and unfair refund practices, including with respect to scam victims and vulnerable consumers. The putative class consists of all persons in the United States who, during the applicable statute of limitations, used an Athena kiosk to purchase cryptocurrency and were charged a "Kiosk Fee." Plaintiff seeks injunctive relief, restitution, disgorgement, damages, civil penalties, and attorneys' fees and costs. As of the date of this letter, ABI has only recently become aware of the lawsuit, does not concede the accuracy of the allegations, intends to vigorously defend against the action, and is evaluating available defenses. At this early stage, ABI is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.

We believe we have strong arguments against these open claims and litigation matters and plan to defend ourselves vigorously in these matters.

In addition to the above, from time to time, we are subject to allegations from various U.S. states that our activities constitute those of a money transmitter, and allegations that we failed to register as a money transmitter in those states. To date we have agreed to various consent orders and settlements with such states, none of which represent material amounts of penalties, assessments or fees, to settle such claims. The outcome of such ongoing and future allegations, complaints, claims and litigation cannot be predicted.

Occasionally we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters arising, for the most part, in the ordinary course of business. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings, to which we are a party, and we record a loss contingency when it is probable a liability has been incurred, and the amount of the loss can be reasonably estimated. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates.

*<u>Operating Leases</u>*

The Company has entered into certain leases primarily for ATM retail spaces and ATM machines. Operating lease expense is recognized in continuing operations by amortizing the amount recorded as an asset on a straight-line basis over the lease term. The operating lease expense is presented consistently with cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss). In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

Balance sheet information related to operating right-of-use assets and lease liabilities consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | September 30, <br> 2025 | December 31, <br> 2024 |
| Right-of-use assets – operating leases | $33651 | $33613 |
| Operating lease liabilities, current portion | 10753 | 9627 |
| Operating lease liabilities, net of current portion | 22898 | 23986 |
| Total operating lease liabilities | $33651 | $33613 |

---

Other supplemental information related to operating leases was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | September 30, <br> 2025 | September 30, <br> 2024 | September 30, <br> 2025 | September 30, <br> 2024 |
| Weighted-average remaining lease term (in years) | 3.34 | 2.80 | 3.34 | 2.80 |
| Weighted-average discount rate | 15% | 15% | 15% | 15% |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
| Operating cash flows from operating leases (in thousands) | 4123 | 2892 | 11290 | 8150 |

---

The discount rates used in measuring the lease liabilities was based on the Company's incremental borrowing rate.

As of September 30, 2025, the Company's operating leases have remaining lease terms of up to 5 years, some of which include optional renewals or terminations, which are considered in the Company's assessments when such options are reasonably certain to be exercised. Any variable payments related to the lease will be recorded as lease expense when and as incurred. Variable payments are not based on an index or rate and relate to common area maintenance or ATM relocation expenses. As of September 30, 2025, the operating leases that have been contracted for but have not yet commenced are immaterial.

The components of operating lease cost recognized in the condensed consolidated financial statements were as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
| *(in thousands)* | September 30, <br> 2025 | September 30, <br> 2024 | September 30, <br> 2025 | September 30, <br> 2024 |
| Operating lease cost | $4123 | $2892 | $11290 | $8150 |
| Short term lease cost | 65 | 505 | 216 | 1201 |
| Variable lease cost | 162 | 114 | 2090 | 341 |
| Total lease cost | $4350 | $3511 | $13596 | $9692 |

---

The reconciliation of future lessee lease payments under noncancelable operating leases in which the Company has a lease liability, reflected in the Company's condensed consolidated balance sheets as of September 30, 2025 is presented in the table below (in thousands):

---

| | |
|:---|:---|
|  | Operating<br> Leases |
| 2025 | $3733 |
| 2026 | 13826 |
| 2027 | 11698 |
| 2028 | 8792 |
| 2029 | 3767 |
| hereafter | 1135 |
| Total lease payments | $42951 |
| Less: Imputed interest | (9300) |
| Present value of lease liabilities | $33651 |

---

 

*<u>Finance Leases</u>*

On November 2, 2023, the Company entered into a finance lease with Taproot, in which the Company agreed to lease certain Bitcoin ATMs over a three-year term, with the expectation that the Company will take title of the Bitcoin ATMs prior to the end of the term. As a result of the anticipated transfer of ownership, this meets the definition of a Finance Lease under ASC 842.

Financing lease expense is comprised of both interest expense, which will be recognized using the effective interest method, and amortization of the right-of-use assets. These finance lease expenses are presented consistently with other interest expense and amortization or depreciation of similar assets. In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

The discount rates used in measuring the lease liabilities was based on the Company's incremental borrowing rate.

The components of finance lease cost recognized in the condensed consolidated financial statements were as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the nine months ended | For the nine months ended |
|  | September 30, <br>2025 | September 30, <br>2024 | September 30, <br>2025 | September 30, <br>2024 |
| Amortization of right-of-use-assets | $– | $87 | $– | $262 |
| Interest on lease liabilities | – | 29 | – | 110 |
| Total finance lease expense | $– | $116 | $– | $372 |

---

**NOTE 16. OFF-BALANCE SHEET ARRANGEMENTS**

In the normal course of business, the Company's contract with the government of El Salvador for the operation of the Chivo branded ATMs obligates the Company to assume the risk of loss for funds used in the operation of the Chivo branded ATMs while those funds are in transit. The Company has contracted with licensed and insured cash logistics companies to securely transport these funds. The logistics companies' insurance covers in full the value of the funds in transit, however, in the event of a loss or destruction of the funds in transit, the Company could encounter a timing delay between insurance payment for lost funds and the date of actual loss. The amount of funds in transit varies based on multiple factors including but not limited to economic activity, seasonality, holiday and bank closure calendars. The amount of funds in transit as of September 30, 2025 and December 31, 2024, was $1.2 million and $4.7 million, respectively.

**NOTE 17. SUBSEQUENT EVENTS**

On November 6, 2025, plaintiff Chris Vaughan filed a putative nationwide class action complaint against ABI in the United States District Court for the Southern District of Florida. The complaint names only ABI as defendant and asserts claims under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. §§ 501.201 et seq., and what plaintiff terms the "Florida Financial Exploitation of Vulnerable Adults Act," Fla. Stat. § 825.103. Plaintiff alleges that ABI operates Bitcoin ATMs ("Kiosks") nationwide and has imposed excessive and insufficiently disclosed fees through fee-inclusive exchange rates, misleading or incomplete disclosures, and unfair refund practices, including with respect to scam victims and vulnerable consumers. The putative class consists of all persons in the United States who, during the applicable statute of limitations, used an Athena kiosk to purchase cryptocurrency and were charged a "Kiosk Fee." Plaintiff seeks injunctive relief, restitution, disgorgement, damages, civil penalties, and attorneys' fees and costs. As of the date of this letter, ABI has only recently become aware of the lawsuit, does not concede the accuracy of the allegations, intends to vigorously defend against the action, and is evaluating available defenses. At this early stage, ABI is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.

The Company has evaluated subsequent events after the balance sheet date of September 30, 2025, through November 13, 2025, the date on which these condensed consolidated financial statements were available to be issued.

**ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*General Information*

The following discussion is based upon our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q (this "Report") which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC. All references to years relate to the calendar year ended December 31st of the particular year.

This information should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our Final Prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) on May 16, 2025.

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited condensed consolidated financial statements included above under "Part I – Financial Information" – "Item 1. Financial Statements". Please see the section entitled "Glossary of Bitcoin and Crypto Terms" for a list of abbreviations and definitions commonly used in the crypto industry which are used throughout this Report.

Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the®,™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies' trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information and have not commissioned any such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under, and incorporated by reference in, the section entitled "*Item 1A. Risk Factors"* of this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to the Company, is also based on our good faith estimates.

See also "Cautionary Note Regarding Forward-Looking Statements", above, which includes information on forward-looking statements used herein and other matters which are applicable to this Report, including, but not limited to this "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations."

Unless the context requires otherwise, references to the "Company," "we," "us," "our," "Athena", "Athena Bitcoin" "ABIT" and "Athena Bitcoin Global" refer specifically to Athena Bitcoin Global and its consolidated subsidiaries.

In addition, unless the context otherwise requires and for the purposes of this Report only:

"Exchange Act" refers to the Securities Exchange Act of 1934, as amended;

"SEC" or the "Commission" refers to the United States Securities and Exchange Commission; and

"Securities Act" refers to the Securities Act of 1933, as amended.

*Additional Information*

Since our initial Form S-1 Registration Statement was declared Effective on May 14, 2025, we have been subject to the reporting requirements of Section 15(d) of the Securities Act and file annual, quarterly, and current reports, and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's website at www.sec.gov and are available for download, free of charge, soon after such reports are filed with or furnished to the SEC, on the "Company"—"Investors"— "Financials"—"SEC Filings" page of our website at www.athenabitcoin.com. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is www.athenabitcoin.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

*Reverse Stock Split*

As previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 10, 2025, on July 7, 2025, the majority stockholders of the Company, holding an aggregate of 7,062,449 shares of common stock or 51.7% of the Company's then total voting shares as of the July 2, 2025 record date for the Written Consent (as defined below), following the recommendation of the Board of Directors of the Company, took action via a written consent to action of the majority shareholders in lieu of a meeting of shareholders (the "Written Consent"), and voted to approve, among other things, the filing of a Certificate of Amendment to the Company's Articles of Incorporation, as amended, to effect a reverse stock split of the Company's issued and outstanding shares of common stock, par value $0.001 per share, by a ratio of one-for-three hundred (the "Reverse Stock Amendment" and the "Reverse Stock Split"). The Reverse Stock Split will have no effect on the Company's authorized shares of common stock or preferred stock or the par value of the Company's common stock or preferred stock. The Reverse Stock Split has not been implemented to date and the Reverse Stock Amendment has not been filed with the Secretary of State of Nevada to date. As a result, the effects of the Reverse Stock Split have not been affected throughout this Report. The Company may abandon the Reverse Stock Split or may seek stockholder approval to adjust the Reverse Stock Split ratio in the future.

*Going Concern and Management Liquidity Plans*

As of September 30, 2025, we had an accumulated income of $7.1 million and a working capital deficit of $5.9 million, and for the nine months ended September 30, 2025, net income of $1.6 million and cash provided by operating activities of $7.7 million. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company is self-funded and generates sufficient cash to fund its global operations through its operations.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Additionally, wherever possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock, preferred stock or warrants to purchase shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders, but subject to Nasdaq rules and regulations (which generally require shareholder approval for any transactions which would result in the issuance of more than 20% of our then outstanding shares of common stock or voting rights representing over 20% of our then outstanding shares of stock, subject to certain exceptions), to issue all or part of the authorized but unissued shares of common stock, preferred stock or warrants to purchase such shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management's ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.

*Organization of MD&A*

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Business Overview and Recent Events.** A summary of the Company's business and certain material recent events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Significant Financial Statement Components.** A summary of the Company's significant financial statement components.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Consolidated Results of Operations**. An analysis of our financial results comparing the three and nine months ended September 30, 2025 and 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Liquidity and Capital Resources**. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Critical Accounting Policies and Estimates**. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

· **Recently Issued Accounting Pronouncements.** A description of any recently issued accounting pronouncements which are material to the Company.

**Business Overview and Recent Events**

This MD&A and the related unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, primarily cover the operations of Athena, which is an active participant in the operation of Bitcoin ATMs in the United States and Latin America. More broadly we operate in the market of retail sales of crypto assets, where we facilitate small purchases of Bitcoin. There are multiple avenues that retail consumers, individuals purchasing small amounts from one dollar to a few thousand dollars' worth, can purchase or dispose of crypto assets. We have several products in our platform that include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Athena Bitcoin ATMs;

· Athena Plus;

· White-label Service;

· Athena Pay;

· Ancillary; and

· Athena Bitcoin Affiliates Program.

*Athena Bitcoin ATMs*

The Company is focused on developing, owning and operating a global network of Athena Bitcoin ATMs, which are free standing kiosks that permit customers to either buy or sell Bitcoin (two-way ATMs) in exchange for fiat currencies or to just have the ability to buy Bitcoin (one-way ATMs) in exchange for fiat currencies. The Company also offers personalized services ("Athena Plus") for the purpose of selling and buying crypto assets. The Company places its ATMs in convenience stores, shopping centers, and other easily accessible locations. Our network presently includes ATMs in thirty-four U.S. states, the territory of Puerto Rico and 4 countries in Central and South America. We seek to expand our network in the U.S. and globally, and to further develop Athena Bitcoin as a trusted and preferred brand for parties seeking to exchange fiat currency for Bitcoin.

See table below for our ATM breakdown by country, as of September 30, 2025.

**NUMBER OF ATMs BY COUNTRY**

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| | | | |
|:---|:---|:---|:---|
| **Country** | **Number of Athena Bitcoin ATMs**<br> **(as of September 30, 2025)** | **Number of Athena Bitcoin ATMs**<br> **(as of September 30, 2025)** | **Type of Fiat Currency** |
| **Country** | **Total** | **Two-Way** | **Type of Fiat Currency** |
| United States | 3,184\* | – | U.S. Dollar |
| El Salvador | 18\* | 18\* | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| **TOTAL** | **3225** | **41** |  |

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\*Excludes Chivo-branded ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service.

Customers can purchase as little as $1 of Bitcoin but normally choose between $100 and $1,000 using Athena Bitcoin ATMs. The typical ATM that the Company operates is about 5-feet tall and features a large touchscreen for customer interaction. The customer typically needs to have a wallet application on their smart phone to buy or sell Bitcoin on our ATM. To initiate the transaction, the customer will follow the steps prompted on the screen. When a customer is buying Bitcoin, the machine will require the customer to insert paper Fiat Currency since our ATMs do not accept debit or credit cards. When the transaction is complete, a receipt will print showing exactly how many crypto assets have been bought and the receiving address. The Company's ATMs do not contain the crypto asset's private key. The Company sells Bitcoin from cloud-based wallets in each country, enabling real-time supply of crypto assets to its customers.

We offer bitcoin for sale at all of our ATM machines. See below for a summary of transactions by crypto asset for the nine months ended September 30, 2025 and September 30, 2024 .

**SUMMARY OF TRANSACTIONS BY CRYPTO ASSET**

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| | | |
|:---|:---|:---|
| **Crypto Asset** | **For the**<br> **Nine Months Ended**<br> **September 30, 2025** | **For the**<br> **Nine Months Ended**<br> **September 30, 2024** |
| Bitcoin | 170309 | 128056 |
| **Total** | 170309 | 128056 |

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The Company buys most of its crypto assets through automated purchases on crypto exchanges and with digital assets trading firms based on algorithms the Company has developed for balancing its holdings with anticipated demand. The Company is also active in the over-the-counter dealer market and has bilateral relationships with several large crypto asset trading desks. We replenish our supply of Bitcoin, multiple times daily as needed, and hold Bitcoin in our wallet to sell to users of our ATMs. On average, we sell our holdings of Bitcoin within 2 days of purchase, and we previously sold our holdings of Ethereum, Litecoin and Bitcoin Cash holdings within 7 to 10 days of purchase. At this time, we only transact in Bitcoin at our machines. We strive to keep holding periods short to reduce the effect of changes in Bitcoin/U.S. Dollar exchange rates on our business and to maximize our working capital. We do not invest or have long term holdings of Bitcoin, Ethereum, Litecoin or Bitcoin Cash BCH.

We charge a fee per crypto asset available through our Athena Bitcoin ATM, equal to the prevailing price at U.S.- based exchanges plus a markup that typically ranges between 13% and 28%. The prices shown to customers on our Bitcoin ATM are inclusive of this price spread and are calculated by multiplying the prevailing price level of crypto asset by one plus the markup. The markup varies by location. It is determined by a proprietary method that is maintained as a trade secret. Our revenues associated with our ATM transactions are recognized at the time when the crypto asset is delivered to the customer's wallet.

For the nine months ended September 30, 2025, and September 30, 2024, the average markup by crypto asset sold for each period was as follows:

**AVERAGE MARKUP BY CRYPTO ASSET SOLD**

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| | | |
|:---|:---|:---|
| **Crypto Asset** | **For the**<br> **Nine Months Ended<br> September 30, 2025** | **For the**<br> **Nine Months Ended<br> September 30, 2024** |
| Bitcoin | 23% | 23% |
| **Total (Average)** | 23% | 23% |

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*Athena Plus*

Our Athena Plus service allows us to assist crypto asset buyers and sellers who wish to use their bank accounts. Through Athena Plus, we also generate revenue by selling Bitcoin directly to institutional traders, individuals and organizations. These transactions are typically done through the phone for amounts that exceed $10,000. The Company utilizes Bitcoin on hand and additional purchases, if necessary, to provide Bitcoin for the transaction. We charge a fee per Bitcoin available, equal to the prevailing price at U.S.- based exchanges plus a markup.

*White-label Service* 

 

The Company began working with the Government of El Salvador in June 2021 to support the implementation of its new Bitcoin Law, which went into effect in September 2021 and made Bitcoin legal tender in El Salvador through January 29, 2025. To assist the Government of El Salvador with adoption of Bitcoin as legal tender, the Company provided the white-label service discussed below, as well as certain ancillary services which went into effect in September 2021 and made Bitcoin legal tender in El Salvador. These ancillary services were provided to Chivo, a private company incorporated under the laws of the Republic of El Salvador, which is politically controlled by the Government of El Salvador. However, six articles of the Bitcoin Law were modified and three others were repealed as of January 29, 2025. Under the new rules, Bitcoin is no longer considered "currency," or "legal tender." Another change makes using Bitcoin entirely voluntary. Previously, the law mandated that businesses accept Bitcoin for any goods or services they provided. Additionally, Bitcoin can no longer be used to pay taxes or settle government debts. These changes are not expected to harm our operations because our Bitcoin ATM services in El Salvador do not depend on mandatory Bitcoin usage; rather, they cater to organic consumer demand. We believe demand for Bitcoin transactions will continue to be driven by individuals who choose to use Bitcoin. Our role as an ATM operator for Chivo remains unchanged whereby we continue to manage the Bitcoin ATMs on the government's behalf under our fixed-fee service arrangement.

 

The government is also stepping back from its involvement in Chivo Wallet, the state-backed digital wallet, by either transferring it to private sector management or terminating the program, as part of the country's agreement with the International Monetary Fund. We believe this development may open opportunities for private companies (including the Company) to fill any service gaps left by the government's reduced role. We have assessed the legislative changes and the Chivo transition, and do not foresee a negative impact on our business, in part because our existing ATM operations and customer base in El Salvador are expected to continue without disruption. There is no assurance that our assessment may not change depending on any future legal, political or economic changes in El Salvador.

This white-label service is comprised of installing and operating 242 ATMs for Chivo. Our services provide Company owned ATMs to Chivo, which we operate on their behalf. These ATMs are located in El Salvador and in their consulates and other locations in the United States. In the U.S., the Company operated a total of 44 ATMs in service for Chivo as of September 30, 2025. Our responsibilities to operate the ATMs include ensuring that the ATMs have sufficient cash, performing repairs and maintenance, loading and unloading cash, setting up the network connections, and software upgrades, as necessary. We charge a separate monthly fixed fee to operate the ATMs. We also charge a separate fixed fee for installation of the ATM as determined by an applicable contract. The fixed fees provided in the contract are not the same for each ATM and depend on the location of the ATM. The Company does not sell crypto assets to the users of the machine, as the crypto assets are the property of the Government of El Salvador. The Company developed the Chivo Ecosystem and Chivo Website, which acts as El Salvador's Bitcoin ecosystem (i.e., Bitcoin digital wallet and platform). The development of the Chivo Ecosystem and Website was completed in 2021. The Company continued to provide support services to Chivo during fiscal year 2022 to assist with the Chivo Ecosystem, as necessary. Since the initial installation of the agreed upon ATMs, the Company only provides on-going support services for these ATMs. The Company has not installed any new white-label ATMs in fiscal years 2022, 2023, or 2024, or during 2025 to date. The Company provided no services related to the Chivo ecosystem in fiscal years 2023 or 2024, or during 2025 to date.

*Athena Pay* 

Athena Pay is a payment processor application ("app"); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin.

 *Ancillary* 

 

The Company engages in ancillary services to customers as part of its mission to bring the new digital financial system to the world. This includes the sale of point-of-sale terminals ("POS Terminals") and developing crypto ecosystems. In 2021, the Company agreed to develop and support the Chivo Ecosystem for the El Salvadoran government. The Chivo Ecosystem acts as the interface to El Salvador's Bitcoin Digital Wallet and Website for El Salvador and its users. The Company's contract to develop the Chivo Ecosystem ended December 31, 2021. The Company continued to provide support services to the El Salvadoran government during fiscal year 2022 to assist with the Chivo Ecosystem, as necessary. The Company provided no services related to POS terminals and/or developing crypto ecosystems to Chivo in the nine months ended September 30, 2025 and 2024 or the fiscal year 2024.

*Athena Bitcoin Affiliates Program*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Athena Bitcoin Affiliates Program provides Bitcoin ATM operators with a turnkey solution, offering software, compliance support, cash management, and marketing services to streamline operations and maximize profitability. This turnkey solution is for participating independent Bitcoin ATM operators ("Affiliates") who will be able to leverage the Company's established platform and services to manage their own Bitcoin ATMs more efficiently. The material terms of the program include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Services Offered:* Affiliates receive access to our proprietary ATM software platform (including regular updates and maintenance), compliance support (such as anti-money laundering (AML) and "know your customer" (KYC) procedures developed by the Company), cash management guidance (e.g. armored transport coordination and vaulting services), and marketing support to help drive customer traffic to their ATMs.

· *Fee Structure:* Affiliates are charged a monthly service fee, or they participate in a revenue share arrangement (a percentage of transaction revenues) with the Company in exchange for the above services. The exact terms may vary by affiliate contract, but generally the Company's compensation is tied to the affiliate's transaction volume (revenue-sharing) and/or fixed fees for software licensing and support.

· *Affiliate Obligations:* Affiliates retain ownership of their ATMs but are required to adhere to our operational standards and compliance protocols. For example, Affiliates must implement the KYC/AML processes we provide and maintain their machines in accordance with the Company's guidelines. This ensures a consistent and secure experience across the extended network of ATMs.

· *Future Milestones:* The Affiliates Program was launched in late 2024 (pilot phase) and fully rolled out in June 2025. A near-term milestone is to onboard additional ATM operators in key markets throughout 2025, which we believe will increase transaction volume and expand our brand presence without requiring significant capital expenditure by the Company. Our goal is to have a certain number of affiliate-operated ATMs live by the end of 2025. We also state that the program's progress will be evaluated by metrics such as the number of affiliate ATMs deployed, and the incremental revenue generated for the Company. No assurances can be made that we will be successful in achieving our goals with respect to future milestones.

***Recent Events***

During the second quarter of 2024, the Company entered into a Development Services Agreement with PSBC, LLC, a third-party Delaware corporation, for a software platform to use in connection with the operation of Bitcoin ATMs. The Company implemented and began to use the software platform in June 2024.

On May 14, 2025, the Company entered into a Second Amendment to the Development Services Agreement with PSBC, LLC, pursuant to which PSBC, LLC agreed to provide support services through November 14, 2025, and agreed to pay PSBC, LLC, $50 thousand per month beginning on May 14, 2025, and each month thereafter through November 14, 2025.

On September 4, 2025, the Company entered into a Release and Termination Agreement with Taproot Acquisition Enterprises, LLC, a Delaware limited liability company ("Taproot"), and its affiliated entities (the "Taproot Parties") to terminate and settle all outstanding obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. Under the terms of the Release and Termination Agreement, the Company agreed to pay the Taproot Parties an aggregate Termination Payment of $9.0 million, consisting of an upfront payment of $3.0 million upon execution of the agreement and weekly installments of $115.4 thousand over 52 weeks. Upon payment in full, all security interests, liens, and other encumbrances under the prior agreements will be released, and all outstanding obligations between the parties were deemed satisfied and discharged.

At the date of settlement, the carrying amount of the debt obligation under the Equipment Financing Agreement was $4.3 million. The Company also recorded the following items associated with the extinguishment of debt:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) $3.2 million, related to the Equipment Financing Agreement and 2024 Financing Royalty Buy-Out, representing the lump-sum buy-out of a 0.5% vendor participation obligation.

b) $300 thousand, related to the Location Referral Agreement and Location Agreement Buy-Out, representing the lump-sum buy-out of a referral revenue share obligation.

c) $1.1 million, recorded as a settlement premium, representing the excess of the total settlement consideration over the carrying amount of the extinguished obligations.

During the three and nine months ended September 30, 2025, the Company recorded a loss of $4.6 million, included in loss on extinguishment of debt expense in the condensed consolidated statements of operations and comprehensive income (loss), and $681 thousand of unamortized imputed interest, included in other (income) expense in the condensed consolidated statements of operations and comprehensive income (loss).

**Significant Financial Statement Components**

*<u>Condensed Consolidated Balance Sheets</u>*

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***Cash and Cash Equivalents***

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash maintained at various financial institutions, cash in transit, and cash in ATMs owned and leased by the Company.

The Company maintains cash balances at various financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per institution. The Company has deposits in excess of the FDIC-insured limit. The Company has not experienced any losses in such accounts and believes that it is not exposed to significant credit risk due to the financial position of the depository institutions, third-party crypto exchanges or investment vehicles in which those deposits are held. The Company has significant cash in ATMs, held on various third-party crypto exchanges and in transit with cash logistic providers. Cash in transit consists of cash that is picked up by armored truck companies from the Company's ATMs but not yet deposited in the Company's bank accounts. Management evaluates cash in transit based on outstanding cash deposits on cash picked up by the armored truck companies, historical cash deposits and cash that is lost during transit. The armored truck companies maintain insurance over theft and losses.

***Crypto assets held***

The Company's crypto assets are Bitcoin and Tether (USDt) and they are considered indefinite-lived intangible assets and are initially measured at cost and are not amortized. As intangible assets, Bitcoin and Tether held are initially recorded at cost. However, effective as of January 1, 2025, the Company began measuring crypto assets held at fair value. The Company determines the fair value of its Bitcoin based on quoted (unadjusted) prices on CoinMarketCap.

The Company purchases Bitcoin, which is held in the Company's hot wallets, on a just-in-time basis to facilitate sales to customers and mitigate exposure to volatility in Bitcoin prices. As of July 19, 2023, the Company only transacts in Bitcoin at its ATMs in exchange for cash, on a predetermined markup at the time of the transaction. However, there may be multiple days between the purchase of the Bitcoin and the sale of the Bitcoin. When Bitcoin is sold to customers, the Company recognizes the market value of the crypto asset within cost of revenue.

***Property and equipment***

Property and equipment is mostly composed of ATM equipment which are depreciated over a three-year period.

 ****

*<u>Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)</u>*

 **

***Cost of revenues***

 **

Cost of revenues consists primarily of expenses related to the acquisition of Bitcoin; including the costs to purchase Bitcoin from users of the Company's ATMs and from third-party exchanges and cost of revenues includes the costs of operating the ATMs from which Bitcoin are sold (including the associated rent expense, related incentives, ATM cash losses, software licensing fees for the ATMs, depreciation, insurance, and utilities), crypto asset valuation changes and fees paid to service the ATMs and the transport of cash to the banks.

 **

***Technology and development***

 **

Technology and Development consist primarily of staff salaries and other staff-related costs plus server costs.

It is expected that the technology and development expenses will increase over the next several years to support our expanding activities and the commercialization of other products and services. These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure and the need for additional servers.

***General and administrative***

General and administrative expenses consist primarily of staff salaries and other staff-related costs (for everyone at Athena except for the technology & development team and the marketing team), personnel in executive, commercial, finance, accounting, legal, and investor relations.

Other significant general and administrative costs include costs relating to facilities and overhead costs, legal fees relating to corporate matters, litigation, SEC filings, insurance, investor relations costs, fees for accounting and consulting services, and other general and administrative costs. General and administrative costs are expensed as incurred, and we accrue amounts for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from our service providers and adjusting our accruals as actual costs become known.

It is expected that the general and administrative expenses will continue to fluctuate depending on sales volume over the next several years to support our activities, potential commercialization of other product and service candidates and the increased costs of operating as a public company. These expenses are anticipated to include costs related to the hiring of personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and costs associated with being a public company, as well as expenses related to services associated with maintaining compliance with SEC requirements, insurance and investor relations costs.

***Sales and marketing***

Sales and marketing consist principally of the marketing staff and marketing management salaries and other staff-related costs.

Other significant sales and marketing expenses include costs relating to the website and trade shows.

It is expected that the sales and marketing expenses will also fluctuate over the next several years to support our activities, and potential commercialization of other products and services. These expenses are expected to include costs related to the hiring of personnel and participation in trade shows.

***Fees on virtual vault services***

 ****

Virtual Vault is a term used in the Armored Car and Cash Transport industry to define a service provided by armored car services for assets in custody of the bank when the bank does not have a physical vault or location in a given state or location. The fees for virtual vault services included in the accompanying consolidated statement of operations and comprehensive income are for a currency availability service provided to the Company by its bank for making funds held in a virtual vault immediately available to the Company. Neither the term nor the service is related to virtual currency or crypto assets.

 ****

**Consolidated Results of Operations**

The majority of the numbers presented below are rounded numbers and should be considered as approximate.

***For the Three and Nine Ended September 30, 2025 Compared to the Three and Nine Ended September 30, 2024***

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the nine months ended** | **For the nine months ended** |
| *(in thousands)* | **September 30,**<br> **2025** | **September 30,**<br> **2024** | **September 30,**<br> **2025** | **September 30,**<br> **2024** |
| Revenues | $57414 | $69406 | $192852 | $221737 |
| Cost of revenues | 50205 | 61322 | 169730 | 190108 |
| Gross profit | 7209 | 8084 | 23122 | 31629 |
| Operating expenses: |  |  |  |  |
| Technology and development | 431 | 376 | 1281 | 904 |
| General and administrative | 3234 | 2689 | 9698 | 7356 |
| Sales and marketing | 423 | 542 | 1426 | 1424 |
| Other operating expense | 254 | 349 | 1070 | 767 |
| Total operating expenses | 4342 | 3956 | 13475 | 10451 |
| Income from operations | 2867 | 4128 | 9647 | 21178 |
| Interest expense | 170 | 201 | 702 | 1698 |
| Fees on virtual vault services | 403 | 451 | 1240 | 1557 |
| Loss on extinguishment of debt | 4602 |  | 4602 |  |
| Other (income) expense | 746 | (3) | 744 | 107 |
| Income (loss) before income taxes | (3054) | 3479 | 2359 | 17816 |
| Income tax expense (benefit) | (603) | 1224 | 804 | 5609 |
| Net income (loss) | $(2451) | $2255 | $1555 | $12207 |

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<u>Revenues</u>

We recognized revenues of $57.4 million during the three months ended September 30, 2025, as compared to revenues of $69.4 million for the three months ended September 30, 2024, representing a decrease in revenues of $12.0 million or 17%. For the nine months ended September 30, 2025 revenue of $192.9 million was recognized, as compared to revenues of $221.7 million for the nine months ended September 30, 2024, representing a decrease in revenues of $28.9 million or 13%. The decreases in revenues are attributable to market uncertainty which resulted in decreases in the sales prices per transaction. We believe that the uncertainty in the market was triggered by geopolitical and economic changes triggered by new tariffs, fears of inflation and employment instability in the U.S.

<u>Cost of revenues</u>

We incurred cost of revenues of $50.2 million for the three months ended September 30, 2025, compared to cost of revenues of $61.3 million for the three months ended September 30, 2024, representing a decrease in cost of revenues of $11.1 million or 18%. For the nine months ended September 30, 2025 cost of revenues of $169.7 million were incurred, as compared to the cost of revenues of $190.1 million for the nine months ended September 30, 2024, representing a decrease in cost of revenues of $20.4 million or 11%. The decreases in cost of revenues are attributable to a decrease in the corresponding sales of Bitcoin as described above and a decrease in the volume of Bitcoin acquired. As the uncertainty in the market accelerated, the price of Bitcoin also decreased.

<u>Gross profit</u>

We realized gross profit of $7.2 million during the three months ended September 30, 2025, as compared to gross profit of $8.1 million for the three months ended September 30, 2024, representing a decrease in gross profit of $875 thousand or 11%. For the nine months ended September 30, 2025, gross profit of $23.1 million was recognized, as compared to the gross profit of $31.6 million for the nine months ended September 30, 2024, representing a decrease in gross profit of $8.5 million or 27%. As discussed above, the decreases in gross profit are attributable to decreases in revenues that resulted from market uncertainty which further resulted in a decrease in the sales price per transaction, offset by decreases in cost of revenues, resulting from the decrease in the volume of Bitcoin acquired. We believe that the uncertainty in the market was triggered by geopolitical and economic changes triggered by new tariffs, fears of inflation and employment instability in the U.S.

<u>Technology and development</u>

We incurred technology and development expenses of $431 thousand for the three months ended September 30, 2025, compared to expenses of $376 thousand for the three months ended September 30, 2024, representing an increase in technology and development expenses of $55 thousand or 15%. For the nine months ended September 30, 2025, we incurred technology and development expenses of $1.3 million, compared to technology and development expenses of $904 thousand for the nine months ended September 30, 2024, representing an increase in technology and development expenses of $377 thousand or 42%. The increases in technology and development expenses are attributable to the expansion of the Company's technology teams and additional infrastructure to support our expanding activities and the commercialization of other products and services.

<u>General and Administrative</u>

We incurred general and administrative expenses of $3.2 million and $2.7 million for the three months ended September 30, 2025 and 2024, respectively, representing an increase of $545 thousand or 20%. For the nine months ended September 30, 2025, we incurred general and administrative expenses of $9.7 million and $7.4 million for the nine months ended September 30, 2024, representing an increase in general and administrative expenses of $2.3 million or 32% The increases resulted from an increase in (i) salaries attributable to additional personnel and b) the hiring of additional management, (ii) legal fees relating to corporate matters, litigation and SEC filings such as our recent filings of resale registration statements on Form S-1, (iii) insurance as we increased limits on most of our coverages and (iv) fees for accounting and consulting services which increased due to meeting the additional filing requirements as a public reporting company, and more complicated tax issues compared to the previous filing for the three and nine months ended September 30, 2024.

<u>Sales and Marketing</u>

We incurred sales and marketing expenses of $423 thousand during the three months ended September 30, 2025, as compared to sales and marketing expenses of $542 thousand for the three months ended September 30, 2024, representing a decrease in sales and marketing expenses of $119 thousand or 22%, which is attributable to decreases in sales and marketing initiatives as the proper programs to address the sales decrease are evaluated. For the nine months ended September 30, 2025 we incurred sales and marketing expenses of $1.426 million, as compared to sales and marketing expenses of $1.424 million for the nine months ended September 30, 2024, representing a nominal increase in sales and marketing expenses of $2 thousand or 0%. Although there was an increase in marketing personnel and more participation in trade shows during the first six months of 2025, there was a significant decrease in sales and marketing initiatives during the three months ended September 30, 2025 as the proper programs to address the sales decrease are evaluated. Essentially, for the nine months ended September 30, 2025 and 2024, the sales and marketing expenses were similar.

<u>Interest Expense</u>

We incurred interest expense of $170 thousand during the three months ended September 30, 2025, as compared to interest expense of $201 thousand for the three months ended September 30, 2024, representing a decrease in interest expense of $31 thousand or 15%. For the nine months ended September 30, 2025, we incurred interest expense of $702 thousand, as compared to interest expense of $1.7 million for the nine months ended September 30, 2024, representing a decrease in interest expense of $996 thousand or 59%. The decreases are attributable to the repayment, during the nine months ended September 30, 2024, of a Senior Secured Loan Agreement, as amended and Senior Secured Revolving Credit Promissory Note with KGPLA Holdings LLC ("KGPLA"), an entity in which Mike Komaransky, a former director and principal shareholder of the Company has a controlling interest and whose Chief Investment Officer is Huaxing "Jason" Lu, our director.

<u>Extinguishment of Debt</u>

As part of the Release and Termination Agreement dated September 4, 2025, with Taproot and the Taproot Parties discussed above under "Recent Events", the buy-out provisions of the Equipment Financing Agreement and the Location Referral Agreement were accelerated and included in the refinancing of the balance due on all Taproot loans. These buy-out amounts were expensed as of September 4, 2025.

<u>Net Income (Loss)</u> 

We had a net loss of $2.5 million for the three months ended September 30, 2025, compared to a net income of $2.3 million for the three months ended September 30, 2024, representing a decrease in net income of $4.7 million or 209%. For the nine months ended September 30, 2025, net income is $1.6 million, as compared to $12.2 million for the nine months ended September 30, 2024, representing a decrease in net income of $10.7 million or 87%. The decreases in net income are the result of the factors described in the sections discussed above and mostly attributable to the 13% decrease in revenues in addition to the non-recurring loss on extinguishment of debt expense of $4.6 million recorded in the condensed consolidated statements of operations and comprehensive income (loss), and $681 thousand of unamortized imputed interest included in other (income) expense in the condensed consolidated statements of operations and comprehensive income (loss).

**Liquidity and Capital Resources**

As of September 30, 2025 and December 31, 2024, we had cash balances of $17.4 million and $17.6 million, respectively (including restricted cash held for customers of $2.8 million and $122 thousand, respectively). The Company also had working capital deficits of $5.9 million and $2.5 million, respectively, largely due to operating lease liabilities, current portion of $10.8 million and $9.6 million as of September 30, 2025 and December 31, 2024, respectively.

For the nine months ended September 30, 2025 and 2024, cash provided by operating activities was $7.7 million and $18.4 million, respectively.

Our cash provided by operations for the nine months ended September 30, 2025 was primarily attributable to our net income of $1.6 million, adjusted for increases of (i) $6.9 million in depreciation and amortization, (ii) $599 thousand in Bitcoin payments for expenses, (iii) $4.6 million of losses on extinguishment of debt, and (iv) $681 thousand of unamortized imputed interest that was written-off, which was offset by decreases of $5.4 million in net cash used to fund changes in the levels of operating assets and liabilities, mainly due to an increase of $3.0 million in crypto assets held, an increase of $1.8 million in accounts receivable and a decrease of $3.9 million in accounts payable and other liabilities, a decrease of $521 thousand in prepaid expenses and other assets, and an increase of $2.7 million in liability for cash held for customers.

Our cash provided by operations for the nine months ended September 30, 2024 was primarily attributable to our net income of $12.2 million, adjusted for increases of $3.2 million in depreciation and amortization, and $6.8 million in Bitcoin payments for expenses which was offset by decreases of $4.8 million in net cash used to fund changes in the levels of operating assets and liabilities, mainly due to an increase of $7.8 million in crypto assets held, an increase of $485 thousand in accounts receivable and an increase of $4.0 million in accounts payable and other liabilities, and an increase of $1.4 million in prepaid expenses and other assets, offset by a increase of $779 thousand in liability for cash held for customers.

For the nine months ended September 30, 2025 and 2024, cash used in investing activities was $1.1 million and $9.4 million, respectively, made up solely of purchases of property and equipment and capitalized software.

For the nine months ended September 30, 2025 and 2024, cash used in financing activities was $6.7 million and $5.5 million, respectively. Cash used in financing activities during the nine months ended September 30, 2025 was mainly due to repayment of debt of $435 thousand and payments in reduction of equipment notes payable of $6.7 million. Cash used in financing activities during the nine months ended September 30, 2024 was mainly due to repayment of debt and financing agreements of $5.7 million.

Our material cash requirements and time periods of such requirements from known contractual and other obligations amount to, in the aggregate, approximately $16.6 million for the remainder of 2025 and $37.7 million for the years 2026 through 2029 which we expect will be met through our ongoing operations. However, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for redeploying ATM equipment and pursuing other initiatives.

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

**Key Performance Indicators and Non-GAAP Financial Measure and Trends**

*Athena Bitcoin ATMs*

The number of Athena Bitcoin ATMs increased from 3,111 to 3,225 or 4% from December 31, 2024 to September 30, 2025, respectively.

*Transactions*

Median ATM transaction size for Bitcoin decreased from $180 to $120, or 33% while the number of transactions increased from 128,056 to 170,309, or 33% during the nine months ended September 30, 2024 and 2025, respectively.

Median OTC transaction size for all crypto assets decreased from $48,600 to $16,000 or 67% while the number of transactions increased from 39 to 153 or 292% during the nine months ended September 30, 2024 and 2025, respectively.

*Adjusted EBITDA*

We use Adjusted EBITDA as a non-GAAP financial measure. We define Adjusted EBITDA as net earnings attributable to Athena Bitcoin Global stockholders plus the following items: interest expense, fees on virtual vault services; income tax expense; one-time expenses (credit loss, loss on debt extinguishment); and depreciation and amortization. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and other companies in our industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. The Company's presentation of this measure should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion. You should review the reconciliation of net income to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. The Company believes that Adjusted EBITDA is a more relevant supplemental measure of performance than other GAAP performance measures. Adjusted EBITDA as presented in this Report is a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. Management presents the non-GAAP financial measure of Adjusted EBITDA because it considers this to be an important supplemental measure of performance. Management believes that this non-GAAP financial measure provides additional insight for analysts and investors evaluating the Company's financial and operational performance by providing a consistent basis of comparison across periods.

**ADJUSTED EBITDA**

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| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2024** |
| Net income (loss) | $(2451) | $2255 |
| Adjusted to exclude the following: |  |  |
| Interest expense | 170 | 201 |
| Fees on virtual vault services | 403 | 451 |
| Income tax expense (benefit) | (603) | 1224 |
| One-time expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Credit losses | 681 | 340 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 4602 |  |
| Depreciation and amortization | 2254 | 1453 |
| Adjusted EBITDA | $5056 | $5924 |

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2024** |
| Net income | $1555 | $12207 |
| Adjusted to exclude the following: |  |  |
| Interest expense | 702 | 1698 |
| Fees on virtual vault services | 1240 | 1557 |
| Income tax expense | 804 | 5609 |
| One-time expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Credit losses | 1438 | 726 |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment | 4602 |  |
| Depreciation and amortization | 6869 | 3219 |
| Adjusted EBITDA | $17210 | $25016 |

---

**Key Factors Affecting Our Performance**

The performance of our business operations has been and will continue to be affected by a number of factors, including;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The price and volatility of crypto assets

· Adoption of crypto assets as a medium of exchange by merchants and their trading partners

· Adoption of crypto assets as a store of value by investors

· The total number of Bitcoin ATMs could reach a saturation in the markets where the Company operates, and the demand, as measured on a per Bitcoin ATM basis, would decrease

· Investments made by the Company, including in new technologies and strategic acquisitions

· Ability to determine the transaction fee for ATM transactions

· Product and service offerings, including potentially increasing its white-label service offerings.

· Regulations in U.S. and international market

· Access to supply of new ATM machines from third-party manufacturers

***Recent Financing Transactions***

 

*<u>Equipment notes payable</u>*

 

On September 19, 2024, the Company and Taproot Acquisition Enterprises, LLC, a Delaware limited liability company, entered into an Omnibus Equipment Refinancing Agreement providing for the refinance of the Company's debt obligations previously incurred in connection with the purchase of Bitcoin ATMs pursuant to the previously entered into equipment financing agreements for the purchase of the equipment by the Company from Taproot. The parties agreed that the total outstanding balance of $2.1 million would be paid by one inception payment of $1.2 million upon the execution of the agreement and followed by weekly payments of $20,000 for a period of 48 weeks. The Omnibus Equipment Refinancing Agreement also contains representations and warranties of both parties with respect to clear and marketable title of the equipment and provides provisions addressing an event of default by the Company as a purchaser of the equipment. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $643 thousand, respectively.

On October 30, 2024, the Company entered into an Equipment Financing Agreement with Taproot (the "Financing Agreement") to purchase certain Bitcoin ATMs listed in the Financing Agreement. The Financing Agreement amends and supersedes previous equipment purchase agreements between the parties. Under the Financing Agreement, the Company will acquire from Taproot installed Bitcoin ATMs or additional Bitcoin ATMs at the price per Bitcoin ATM set forth in the Equipment Agreement. The downpayment was to be paid in 4 installments with the first payment due and paid by the Company as of October 31, 2024, and the last payment due by January 31, 2025; which last payment was made on January 27, 2025. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $5.8 million, respectively.

In addition, the Company agreed to pay a fee equal to 0.8% of the revenue (to be paid weekly) derived from the sale of Bitcoin in each Bitcoin ATM location until the expiration of the term of the Financing Agreement (36 months) or until full payment of total purchase price for the equipment subject to certain additional limitations. The Financing Agreement also provides the provisions addressing the event of default by either Taproot or the Company, and respective available remedies. Certain property on which the equipment units are located are subject to merchant agreements (as listed in the Financing Agreement), and the Financing Agreement provides for assignment and assumption of merchant agreements and leases, as may be applicable. Furthermore, Taproot is to maintain a first priority interest on the Bitcoin ATMs until fully paid for. In connection therewith, the Company, Taproot and KGPLA Holdings LLC, an entity in which Mike Komaransky, a former director and principal shareholder of the Company has a controlling interest and whose Chief Investment Officer is Huaxing "Jason" Lu, our director, entered into a First Amendment to the Intercreditor Agreement dated as of October 23, 2024, pursuant to which KGPLA agreed to the subordination of its first priority security position on collateral of the Company to Taproot. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $0, respectively.

*<u>Short-term debt</u>*

On February 26, 2024, the Company entered into a financing agreement for $170 thousand with National Partners PFco LLC to pay the insurance premium on its directors' and officers' insurance with an annual percentage rate of 8.45% per annum repayable in ten monthly installments beginning March 14, 2024. On October 11, 2024, the Company increased its coverage for the same policy and entered into an additional financing agreement for $170 thousand with an annual percentage rate of 7.95%, repayable in ten monthly installments beginning November 11, 2024. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $140 thousand, respectively.

On December 19, 2024, the Company entered into financing agreements for $116 thousand with National Partners PFco LLC., to pay the insurance premium on its commercial liability insurance with an annual interest rate of 7.95% per annum, repayable in eight monthly installments beginning January 11, 2025. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $116 thousand, respectively.

On May 30, 2025, the Company entered into financing agreements for $280 thousand with E.T.I Financial Corporation, to pay the insurance premium on its cyber, crime and employment practices liability insurance with an annual interest rate of 9.51% per annum, repayable in ten monthly installments beginning June 14, 2025. As of September 30, 2025 and December 31, 2024, the outstanding principal was $172 thousand and $0, respectively.

On September 4, 2025, the Company entered into a Release and Termination Agreement with Taproot, and its affiliated entities to terminate and settle all outstanding obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. Under the terms of the Release and Termination Agreement, the Company agreed to pay the Taproot Parties an aggregate Termination Payment of $9.0 million, consisting of an upfront payment of $3.0 million upon execution of the agreement and weekly installments of $115,400 over 52 weeks. Upon payment in full, all security interests, liens, and other encumbrances under the prior agreements were released, and all outstanding obligations between the parties were deemed satisfied and discharged.

At the date of settlement, the carrying amount of the debt obligation under the Equipment Financing Agreement was $4.3 million. As of September 30, 2025, the outstanding principal was $5.5 million.

*<u>Note payable, Related</u>*-*<u>Party</u>*

As of May 15, 2023, the Company entered into a Senior Secured Loan Agreement, as amended (the "Loan Agreement") and Senior Secured Revolving Credit Promissory Note (the "Revolving Credit Note") with KGPLA. The Revolving Credit Note allowed the Company to borrow up to $4.0 million for the operations of its New Bitcoin ATM Machines, as defined in the Loan Agreement, with a maturity date of May 15, 2024. Revenue share fees for this agreement were calculated based on a percentage of the gross daily receipts generated from these machines and were recorded as part of interest expense in the condensed consolidated statements of operations and comprehensive income (loss). In connection with the above loan transaction and issuance of Revolving Credit Note, the Company granted KGPLA a first priority lien and security interest in and to all of the Company's assets, except for property previously pledged to Banco Hipotecario, which has since been repaid in full, and with respect to such assets, the Company granted KGPLA a second priority lien. On March 28, 2024, the Company repaid the principal amount of $4.0 million (together fees due) on the Senior Secured Revolving Credit Promissory Note due with KGPLA. The debt was settled in full in accordance with the terms outlined in the Revolving Credit Note and was funded using cash reserves generated from the Company's operating activities. The early payoff of this debt resulted in the elimination of revenue share fees. As of September 30, 2025 and December 31, 2024, the outstanding principal was $0 and $0, respectively.

*<u>Convertible debt, related</u>*-*<u>party</u>*

On January 31, 2020, the Company entered into a Secured Convertible Debenture agreement with KGPLA. The Secured Convertible Debenture provided for a principal amount of $3,000,000, with a maturity date of January 31, 2025, which was extended to January 31, 2026. Interest as defined by the agreement is 8% per annum. The Secured Convertible Debenture is convertible into shares of the Company's common stock at a conversion price equal to $0.012 per share or, if lower, a price determined by specified formulas depending on the type of conversion event: (a) upon the next sale (or series of related sales) by the Company of additional equity securities under an exemption from registration available under the rules promulgated under the Securities Act, from which the Company receives gross proceeds of not less than $3,000,000; provided that, for clarification, this is not meant to include any actions or listing for trading on the OTC Markets, the conversion price will be the lesser of (i) the lowest per share purchase price of the equity securities issued in such financing, reduced by a 20% discount, or (ii) the price per share equal to a valuation cap of $70,282,176, divided by the Company's fully diluted capitalization immediately prior to the financing; (b) in the event of our first underwritten public offering of common stock under the Securities Act whereby the our common stock is listed or admitted for trading on a national stock exchange in the United States, as reported on the principal national security exchange or quotation system on which such security is quoted or listed, the conversion price will be the lesser of (i) the lowest per share purchase price of equity securities issued in the IPO, reduced by a 20% discount, or (ii) 90% of the quotient obtained by dividing the Valuation Cap by the fully diluted capitalization immediately prior to the IPO; (c) in connection with a corporate transaction, including certain mergers, consolidations, changes of control or sales of substantially all assets, the conversion price will equal the Valuation Cap divided by the fully diluted capitalization immediately prior to such transaction; and (d) for conversions occurring at or after maturity or at the option of the investor at any time, the conversion price will also equal the valuation cap divided by the fully diluted capitalization immediately prior to such conversion.

Conversions may be made at any time at the option of KGPLA and are generally mandatory upon the closing of a Next Equity Financing or IPO, with principal and accrued but unpaid interest converted into shares of common stock at the applicable conversion price and issued on the same terms as the securities sold in the transaction. In the event of a corporate transaction prior to repayment or other conversion, each holder may elect to receive either (i) repayment equal to all accrued and unpaid interest plus two times the outstanding principal balance, or (ii) shares of common stock issuable upon conversion of the Secured Convertible Debentures based on the applicable conversion price. After the maturity date, or at any time prior to maturity at the option of the investor, a debenture may be converted into shares of common stock at the conversion price then in effect. Interest accrued through the conversion date must be paid in cash, and fractional shares will not be issued but instead rounded down to the nearest whole share.

The Company is required to reserve sufficient authorized shares of common stock to permit conversion of the debentures. If authorized shares are insufficient, the Company's board must promptly call a stockholders' meeting or seek written consent to approve an increase in authorized common stock. Prepayment of the debentures is prohibited without the prior written consent of KGPLA.

As of September 30, 2025 and December 31, 2024, the outstanding principal amount of the debenture was $3 million and $3 million, respectively.

The loan agreement imposes a number of restrictive covenants on the Company and its subsidiaries for so long as any obligations remain outstanding. Without the KGPLA's consent, the Company may not incur additional debt other than debt under the loan documents, certain existing debt (including the Secured Convertible Debenture and debt owed to Banco Hipotecario), certain debt owed to Taproot or unsecured debt incurred after the closing. The Company is also restricted from granting liens on its assets, except for liens under the loan documents, liens in favor of Banco Hipotecario existing on the closing date, or certain permitted tax liens. The Company and its subsidiaries may not merge, consolidate, liquidate, or dissolve except in limited circumstances, and may not engage in businesses other than those conducted on the effective date or reasonably related thereto. The Company is prohibited from disposing of collateral, making voluntary prepayments or amendments with respect to subordinated debt (other than repayment of the specified Secured Convertible Debenture), or declaring or paying dividends or other cash distributions on its equity. In addition, the Company may not amend or modify material contracts in a manner adverse to KGPLA without KGPLA's consent. Material contracts are generally those with consideration of $50,000 or more, or otherwise material to the Company's business, operations, financial condition, or prospects.

The Company is required to make mandatory prepayments of the Secured Convertible Debenture in the event (a) we or any subsidiary incurs debt not otherwise permitted under the agreement (in an amount equal to 100% of the net cash proceeds of the debt incurred); (b) in the event we receive any cash not in the ordinary course of business (in an amount equal to 100% of such cash received); and (c) in the event KGPLA does not consent, we must use 100% of the net cash proceeds we receive from a change of control, any asset sale, or the sale of material assets of the Company to repay the Secured Convertible Debentures.

**Critical Accounting Policies and Estimates**

The Company's unaudited condensed consolidated financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of its assets, liabilities, revenue and expenses. The Company has identified certain estimates as critical to its business operations and the understanding of its past or present results of operations related to intangible assets. These estimates are considered critical because they had a material impact, or they have the potential to have a material impact, on the Company's unaudited condensed consolidated financial statements and because they require management to make significant judgments, assumptions or estimates. The Company believes that the estimates, judgments and assumptions made when accounting for the items described below were reasonable, based on information available at the time they were made. However, actual results may differ from those estimates, and these differences may be material. Our critical accounting estimates are more fully discussed in Note 1 to our unaudited condensed consolidated financial statements contained herein.

<u>Revenue Recognition</u>

The Company derives its recurring revenues primarily from three sources: (i) sale of crypto assets at Bitcoin ATMs (both Athena ATMs and White-label ATMs such as those in El Salvador), (ii) customized investor trading services for the sale or purchase of crypto assets through the Company's Athena Plus desk (referred to as "over-the-counter" or "OTC"), and (iii) Athena Pay which is a payment processor application ("app"); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin. The Company also generates revenue from ancillary items, such as sale of intellectual property and maintenance of software.

Under Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customer, ("FASB ASC 606") the Company recognizes revenue at the point of sale or over time of the service period for these products or services to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Pursuant to FASB ASC 606, the Company recognizes revenue by applying the following steps:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the contract, or contracts, with a customer.

· Identification of the performance obligations in the contract.

· Determination of the transaction price.

· Allocation of the transaction price to the performance obligations in the contract.

· Recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company recognizes revenue when the performance obligations identified under the terms of contracts with its customers are satisfied.

Judgment is required in determining whether we are the principal or the agent in transactions between customers. We evaluate the presentation of revenue on a gross or net basis based primarily on inventory risk (are we at risk for potential fluctuations of the crypto asset price) and whether we control the crypto asset provided before it is transferred to the customer or whether we act as an agent by arranging for others to provide the crypto asset to the customer. The Company determined it acts as the principal in each of its revenue streams. The Company enters into contracts that may include multiple performance obligations. The Company identifies the promises in the contract and assigns them to their appropriate performance obligation. These performance obligations may be part of a different revenue source and are listed separately below.

***Athena ATM & White-label Service***

 

*Athena Bitcoin ATM* 

The Company requires all users of Athena ATMs to agree to the ATM Terms of Service which stipulate the terms and conditions of the transaction. The user, by inserting sovereign currency (known as fiat) and confirming that they agree to the transaction, is agreeing to the contract that governs the transaction.

The Company has a single performance obligation to provide a specific quantity of a Bitcoin to the customer's crypto wallet in exchange for fiat. The Company utilizes a mark-up for crypto assets sold to the customer. Athena ATMs permit customers to purchase as little as one US dollar of Bitcoin, and it records the gross cash received from the customer as the transaction price.

Revenue is recognized at the point in time when the Bitcoin is delivered to the customer's crypto wallet. Delivery to the customer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.

*White-label Service*

In this revenue stream, "client" refers to the entity contracting with the Company while "customer" refers to the person using the White-label ATM. The Company entered into multiple contracts that govern the white-label service for ATMs located in El Salvador and in the United States. The contracts permit the clients to terminate the contract at any point or to adjust the number of ATMs that are in use without a substantive penalty.

The Company operates White-label ATMs on behalf of the clients and the installation of the ATMs is performed by a third-party which is chosen by the White-label ATM client.

The operations, on behalf of the White-label client, include cash logistics services, and testing the ATMs. The Company charges a fixed fee each month for operating the ATMs.

The Company leases Company-owned ATMs to its clients. The Company elected the expedient in FASB ASC 842, Leases ("ASC 842"), which permits combining the lease and non-lease components together if the lease component has the same timing and pattern of transfer as the non-lease component and the lease component is an operating lease. Both of these conditions are met (for a more detailed discussion see *<u>Leases</u>* within NOTE 1 of the unaudited condensed consolidated financial statements).

The Company is considered the principal, as it controls any third-party good or service before it is transferred to the client.

For operating the White-label ATM, revenue is recognized straight line over the requisite service period.

*Athena Plus (Over-The-Counter or OTC)*

The Company requires all users of Athena Plus (a.k.a. "Over-The-Counter" or "OTC") to agree to the Athena Plus Terms of Service. The Athena Plus Terms of Service stipulate the terms and conditions of the transaction. The user, by wiring fiat to the Company's bank account, is agreeing to the contract that governs the transaction.

The Company provides a specific quantity of Bitcoin to the customer's crypto wallet. The Company utilizes a mark-up for crypto assets sold to the customer. The minimum transaction is $10 thousand (or equivalent value of local currency). The Company records the gross cash received from the customer as the transaction price for the transaction.

Revenue is recognized at the point in time when the Bitcoin is delivered to the customer's crypto wallet. Delivery to the customer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.

*Athena Pay*

 

The Company requires all retailers who are using Athena Pay to execute the Athena Pay contract which stipulates the terms and conditions of the transactions. As a payment processor, the Company recognizes a processing fee of approximately 2.5% (average) of the transaction amount, when the transaction occurs (i.e., when the retailer generates the QR code with the specific amount to be charged to the customers in Bitcoin and the transaction is completed).

Revenue is recognized at the point in time when the Bitcoin is delivered to the retailer's crypto wallet. Delivery to the retailer's crypto wallet is governed by the Bitcoin's blockchain and typically occurs in less than an hour from when the transaction is completed.

<u>Expenses Paid in Bitcoin</u>

The Company enters into agreements with certain vendors and service providers that provide us with the option to settle their invoices in crypto assets. The amount due is fixed and is denominated in USD. There are no payment terms that include conversion options, variable settlement features, or alternative settlement provisions contingent upon future events or market price fluctuations that could potentially give rise to embedded derivatives.

The Company considers the guidance in FASB ASC 350, FASB ASC 606, FASB ASC 610, and FASB ASC 845 when it evaluates the derecognition of its crypto assets paid to vendors in lieu of cash payments. In these transactions, we have been invoiced by a vendor and given the option to pay in USD or crypto assets, typically Bitcoin. The amount of Bitcoin is determined by the market price in accordance with the guidance of FASB ASC 820, Fair Value Measurement. The Company records as an expense the USD value of the invoice and then considers the above references to determine the proper way to derecognize the intangible long-lived asset used as payment.

We consider the scoping exceptions for each of those topics and conclude that that the scope of 610-20 most closely matched the facts of the transactions. ASC 610-20-15-2 states "nonfinancial assets within the scope of this Subtopic include intangible assets," which is how the Company treats crypto assets.

We evaluated two possibilities to exclude these transactions from the scope of FASB ASC 845, Nonmonetary Transactions. The relevant exceptions to the scope of that Topic are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The transfer of goods or services in a contract with a customer within the scope of ASC 606 in exchange for noncash consideration (ASC 845-10-15-4(j))

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The transfer of a nonfinancial asset within the scope of ASC 610-20 in exchange for noncash consideration (ASC 845-10-15- 4(k))

For these transactions, our usage of the crypto asset is as a payment instrument to a vendor, therefore our interpretation of (1) above is for ASC 606 not to apply. We interpret (2) above to apply when the Company pays a vendor (who is not a customer) with a crypto asset (nonfinancial asset) in lieu of paying that same vendor with Fiat Currency (USD). Therefore, we account for the derecognition of the crypto assets, in these transactions, under the guidance of ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. This is the same guidance as in ASC 350-10-40-1, Transfer or Sale of Intangible Assets.

ASC 610-20-15-2 explicitly states the scope to include intangible assets. We treat crypto assets as intangible assets. We then apply the general principle of ASC 610-32-2 for recognizing the gain or loss for the difference between the amount of goods or services we receive (fair market value, per ASC 820 Level 2) and the cost of acquiring the crypto asset.

We record invoices from vendors in the appropriate expense category, in the correct time period in which services were provided, in USD and for vendors who elect to be paid in crypto assets, we transfer the crypto assets at market value at the time of transfer in line with ASC 820, Fair Value Measurement. We then recognize as a gain or loss, the difference between the current carrying value of the crypto asset, less impairment and its value at the time of transfer to cost of revenues in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

<u>Income Taxes</u>

We utilize the asset and liability method for computing our income tax provision. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates. Management makes estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits are included in income tax expense in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

For U.S. federal tax purposes, crypto asset transactions are treated on the same tax principles as property transactions. We recognize a gain or loss when crypto assets are exchanged for other property, in the amount of the difference between the fair market value of the property received and the tax basis of the exchanged crypto assets. Receipts of crypto assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.

**Recently Issued Accounting Pronouncements**

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's unaudited condensed consolidated financial statements.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a "smaller reporting company," as defined by Rule 229.10(f)(1).

**Item 4. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

With the participation of the Company's principal executive officer and principal financial officer, management evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2025. Based on their evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were not effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, solely as a result of the material weaknesses in our internal control over financial reporting below.

**Material Weaknesses in Internal Control Over Financial Reporting** 

In connection with the preparation of the Company's consolidated financial statements as of December 31, 2024, management identified material weaknesses in the Company's internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented, or detected and corrected, on a timely basis. The material weaknesses identified relates to (i) the fact that the Company did not have formalized system of internal control over financial reporting in place to ensure that risks are properly assessed, certain accounts are properly reconciled, controls are properly designed and implemented and internal controls are properly monitored and functioning, and (ii) the Company's reliance on IT systems and the use of service organizations to initiate, process, and record transactions, for which it did not evaluate or test the respective control objectives and data provided by the service organizations, and did not maintain a sufficient complement of formally documented general IT controls over access, segregation of duties, security, and change management. Management has concluded that these material weaknesses arose because, the Company did not have the necessary business processes, personnel and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

Effective internal controls are necessary to provide reliable financial reports and prevent fraud, and material weaknesses could limit the ability to prevent or detect a misstatement of accounts or disclosures that could result in a material misstatement of annual or interim financial statements. To address the material weaknesses, the Company will need to add personnel as well as implement additional financial reporting processes and related internal controls. Management intends to continue to take steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, further enhancing their accounting processes and risk assessment, and by designing, implementing and monitoring the respective controls. Management will not be able to fully remediate these material weaknesses until these steps have been completed and the controls have been operating effectively for a sufficient period of time. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects or that the actions that management may take in the future will be sufficient to remediate the control deficiencies that led to the material weaknesses in internal control over financial reporting or that they will prevent or detect potential future material weaknesses. The Company's current controls and any new controls that management develops may become inadequate because of changes in conditions in the business and weaknesses in disclosure controls and internal control over financial reporting may be discovered in the future. We have implemented new quarter-end review checks for EPS, ETR tie-outs and note cross-checks. However, any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm the operating results or cause the Company to fail to meet the reporting obligations and may result in a restatement of the Company's financial statements for prior periods.

Notwithstanding the above identified material weaknesses, management believes the Consolidated Financial Statements as included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, the Company's financial condition, results of operations and cash flows as of and for the periods presented in accordance with generally accepted accounting principles in the United States.

**Changes in Internal Control Over Financial Reporting** 

There was no change in the Company's internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings.**

From time to time, we may be a party to litigation that arises in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We believe the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows.

Such current litigation or other legal proceedings are described in, and incorporated by reference in, this "Item 1. Legal Proceedings" of this Form 10-Q from, "Part I – Item 1. Financial Statements" in the Notes to Unaudited Condensed Consolidated Financial Statements in "Note 15 – Commitments and Contingencies", under the heading Legal Matters. The Company believes that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation or other legal claims could change in light of the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management's evaluation of the possible liability or outcome of such litigation or claims.

Additionally, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management's expectations, the Company's financial condition and operating results for that reporting period could be materially adversely affected.

**Item 1A. Risk Factors.**

***Summary Risk Factors***

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause the Company's actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company's business, financial condition, operating results and stock price.

***Risks Related to Our Business, Operations, and Financial Position***

· **Dependence on Transaction Volume and Volatility:** Our revenue relies heavily on crypto transaction volumes, which fluctuate with volatile crypto prices. Declines in prices or volume, as well as failures of major market participants, could materially harm results and investor confidence.

· **Forecasting Challenges:** Operating in a new, rapidly evolving crypto product market makes forecasting demand, volume, and performance difficult.

· **Indebtedness:** We carry significant debt secured by most assets, with restrictive covenants that limit flexibility. We may lack sufficient cash flow to meet obligations, and raising additional capital may be difficult, forcing operational changes or, in extreme cases, closure.

· **Asset and Private Key Security:** Our cash and crypto assets face risks of theft or loss, especially from compromised private keys. Hacks, breaches, or key loss could cause major financial, regulatory, and reputational damage. Insurance coverage is limited.

· **Operational Disruptions:** Failures in ATMs, software, information technology (IT), or blockchain networks could reduce users, harm our brand, and negatively affect results. Retaining and growing users is critical to our success.

· **International Risks:** Operations in El Salvador and elsewhere create risks from political or economic instability, enforcement issues, and restrictions on asset ownership. Our role in El Salvador's Bitcoin Law and Chivo wallet carries custody and government-related risks.

· **Economic and Market Confidence:** Weak global or regional economies and negative sentiment toward crypto could reduce demand for our services.

· **Intellectual Property:** Inability to protect our IP or defend against infringement claims could disrupt operations.

***Risks Related to the Bitcoin Network, Crypto Assets, and Blockchain Technology***

· **Crypto Nature and Private Keys:** Control depends solely on private keys, which carry theft and loss risks.

· **Development and Acceptance:** Future growth and adoption of Bitcoin, crypto assets, and blockchain protocols are uncertain; if they stall, our business could suffer. Stablecoins may not retain value.

· **Forks and Technical Issues:** Blockchain forks or integration challenges could create instability and harm operations.

· **Transaction Fees:** High miner or validator fees increase costs and reduce margins.

***Risks Related to Regulation, Legal Compliance, and Enforcement***

· **Regulatory Uncertainty:** Crypto laws and regulations are rapidly changing. Reclassification of assets as securities, forfeiture actions, or banking restrictions could harm our business.

· **Licensing and Registration:** Failure to secure required licenses or comply with AML, privacy, and other laws could halt operations or result in penalties.

· **Government Intervention:** Crypto use may be restricted or banned by governments, limiting our ability to operate.

***Risks Related to Employees and Service Providers***

· **Key Personnel:** Loss of senior management or inability to attract talent could hurt performance.

· **Misconduct:** Employee or service provider errors or misconduct could damage financials and reputation.

· **Conflicts of Interest:** Interests in other crypto projects by insiders could create conflicts affecting our business.

***Risks Associated with Governing Documents and Nevada Law***

· **Change of Control Limits:** Provisions in our charter, bylaws, and Nevada law may deter takeovers, affecting stock value.

***Risks Related to Our Securities***

· **No Market / Volatility:** Our stock lacks a trading market and may face volatility unrelated to performance, causing investor difficulty in valuation.

· **Insider Control:** Founders and major shareholders hold significant control, influencing shareholder decisions.

· **Dilution:** Conversion of debentures and future equity raises will dilute shareholders.

· **Stock Price Volatility:** Prices may remain volatile and decline significantly.

***Risks Relating to Our Planned Reverse Stock Split***

· **Uncertain Results:** The reverse split may not satisfy Nasdaq listing requirements and could reduce liquidity.

· **No Sustained Price Increase:** The split may not result in lasting higher prices or attract investors.

**<u>The Most Material Risks Related to Our Business and Financial Position</u>** 

**We might require additional capital to support business growth, and this capital might not be available.**

We have funded our operations since inception primarily through debt and equity financings and revenue generated by our services. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments in our business to respond to business challenges, including deploying more Bitcoin ATMs both in the United States and globally, enhancing our operating infrastructure, expanding our international operations to include additional regions and countries, and acquiring complementary businesses and technologies, all of which may require us to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If we incur additional debt, the debt holders would have rights senior to holders of our common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock.

The trading prices for our common stock may be highly volatile, which may reduce our ability to access capital on favorable terms or at all. In addition, a slowdown or other sustained adverse downturn in the general economic or crypto markets could adversely affect our business and the value of our common stock. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of securities. As a result, our shareholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests. Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.

**Our total revenue is substantially dependent on the volume of transactions conducted by our customers. If such volume declines, our business, operating results, and financial position would be adversely affected.**

We generate substantially all our revenue from the sale of crypto assets to our customers, either using our Bitcoin ATMs or over the phone. Revenue is based on the prices that we charge our customers based on prevailing market prices. This revenue may fluctuate based on the price of crypto assets. As such, any declines in the volume of transactions, the price of crypto assets, or market liquidity for crypto assets generally may result in lower total revenue to us.

The price of crypto assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant volatility. The price and trading volume of any crypto asset is subject to significant uncertainty and volatility, depending on several factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· market conditions across all elements of the crypto-economy;

· our business is in a relatively new consumer product segment, which is difficult to forecast;

· our operating results may fluctuate due to the highly volatile nature of crypto;

· changes in liquidity, market-making volume, and trading activities;

· trading activities on other crypto platforms worldwide, many of which may be unregulated, and may include manipulative activities;

· investment and trading activities of highly active retail and institutional users, speculators, miners, and investors;

· the speed and rate at which crypto assets and specifically Bitcoin can gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all;

· decreased user and investor confidence in crypto assets and associated exchanges and service providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· negative publicity and events relating to Bitcoin, blockchain technology, or the digital currency economy as a whole;

· unpredictable social media coverage or "trending" of Bitcoin or other crypto assets;

· the ability for crypto assets to meet user and investor demands;

· consumer preferences and perceived utility and value of crypto assets and associated markets;

· increased competition from other payment services or other crypto assets that exhibit better speed, security, scalability, or other characteristics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· regulatory or legislative changes and updates affecting the use, storage, ownership, exchange, or any other aspect of the crypto-economy;

· the characterization of crypto assets under the laws of various jurisdictions around the world;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the maintenance, troubleshooting, and development of the blockchain networks underlying crypto assets, including by miners, validators, and developers worldwide;

· the ability for protocol networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently;

· ongoing technological viability and security of protocols and their associated crypto assets, smart contracts, applications, and networks, including vulnerabilities against hacks and scalability;

· fees and speed associated with processing blockchain transactions, including on the underlying protocol networks and on exchanges and other platforms for trading;

· financial strength of wholesale market participants;

· the availability and cost of funding and capital;

· the liquidity of over-the-counter trading desks, market-makers, exchanges, and other wholesale dealers of crypto assets;

· interruptions in service from or failures of major crypto exchanges and platforms;

· availability of banking and payment services to support crypto-related projects;

· global level of interest rates and inflation;

· monetary policies of governments, trade restrictions, and Fiat Currency valuation changes; and

· national and international economic and political conditions.

There is no assurance that any supported crypto asset will maintain its value or that there will be meaningful levels of interest from customers. If the demand for purchasing or selling crypto assets declines, our business, operating results, and financial condition would be adversely affected.

**The prices of Bitcoin and other crypto assets are volatile.**

We generate substantially all of our revenue from the sale of crypto assets to our customers, either using our Bitcoin ATMs or over the phone. Revenue is based on the prices that we charge our customers based on prevailing market prices. The price at which we are able to purchase crypto assets prior to selling those same crypto assets may not be lower than the sale price if the market conditions change between those two points in time. Purchasing Bitcoin or other crypto assets for prices higher than they can be later sold could result in an impairment of the asset value and our operating results could be adversely affected. The value of the entirety of our crypto assets held could be lost if the prices of those crypto assets were to significantly decrease, which would adversely affect our operating results. There are no assurances that the crypto assets we hold will have value from one day to the next and we could suffer a loss if any of the prices of those crypto assets declines or is permanently depressed.

We account for our crypto assets as indefinite-lived intangible assets, which are subject to impairment losses if the fair value of our crypto assets decreased below their carrying value.

**Our transaction volume may be partially dependent on the prices of Bitcoin we sell, which can be volatile. If such prices decline, the volume of user transactions could decrease and our business, operating results, and financial condition would be adversely affected.**

 

We generate substantially all of our revenue from the cash paid by customers to purchase Bitcoin from our ATMs. The number of user transactions and our transaction volumes may be partially dependent on the prices of Bitcoin, as well as the associated demand for buying, selling and trading Bitcoin, which can be and historically have been volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease. As such, any such declines, or any declines in the price of Bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us. The price and trading volume of any cryptocurrency, including Bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· market conditions of, and overall sentiment towards, cryptocurrency;

· changes in liquidity, market-making volume, and trading activities;

· trading activities in cryptocurrency, including on other cryptocurrency platforms worldwide, many of which may be unregulated, and may include manipulative activities;

· investment and trading activities of highly active retail and institutional users, speculators, miners, and investors;

· the speed and rate at which cryptocurrency is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all;

· changes in user and investor confidence in cryptocurrency and cryptocurrency platforms;

· negative publicity and events relating to the digital financial system;

· unpredictable social media coverage or "trending" of, or other rumors and market speculation regarding cryptocurrency;

· the ability for cryptocurrency to meet user and investor demands;

· the functionality and utility of cryptocurrency and its associated ecosystems and networks, including cryptocurrency designed for use in various applications;

· retail user preferences and perceived value of cryptocurrency and cryptocurrency markets;

· increased competition from other payment services or cryptocurrency for which we do not sell that exhibit better speed, security, scalability, or other characteristics;

· regulatory or legislative changes and updates affecting the digital financial system;

· the characterization of cryptocurrency under the laws of various jurisdictions around the world;

· the adoption of unfavorable taxation policies on cryptocurrency investments by governmental entities;

· the maintenance, troubleshooting, and development of the blockchain networks underlying cryptocurrency, including by miners, validators, and the development community;

· the ability for cryptocurrency networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently;

· legal and regulatory changes affecting the operations of miners and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory requirements as a result of growing environmental concerns around the use of energy in mining cryptocurrency, including Bitcoin, and other proof-of-work mining activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· ongoing technological viability and security of cryptocurrency and its associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability;

· fees and speed associated with processing cryptocurrency transactions, including on the underlying blockchain networks and on cryptocurrency platforms;

· financial strength of market participants;

· the availability and cost of funding and capital;

· interruptions in service from or failures of major cryptocurrency platforms;

· availability of an active derivatives market for various cryptocurrencies;

· availability of banking and payment services to support cryptocurrency-related projects;

· level of interest rates and inflation;

· monetary policies of governments, trade restrictions, and Fiat Currency devaluations; and

· national, North American and international economic and political conditions.

There is no assurance that any given cryptocurrency will maintain or increase in value or that there will be meaningful transaction volumes from our users. In the event that the price or trading of, or demand for, cryptocurrency declines, our business, operating results, and financial condition would be adversely affected.

**Bankruptcies of major crypto asset market participants have impacted the broader crypto economy.**

The failure of several prominent crypto trading venues and lending platforms, such as FTX, Celsius Networks and Voyager has impacted and may continue to affect the broader cryptoeconomy. The full extent of these impacts may not yet be known but may include, the consequent and ongoing financial distress and bankruptcy of certain crypto market participants, loss of confidence in the broader cryptoeconomy, reputational harm to crypto asset platforms generally, increased negative publicity of the broader cryptoeconomy, heightened scrutiny by regulators and lawmakers and calls for increased regulation of crypto assets and crypto asset platforms. We have not experienced a material direct impact to our business, financial condition, customers or counterparties from these bankruptcies; however, these bankruptcies did cause a change to crypto market prices, crypto market volatility, crypto market volume and customer sentiment, and each of these drivers do indirectly impact our business and our revenue potential. A combination of such drivers could have been a contributing factor in a decrease in transaction volume that the Company experienced after these bankruptcies. We do not have any known material financial exposure to other cryptoeconomy participants that faced insolvency and liquidity issues, experienced excessive redemptions or suspended redemptions or withdrawals of crypto assets, allegedly mishandled customer funds, or experienced significant corporate compliance failures in connection with these bankruptcies.

**Our business is in a new consumer product segment, which is difficult to forecast.**

Our industry segment is new and is constantly evolving. As a result, there is a lack of available information with which to forecast industry trends or patterns. There is no assurance that sustainable industry trends or preferences will develop that will lead to predictable growth or earnings forecasts for individual companies or the industry segment. We are also unable to determine what impact future governmental regulation may have on trends and preferences or patterns within our industry segment. See "Risk Factors Related to Current and Future Regulations and other Law Enforcement Actions" for a discussion of the risks associated with governmental regulation.

**We have a significant level of indebtedness that may have an adverse impact on us.**

As of September 30, 2025, our total indebtedness, excluding lease liabilities, was $20.685 million including $3 million of secured convertible debenture, $5.538 million of short-term debt (settlement agreement of September 2025), and $172 thousand of insurance financing debt. Our significant level of indebtedness could have important consequences for us, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations and future business opportunities;

· restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

· limiting our ability to obtain additional equity or debt financing for general corporate purposes, acquisitions, investments, capital expenditures or other strategic purposes;

· limiting our ability to adjust to changing business conditions and placing us at a competitive disadvantage to our less highly leveraged competitors; and

· making us more vulnerable to general economic downturns and adverse developments in our business.

The above factors could limit our financial and operational flexibility and, as a result, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, if our debt obligation is not repaid or converted into equity (with respect to the $3 million convertible debenture) prior to its respective maturity date, it will go into default which could cause you to lose a portion or all of your investment in the Company.

**Our secured convertible debentures and senior secured loan agreement with our senior secured lender are secured by substantially all of our assets and contain restrictions that may limit our flexibility in operating our business.**

Our debt obligations as of the date of this Report, under that certain senior secured loan agreement which includes a $3,000,000 amended and restated secured convertible debenture, are secured by substantially all assets of the Company and contain various covenants that limit our ability to engage in specified types of transactions. These covenants may limit our ability to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· incur additional indebtedness;

· pay dividends on, repurchase or make distributions in respect of equity interests or make other restricted payments;

· make certain investments;

· sell certain assets;

· create liens on certain assets to secure debt;

· consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and

· designate our subsidiaries as unrestricted subsidiaries.

Additionally, our senior creditor may enforce its security interests over our assets and/or our subsidiaries which secure the repayment of such obligations, take control of our assets and operations, or force us to curtail or abandon our current business plans and operations. If that were to happen, any investment in the Company could become worthless.

**The future development and growth of crypto assets and protocols is subject to a variety of factors that are difficult to predict and evaluate. If the future does not develop and grow as we expect, our business, operating results, and financial condition could be adversely affected.**

Blockchain technology was only introduced in 2008 and remains in the early stages of development. In addition, different protocols are designed for different purposes. Bitcoin, for instance, was designed to serve as a peer-to-peer electronic cash system, while Ethereum was designed to be a smart contract and decentralized application platform. Many other protocol networks—ranging from cloud computing to tokenized securities networks—have only recently been established. The further growth and development of any crypto assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of crypto assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Many protocol networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective tokens and underlying blockchain networks, any of which could adversely affect their respective usefulness.

· Many networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective crypto networks.

· Several large networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues. If these issues are not successfully addressed, or are unable to receive widespread adoption, it could adversely affect the underlying crypto asset.

· Security issues, bugs, and software errors have been identified with many protocols and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some crypto assets and their networks and protocols, such as when creators of certain crypto networks use procedures that could allow hackers to counterfeit tokens. Any weaknesses identified with a protocol, token or blockchain could adversely affect its price, security, liquidity, and adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the compute or staking power on a crypto network, as has happened in the past, it may be able to manipulate transactions, which could cause financial losses to holders, damage the network's reputation and security, and adversely affect its value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The development of new technology for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks, lead to increased liquid supply of the crypto asset token, and reduce its price and attractiveness.

· If rewards and transaction fees for miners or validators on any protocol network are not sufficiently high to attract and retain miners, a network's security and speed may be adversely affected, increasing the likelihood of a malicious attack.

· The governance of many decentralized blockchain networks is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any crypto network, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network's utility and ability to respond to challenges and grow.

· Many crypto networks are in the early stages of developing partnerships and collaborations, all of which may not succeed and adversely affect the usability and adoption of the respective crypto asset token.

· Various other technical issues have also been uncovered from time to time that resulted in disabled functionalities, exposure of certain users' personal information, theft of users' assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user, and development communities. If any such risks or other risks materialize, and if they are not resolved, the development and growth of crypto assets, blockchain technology, or Bitcoin may be significantly affected and, as a result, our business, operating results, and financial condition could be adversely affected.

**Loss of a banking relationship could adversely impact our business, operating results, and financial condition.**

Athena depends on having regular and normalized access to a bank checking account for normal business purposes and also for taking deposits of the cash received from the ATM fleet. As a money services business registered with the Financial Crimes Enforcement Network ("FinCEN") under the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and its implementing regulations enforced by FinCEN, our banking partners view us as a higher risk customer for purposes of their anti-money laundering programs. We may face difficulty establishing or maintaining banking relationships due to our banking partners' policies and some prior bank partners have terminated their relationship with Athena. The loss of these banking partners or the imposition of operational restrictions by these banking partners and the inability for us to utilize other redundant financial institutions may result in a disruption of business activity as well as regulatory risks. In addition, financial institutions in the United States and globally may, because of the myriads of regulations or the perceived risks of crypto assets, decide to not provide accounts, payments, or other financial services to us. Such events could negatively affect an investment in our common stock.

**We may be unable to generate sufficient cash to service all of our indebtedness and financial commitments.**

 ****

Our ability to make scheduled payments on or to refinance our indebtedness and financial commitments depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions including financial, business and other factors beyond our control. We may be unable to generate sufficient cash flow to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund debt and other obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure our indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to service our debt would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. If we face substantial liquidity problems, we might be required to sell assets to meet debt and other obligations. Our debt restricts our ability to dispose of assets and dictates our use of the proceeds from such disposition.

We may not be able to consummate dispositions, and the proceeds of any such disposition may be inadequate to meet obligations. We may be unable to access adequate funding as a result of a decrease in lender commitments due to an unwillingness or inability on the part of lending counterparties to meet their funding obligations and the inability of other lenders to provide additional funding to cover a defaulting lender's portion. As a result, we may be unable to execute our plan of operations, make acquisitions or otherwise conduct operations, which would have a material adverse effect on our financial condition and results of operations.

**The Company may be forced to cease operations.**

It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the inability by the Company, whether in the United States or globally, to obtain clients, the failure of commercial relationships, the failure of development of the necessary technical environment, the failure of government actors to provide needed regulatory clarity, the failure of technology development by third parties, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve, either in whole or part, or take actions that result in a dissolution event. During the past six years there have been several rumors that regulation specifically aimed at terminating the practice of selling crypto assets via kiosks, such as the Company's fleet of Bitcoin ATMs, would be forthcoming. While the regulations hypothesized by these rumors have never been enacted, the state of California recently enacted two bills collectively known as the Digital Financial Assets Law ("DFAL"), regulating digital assets and restricting operations of financial assets kiosks, it remains a risk to the Company's principal operations and could be detrimental to an investment in our common stock. The DFAL began taking effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2025.

**<u>Other Risk Factors Related to Our Business Operations and Financial Position</u>**

**Currently, there is a small use of Bitcoin in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in our common stock.**

Bitcoin and the Bitcoin Network have only recently become accepted as a means of payment for goods and services by certain major retail and commercial outlets, and the use of Bitcoin by consumers to pay such retail and commercial outlets remains limited. Conversely, a significant portion of Bitcoin demand is generated by speculators and investors seeking to profit from the short- or long-term holding of Bitcoin. A lack of expansion by Bitcoin or other crypto assets into retail and commercial markets, or a contraction of such use, may result in decreased demand for the Company's services or increased demand for services the Company is not able to provide, either of which could adversely affect an investment in our common stock.

**The Company's assets could be stolen and would be difficult to recover due to the nature of cash and crypto assets.**

It is possible that, due to any number of reasons, including, but not limited to, a robbery by either a malicious external actor or an employee of the Company could adversely affect the Company's operations and assets. From time to time, the Company has been the victim of vandalism and targeted attacks on our ATMs, which have resulted in loss of cash and equipment. The Company has also been the target of cyberattacks and has suffered security breaches of its websites, email, cellphones, and other systems related to the operations of the business. On March 31, 2021, we suffered a security breach which resulted in a loss of 29 bitcoin (approximately $1,700,000 of market value as of March 31, 2021). We have initiated two independent investigations of the attack with the assistance of law enforcement and outside counsel. Historically, stolen bitcoin, crypto assets of multiple types, and cash have been difficult to recover by law enforcement or other means due to their fundamental nature as fungible instruments of value. At this time, we have no information regarding whether the stolen crypto assets can be recovered. The Company's losses may negatively affect an investment in the Company's shares. The Company has no knowledge of any material security breach since March 31, 2021.

**Crypto assets and funds that the Company holds on Bitcoin exchanges could be lost, stolen, or otherwise impaired.**

From time to time and for customary reasons of procuring Bitcoin on crypto exchanges. The Company uses Kraken as its primary crypto exchange. The Company carefully selects the platforms that it chooses to do business with; however this may not be sufficient to avoid losses if those exchanges suffer losses or other impairments. In 2018, Quadriga filed for bankruptcy protection following the death of its Chief Executive Officer and subsequent discovery of its insolvency. In addition, several other well-known and highly regarded exchanges have suffered similar fates. For example, in February 2014, Mt. Gox, then the largest bitcoin exchange worldwide, filed for bankruptcy protection in Japan after an estimated 700,000 bitcoin were stolen from its wallets. In May 2019, Binance, one of the world's largest exchanges was hacked, resulting in losses of approximately $40 million. Neither of these incidents had any impact on the Company. Any such losses by an exchange could have a negative impact on the financial position of the Company and adversely impact an investment in our common stock.

**The Company may not always maintain sufficient crypto assets to satisfy customer transaction requests, which could adversely affect its business and results of operations.**

The Company relies on proprietary tools and analytics, together with management's judgment, to monitor its crypto asset holdings and determine the level of crypto assets it believes is necessary to support anticipated customer transactions. If these tools, analytics, or judgments indicate that the Company's holdings are insufficient, the Company seeks to acquire additional crypto assets from liquidity providers. There have been limited instances prior to fiscal year 2023, each lasting less than 24 hours, in which the Company did not maintain adequate levels of crypto assets to permit customer transactions, and during such periods no customer transactions were processed. Although the Company subsequently acquired additional crypto assets and resumed transaction processing, any future failure to maintain sufficient levels of crypto assets could impair the Company's ability to satisfy customer demand, result in lost revenue, and negatively impact the Company's business, financial condition, and results of operations.

**The theft, loss, or destruction of private keys required to access any Bitcoin may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any bitcoin, it could cause regulatory scrutiny, reputational harm, and other losses.**

Bitcoin is generally accessible only by the possessor of the unique private key relating to the digital wallet in which the Bitcoin is held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private to prevent a third party from accessing the Bitcoin held in the applicable wallet. To the extent that any of the private keys relating to our wallets containing Bitcoin held for our own account or our users' private keys relating to their un-hosted wallets is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we or our users will be unable to access the Bitcoin held in the related wallet. Further, we cannot provide assurance that our or our users' wallets will not be hacked or otherwise compromised. Cryptocurrency and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or any hack or other compromise of, digital wallets used to store our users' Bitcoin could adversely affect our users' ability to access or sell their Bitcoin, as well as result in loss of user trust in us. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. However, the Company does not (i) custody Bitcoin purchased by customers, (ii) manage or have access to private keys belonging to customers' personal (un-hosted) wallets, or (iii) hold private keys for users. Customers are solely responsible for their own wallets and private keys. When a customer uses an Athena Bitcoin ATM to purchase Bitcoin, the Bitcoin is directly delivered to a wallet address provided by the user (typically a mobile wallet app). These user wallets are "un-hosted" or self-custodied, meaning the users alone control their private keys.

The risk of loss or compromise of private keys related to Bitcoin owned by the Company is mitigated by our use of a third-party custodian, BitGo Trust Company, Inc. ("BitGo") (a qualified custodian) who has been engaged to secure our digital assets. BitGo manages the private keys for digital wallets holding Bitcoin owned exclusively by the Company (i.e., held for our own account). This means all Bitcoin held as inventory, or held for operational liquidity by the Company, is secured by BitGo, which manages the corresponding private keys on our behalf. If these keys were lost or compromised, BitGo's protocols, including secure backups and recovery processes, would mitigate this risk.

BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions. By entrusting this function to BitGo, we add a layer of security and risk mitigation (given BitGo's expertise and insurance arrangements) beyond what could be achieved with in-house custody.

The Company has a standard service agreement with BitGo under which BitGo safeguards the private keys and crypto assets that the Company deposits with it. BitGo's custodial accounts are segregated and secure, and BitGo carries insurance policies that may cover certain losses (providing an additional layer of protection to the Company). BitGo has and maintains insurance policies for custodial services through Lloyd's of London who provides crime insurance coverage with a limit of $5,000,000 and specie insurance coverage with a limit of $250,000,000. The specie insurance aims to cover the permanent loss of cryptocurrency from its designated blockchain address if an insured event occurs. However, this coverage has significant exclusions, such as theft or dishonesty by key company insiders (like major shareholders or directors, unless they are specifically designated custodians), losses from trading or loan defaults, and issues arising from improperly secured or lost private keys (like those stored on internet-connected devices). It also doesn't cover cryptocurrency network failures or losses not reported promptly, nor does it apply to broader events like war, terrorism, or money laundering.

The crime insurance component addresses risks like employee theft, losses of property at BitGo's premises or during transit, and fraud committed by third parties through computer systems or fund transfers, including related legal expenses. Exclusions under this part include fraud by directors with significant ownership (with some exceptions if they're treated as regular employees), losses from employees known to be previously dishonest, and losses of potential income or trade secrets. It also won't cover issues like accounting errors, mechanical failures, the cryptocurrency's underlying protocol failing, or broader events like war.

BitGo is a qualified custodian regulated by the South Dakota Division of Banking, which provides assurance that our custodied assets are held in a compliant manner.

**Any significant disruption in our ATMs or software, information technology systems, or any of the blockchain networks related to our business, could result in a loss of users or funds and adversely impact our brand and reputation and our business, operating results, and financial condition.**

 ****

Our reputation and ability to attract and retain users and grow our business depends on our ability to operate our products and services at high levels of reliability, scalability, and performance, including the ability to process and monitor, on a daily basis, the transactions that occur across multiple systems. Our ATMs and software, the ability of our users to transact in Bitcoin, and our ability to operate at a high level, are dependent on our ability to access the blockchain networks underlying the supported Bitcoin, for which access is dependent on our systems' ability to access the internet. Further, the successful and continued operations of such blockchain networks will depend on a network of computers, miners, or validators, and their continued operations, all of which may be impacted by service interruptions.

Our ATMs and certain cryptocurrency and blockchain networks have experienced from time to time, and may experience in the future, service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. In addition, extraordinary transactions or site usage could cause our kiosks to operate at an unacceptably slow speed or even fail.

If any of our ATMs are disrupted for any reason, our products and services may fail, resulting in unanticipated disruptions, slower response times and delays in our users' transaction execution and processing, failed transactions, incomplete or inaccurate accounting, recording or processing of transactions, unauthorized transactions, loss of user information, increased demand on limited user support resources, user claims, complaints with regulatory organizations, lawsuits, or enforcement actions. A prolonged interruption in the availability or reduction in the availability, speed, or functionality of our products and services could harm our business. Significant or persistent interruptions in our services could cause current or potential users to believe that our ATMs or software are unreliable, leading them to switch to our competitors or to avoid or reduce the use of our products and services, and could permanently harm our reputation and brands. Moreover, to the extent that any system failure or similar event results in damages to our users, these users could seek significant compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. Problems with the reliability or security of our ATMs or software could cause damage to our reputation and the cost of resolving these problems could negatively affect our business, operating results, and financial condition.

Because we are a regulated money services business in certain jurisdictions, interruptions have resulted and in the future may result in regulatory scrutiny, and significant or persistent interruptions could lead to significant fines and penalties, and mandatory and costly changes to our business practices, and ultimately could cause us to lose existing licenses or banking and other relationships that we need to operate or prevent or delay us from obtaining additional authorizations, registrations or licenses that may be required for our business.

In addition, we are continually improving and upgrading our information systems and technologies. We also rely on technologies developed by others, and if we are unable to continue to obtain licenses for such technologies or licenses to substitute for similar technologies, our business could be adversely impacted. Implementation of new systems and technologies is complex, expensive, time-consuming, and may not be successful. If we fail to timely and successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies, or if such systems and technologies do not operate as intended, it could have an adverse impact on our business, internal controls (including internal controls over financial reporting), operating results, and financial condition.

**The Company does not insure against all potential losses, which could result in significant financial exposure. Additionally*,* our lack of insurance protection for crypto assets held by the Company could adversely impact our business, operating results, and financial condition.**

The Company does not have commercial insurance or third-party indemnities to fully cover all operational risks or potential liability in the event of a significant incident or series of incidents causing catastrophic loss. As a result, the Company is, to a substantial extent, self-insured for such events. The Company relies on existing liquidity, financial resources and borrowing capacity to meet short-term obligations that would arise from such an event or series of events. The occurrence of a significant incident, series of events, or unforeseen liability for which the Company is self-insured, not fully insured or for which insurance recovery is significantly delayed could have a material adverse effect on the Company's results of operations or financial condition.

Additionally, the crypto assets held by us are not insured. We also do not rely on insurance carriers to insure losses resulting from a breach of our physical security, cyber security, or by employee or service provider theft since we do not carry crime insurance. We only maintain a general liability insurance which does not cover crypto assets or breaches described above. Therefore, we may suffer a loss which is not covered by insurance in damages. Such a loss could cause a substantial business disruption of our operations, adverse reputational impact, inability to compete with our competitors, regulatory scrutiny, and consequently, it could adversely impact an investment in our shares of common stock.

**The Company operates in locations outside of the United States and, as such, is subject to additional risks with respect to enforcement of its contractual rights.** 

We currently operate and intend to grow our operations in a number of jurisdictions outside of the United States. Laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses, or our failure to adapt our practices, systems, processes, and business models effectively to the traveler and supplier preferences (as well as the regulatory and tax landscapes) of each country into which we expand, could impede our ability to enter into, negotiate or enforce contracts in those markets. In addition to the other risks described in this Report, our company's international operations would be subject to numerous other risks, including, but not limited to, weaker enforcement of our company's contractual rights, longer payment cycles, and difficulties in collecting accounts receivable.

**The countries, we operate in, may or may not have stable economies, stable banking sectors, or stable governments which may or may not permit us to repatriate profits, maintain ownership of our business or its assets, or continue operations.**

From time to time, certain governments have seized foreign companies, their assets, and/or their operations. It is possible for us to face significant losses if such an event occurs, either specific to us or broadly across the entire country or industry in which we operate. We may, for example no longer be permitted to purchase additional crypto assets, or operate our machines, or return capital or profits to our parent company in the United States. This may result in a total and complete loss of our assets within that country as well as further costs to continue to pay our existing liabilities within that country.

**If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products and services, our business, operating results, and financial condition may be significantly harmed.** 

Our success depends on our ability to retain existing users and attract new users to increase engagement with our products and services. To do so, we must continue to offer leading technologies and ensure that our products and services are secure, reliable, and engaging. We must also expand our products and services and offer competitive transaction and other fees in an increasingly crowded and price-sensitive market. There is no assurance that we will be able to continue to do so, that we will be able to retain our current users or attract new users, or keep our users engaged. Any number of factors can negatively affect user retention, growth, and engagement, including if:

· we fail to increase awareness of our brand and successfully compete with the offerings and prices other companies, or if our users otherwise increasingly engage with competing products and services, including those that we are unable to offer due to regulatory reasons;

· we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received;

· we fail to successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our business;

· we fail to support new and in-demand cryptocurrencies or if we elect to support cryptocurrencies with negative reputations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· there are changes in sentiment about the quality or usefulness of our products and services or concerns related to privacy, security, or other factors including, without limitation, changes in macro-level user preference for using cash to purchase Bitcoin;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· there are adverse changes in our products and services that are mandated by legislation, regulatory authorities, or litigation;

· we fail to maintain existing authorizations as well as obtain newly required authorizations, registrations and licenses for our products;

· users perceiving Bitcoin and other cryptocurrencies to be a bad investment, or experiencing significant losses in Bitcoin or other cryptocurrencies, may not desire to utilize our products and services;

· technical or other problems prevent us from delivering our products and services with the speed, functionality, security and reliability that our users expect, or if we fail to otherwise gain and maintain the trust and confidence of our users;

· there are cybersecurity incidents, employee or service provider misconduct or other unforeseen activities that cause losses to us or our users;

· there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell bitcoin to users or the separate flat transaction fee that we are able to charge our users, or modifications by competitors to their fee models;

· we fail to provide adequate customer service for our users and retail partners;

· regulatory and governmental bodies in countries that we target for expansion express negative views towards cryptocurrency-related services and, more broadly, the digital financial system; or

· we or other companies in our industry are the subject of adverse media reports or other negative publicity.

From time to time, certain of these factors have negatively affected user retention, growth, and engagement to varying degrees. If we are unable to maintain or increase our user base and user engagement, our revenue and financial results may be adversely affected. Any decrease in user retention, growth, or engagement could render our products and services less attractive to users, which may have an adverse impact on our revenue, business, operating results, and financial condition. If our user growth rate slows or declines, we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive growth of revenue.

**Adverse economic conditions may affect our business.**

Our performance is subject to general economic conditions, and their impact on the digital currency markets and our customers. The United States and other international economies have experienced cyclical downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. The impact of general economic conditions on the Company is highly uncertain and dependent on a variety of factors, including global adoption of cryptocurrencies, central bank monetary policies, and other events beyond our control. Geopolitical developments, such as trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility of global financial and digital currency markets. To the extent that conditions in the general economic and digital currency markets materially deteriorate, our ability to attract and retain customers may suffer.

**Due to unfamiliarity and some negative publicity associated with cryptocurrency-related businesses, existing and potential users may lose confidence in cryptocurrency-related products and services, which could negatively affect our business.**

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Cryptocurrency and related products and services are relatively new. Many of our competitors are unlicensed, unregulated, operate without supervision by any governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. As a result, users and the general public may lose confidence in cryptocurrency businesses, including regulated businesses like ours.

Since the inception of the digital financial system, numerous cryptocurrency businesses have been sued, investigated, or shut down due to fraud, manipulative practices, business failure, and security breaches. In many of these instances, customers of these businesses were not compensated or made whole for their losses. Larger businesses, like us, are more appealing targets for hackers and malware and may also be more likely to be targets of regulatory enforcement actions. For example, in May 2019, Binance, one of the world's largest platforms, was hacked, resulting in losses of approximately $40 million, and in February 2021, Bitfinex settled a long-running legal dispute with the State of New York related to Bitfinex's alleged misuse of over $800 million of customer assets. Further, in the first half of 2022, major cryptocurrency lending platforms declared bankruptcy, resulting in a loss of confidence in participants of the digital financial system and negative publicity surrounding cryptocurrency more broadly.

**<u>Risk Factors Related to Our Operations in El Salvador</u>**

**Expansion of business operations in El Salvador may not produce the positive results as planned.**

We have established significant operations in El Salvador. However, there are many factors that could disrupt the implementation of Bitcoin Law in El Salvador, and as a result, our operations in El Salvador. Any of such disruptions can have a negative impact on the financial position of the Company. They could jeopardize our expansion plan and be detrimental to our business. Six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. Under the new rules, Bitcoin is no longer considered "currency," or "legal tender." Another change makes using Bitcoin entirely voluntary. Previously, the law mandated that businesses accept Bitcoin for any goods or services they provided. Additionally, Bitcoin can no longer be used to pay taxes or settle government debts. These changes are not expected to harm our operations because our Bitcoin ATM services in El Salvador do not depend on compulsory Bitcoin usage; rather, they cater to organic consumer demand. We believe demand for Bitcoin transactions will continue to be driven by individuals who choose to use Bitcoin. Our role as an ATM operator for Chivo remains unchanged whereby we continue to manage the Bitcoin ATMs on the government's behalf under our fixed-fee service arrangement.

The government is also stepping back from its involvement in Chivo Wallet, the state-backed digital wallet, by either transferring it to private sector management or terminating the program, as part of the country's agreement with the International Monetary Fund. We believe this development may open opportunities for private companies (including the Company) to fill any service gaps left by the government's reduced role. We have assessed the impact of the legislative changes and the Chivo transition and do not foresee a negative impact on our business, in part because our existing ATM operations and customer base in El Salvador are expected to continue without disruption. There is no assurance that our assessment may not change depending on any future legal, political or economic changes in El Salvador.

Our operations in El Salvador are subject to the following additional risks:

· **Exposure to Bitcoin volatility**. While Bitcoin can be used as a speculative asset to generate significant gains, it can also generate major losses. Bitcoin pricing has fluctuated from $16,500 on December 31, 2022 to $42,000 on December 31, 2023 to $93,429 on December 31, 2024 to $114,056 on September 30, 2025. Holding or transacting in such an unstable asset is particularly risky for people with low incomes, who can ill afford to sustain price swings as large as 30% in a single day and may become victims of a significant collapse. If there was a significant reduction in the fair value of Bitcoin, the reduction of value of Bitcoin held in the El Salvadoran national reserves could be a destabilizing event for the country and could impact the existing Bitcoin Law. Six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. Under the new rules, Bitcoin is no longer considered "currency," or "legal tender." Another change makes using Bitcoin entirely voluntary. Previously, the law mandated that businesses accept Bitcoin for any goods or services they provided. Additionally, Bitcoin can no longer be used to pay taxes or settle government debts. These changes are not expected to harm our operations because our Bitcoin ATM services in El Salvador do not depend on compulsory Bitcoin usage; rather, they cater to organic consumer demand. We believe demand for Bitcoin transactions will continue to be driven by individuals who choose to use Bitcoin. Our role as an ATM operator for Chivo remains unchanged whereby we continue to manage the Bitcoin ATMs on the government's behalf under our fixed-fee service arrangement.

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| | |
|:---|:---|
|  | The government is also stepping back from its involvement in Chivo Wallet, the state-backed digital wallet, by either transferring it to private sector management or terminating the program, as part of the country's agreement with the International Monetary Fund. We believe this development may open opportunities for private companies (including the Company) to fill any service gaps left by the government's reduced role. We have assessed the impact of the legislative changes and the Chivo transition and do not foresee a negative impact on our business, in part because our existing ATM operations and customer base in El Salvador are expected to continue without disruption.<br>There is no assurance that our assessment may not change depending on any future legal, political or economic changes in El Salvador. |
| · | **Depletion of banking assets.** In today's El Salvador, banks connect savers and borrowers. If most Salvadorans start using Bitcoin, their savings will be stored in digital wallets away from potential borrowers who would otherwise use it to fund projects. Massive adoption of Bitcoin could drain banks of savings and raise the cost of borrowing for companies and individuals, who would face higher interest rates. If that occurs, the economy of El Salvador and implementation of the Bitcoin Law could be negatively affected. |

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· **Lack of transparency/money laundering.** Internationally, the cryptocurrency has been used for money laundering and to facilitate illegal activities. The intergovernmental Financial Action Task Force ("FATF") may increase monitoring of El Salvadoran banks, businesses, and other financial institutions. The FATF is the international "money laundering and terrorist financing watchdog." It reviews countries' anti-money laundering and counter-financing terrorism practices. If the FATF determines that a country is exposed to financial crime, the flagged country is placed on either the list of "Jurisdictions under Increased Monitoring," known as the "grey list," or the list of "Jurisdictions subject to a Call for Action," known as the "black list." When a country is placed on the grey list, it must cooperate with increased FATF monitoring. When a country is placed on the black list, the FATF urges its 39 member nations and over 200 affiliated nations to apply enhanced due diligence and impose countermeasures, such as sanctions. From an FATF regulatory perspective, El Salvador has been in full compliance, however, that may likely change after the Bitcoin Law has been fully implemented. For example, the FATF mandates that the parties engaging in virtual-asset transactions provide complete and sufficient know-your-customer information. It also requires that senders and recipients of virtual assets obtain accurate knowledge and information about "the transaction, the source of funds, and the relationship with the counterparty." The chances of Bitcoin transactions meeting such requirements are unlikely and El Salvador may be subject to sanctions. Please note that six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company's operations.

· **Loss of central bank reserves.** El Salvador currently carries a large debt burden (approximately 87.9% of GDP as of April 2025 according to the International Monetary Fund ("IMF")) and has a challenging amortization schedule. To navigate this difficult fiscal environment during the pandemic, El Salvador reached out to the International Monetary Fund ("IMF") and was approved for a 40-month arrangement under the Extended Fund Facility for El Salvador, with access to $1.4 billion and an immediate disbursement of $113 million. The IMF stipulated that the arrangement is expected to catalyze additional multilateral financial support, for a combined overall financing package of over US$3.5 billion over the program period. The IMF also declared that "the potential risks of the Bitcoin project are being addressed in line with Fund policies and with Fund advice to the authorities. Prior actions include legal reforms that have made acceptance of Bitcoin by the private sector voluntary and ensured that tax payments are made only in U.S. dollars. Transparency of the public crypto e-wallet has been strengthened, and the government plans to gradually unwind its participation in the e-wallet. Going forward, program commitments will confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin. Regulation and supervision of digital assets will be enhanced in line with evolving international best practices". Those factors may negatively affect the economy of El Salvador and disrupt the implementation of the Bitcoin Law. However, six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the modified Bitcoin Law and their impact on the Company's operations.

· **Continued negative publicity in the media with respect to Chivo S.A. de C.V. the Chivo Ecosystem, of Bitcoin ATMs in general, or of the Company's services could have a material adverse effect on our business.** The Government of El Salvador, through Chivo operates the Chivo digital wallet. The government purchased software and related services from the Company and used this software from the launch of the Chivo digital wallet in September of 2021 until December of 2021. According to media reports, the Chivo company's operation of the Chivo digital wallet is not subject to public reporting or auditing by a banking regulator. Therefore, there is no way for an outside observer to know that the assets held by Chivo S.A. de C.V. are sufficient to cover the liabilities (user balances) of the Chivo digital wallet. If there are negative views presented in the news about the assets held by Chivo S.A. de C.V, or of the quality of its service offerings, or its lack of transparency, or fraud, or identity theft connected with the usage of the Chivo digital wallet, or any reported problems related to the Chivo digital wallet (either the version written by the Company or any subsequent version not using the Company's Intellectual Property), then the Company's reputation could be damaged which may negatively affect an investment in our common stock.

· **Failure to maintain sufficient cash in Chivo branded ATMs to meet demand could have a material adverse effect on our reputation.** Chivo S.A. de C.V. also directs the Company as to how much physical cash should be loaded into the Chivo ATMs in El Salvador for the purpose of ATM users retrieving U.S. Dollar currency in exchange for their Bitcoin or dollars held in the Chivo digital wallet. If for any reason, there is not sufficient physical cash loaded into a Chivo ATM to meet the total demand for such cash, the ATM will be unable to initiate additional transactions to dispense cash to a user and the user will see the machine as non-functional. This could create negative impression of the Chivo Ecosystem, of Bitcoin ATMs in general, of the Company's services, or the Company's reputation and negatively affect an investment in our common stock.

· **Capital flight.** Bitcoin Law could facilitate a capital flight, especially during a crisis. Many emerging markets control the flow of capital in and out of their countries to avoid a macroeconomic crisis or to prevent one from worsening. However, Bitcoin can facilitate such a flight: Once dollars are converted to Bitcoin, they can easily be sent to anyone in the world, without any control or tracking. Such an event would have a negative effect on the economy of El Salvador. Six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company's operations.

· **Environmental concerns about Bitcoin mining.** The system on which Bitcoin is currently based consumes large amounts of electricity, making it particularly taxing for the environment. President Bukele believes that the country's cheap, clean, and renewable geothermal energy from volcanoes can power Bitcoin mining rigs, thus reducing its carbon footprint. It is not clear at this time if such a solution would solve the environmental concerns.

**Risks related to the custody of the private keys associated with the Chivo wallet system, including any risk of loss or compromise of such private keys.**

The Government of El Salvador (or its designated Chivo wallet operator) retains custody of the private keys associated with the Chivo wallet system. The Company's role is strictly limited to operating the ATM infrastructure and facilitating the transfer of cash from the ATMs to the banks that Chivo transacts with. We do not have custody or manage Bitcoin on behalf of Chivo or its end users. Furthermore, the Company does not have access to end users of the Chivo system. The end users who participate in the Chivo wallet system, also do not have access to the private keys to the Chivo wallet. When the end user chooses to receive Bitcoins in the Chivo wallet, the end user agrees that the Government of El Salvador (or its designated Chivo wallet operator) retains custody of the private keys associated with the wallet. Since the Company is neither the custodian of the private keys nor is the Company involved in the transactions between the end users and Chivo, any compromise or loss of these private keys could adversely affect public confidence in the Chivo wallet system, negatively affecting its reputation or brand, and consequently potentially reducing the number of transactions conducted through Chivo-branded ATMs resulting in lowering associated management fees earned by the Company. However, based on the Company's assessment, such loss or compromise of private keys associated with Chivo wallet system, would likely have only limited potential impact on the Company's overall business because revenues from Chivo represent an insignificant fraction of the Company's total operations and revenues. No assurance can be made that the impact of any reputational risk will not be of a significant nature in the future.

The Company entered into certain agreements with the government of El Salvador, for the operation and management of the Chivo branded ATMs, however such contracts do not obligate the Company to assume the risk of loss or compromise of private keys associated with Chivo wallet system.

**Political and economic developments in El Salvador may adversely affect Bitcoin Law.**

El Salvador's Bitcoin Law has been greeted with skepticism from both Salvadorans and international financial institutions. The population might not fully embrace Bitcoin. Requiring every business to accept Bitcoin for goods and services without adequate access to technology may be a difficult obstacle to overcome and Bitcoin Law can be changed if it remains unpopular under a successor administration. Any of these concerns could disrupt our operations in El Salvador and have a negative impact on the financial position of the Company. It should be noted that six articles of the El Salvadorian Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company's operations.

There is political discontent in El Salvador with President Bukele's ouster of Supreme Court judges and the potential for the president to seek a second consecutive term. The presidential period is five years in El Salvador. Consecutive re-election is not permitted, though previously elected presidents may run for a second, non-consecutive term. Recently, El Salvador's top court and its election authority have removed what seemed to be a constitutional ban on consecutive presidential reelection, which resulted in President Nayib Bukele seeking a second term in 2024. President Bukele won his second term in February 2024 with the vote of 85%, however, if there is a change in El Salvador's administration after his five-year term expires, it may negatively affect Bitcoin Law and our operations in El Salvador.

**Our contracts with the El Salvador government may be negatively impacted**

We have entered into agreements with the Government of El Salvador, pursuant to which we have installed and are currently operating 198 Chivo Bitcoin ATMs in El Salvador, 13 Chivo Bitcoin ATMs at El Salvador consulates in the U.S., 31 Chivo Bitcoin ATMs in other U.S. locations, with 2 ATMs in storage (as of September 30, 2025), importing and delivering 950 Chivo POS terminals for local businesses in El Salvador to transact with bitcoin, and developing and maintaining the software for the Chivo digital wallet. Each obligation comes with its own set of operational risks in addition to risks set forth herein, including but not limited to the volatile nature of crypto assets, data breach and crypto hacks, fraud conducted by users of the services offered by the Government of El Salvador, changes in U.S. and foreign laws and regulations, talent acquisition and retention, and general economic conditions. If we fail to fulfil our contractual obligations, our agreements may be terminated which may negatively impact our financial standing and reputation. For the three and nine months ended September 30, 2025, approximately 1.3% and 1.0%, respectively, of our revenues have been from the El Salvador government through our white-label service. In December 2024, the Company entered into a new Master Services Agreement ("MSA") and Service Level Agreement ("SLA") with the Government of El Salvador, which expires in December 2027. In conjunction with the new MSA and SLA, the Company and CHIVO completed a financial settlement agreement to finalize balances owed between the parties and terminate the original MSA, Contracts and Addendums between the Company and the Department of Treasury of El Salvador. The settlement was effective as of April 2023 with full satisfaction of all obligations thereunder. Our agreements with the Government of El Salvador may also be modified or terminated by the Government of El Salvador for any reason including but not limited to regime change, additional competition, and loss of political support. Any such unfavorable change in our business operations in El Salvador, including the termination of any contracts with the Government of El Salvador, would adversely affect our revenues and profitability, and could negatively affect an investment in our shares of common stock. No white-label ATMs have been terminated by the El Salvador government through September 30, 2025. Please note that six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company's operations.

**<u>Risk Factors Related to the Bitcoin Network, Wallets, Bitcoin, and Crypto Assets</u>**

**Bitcoin, and most other crypto assets based on public key cryptography, are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet in which the bitcoin are held.**

While the Bitcoin Network, and similar blockchain protocol networks, require a public key relating to a digital wallet to be published when used in a spending transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the Bitcoin held in such wallet. To the extent a private key is lost, destroyed, or otherwise compromised and no backup of the private key is accessible, Athena will be unable to access the Bitcoin, or other crypto assets, held in the related digital wallet. Any loss of private keys relating to digital wallets used to store Athena's Bitcoin, or other crypto assets, could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock. Our hot wallets are maintained by BitGo, a regulated third-party custodian, and not by Company personnel. The Company has engaged BitGo (a qualified custodian) to secure our digital assets. BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions. By entrusting this function to BitGo, we add a layer of security and risk mitigation (given BitGo's expertise and insurance arrangements) beyond what could be achieved with in-house custody.

**The future and development of the Bitcoin Protocol and other blockchain technologies are subject to a variety of factors that are difficult to evaluate.**

The further development and acceptance of the Bitcoin Network and other cryptographic and algorithmic protocols governing the issuance of transactions in Bitcoin and other crypto asset, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. Athena does not participate in the development of the Bitcoin Network and has little to no influence over the software developers who write the code or the miners who run the Bitcoin Network. The slowing or stopping of the development or acceptance of the Bitcoin Network could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock.

**The further development and acceptance of cryptocurrency networks and other cryptocurrencies, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to predict and evaluate. The slowing or stopping of the development or acceptance of digital asset systems may adversely affect an investment in us**.

 

Cryptocurrency that may be used to buy and sell goods and services, among other things, are a new and rapidly evolving industry which is subject to a high degree of uncertainty. The factors affecting the further development of the digital asset industry, as well as the digital asset networks, include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· continued worldwide growth in the adoption and use of cryptocurrencies;

· governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the digital asset network or similar cryptocurrency systems;

· the maintenance and development of the open-source software protocol of cryptocurrency networks;

· changes in consumer demographics and public tastes and preferences;

· the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;

· general economic conditions and the regulatory environment relating to cryptocurrency; and

· the impact of regulators focusing on cryptocurrencies and digital securities and the costs associated with such regulatory oversight. A decline in the popularity or acceptance of the digital asset networks could adversely affect an investment in us.

We are, or may in the future, be susceptible to risks arising from disruptions in crypto asset markets. Such risks could potentially result in, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the depreciation of investments held in us, including the depreciation in the price of our publicly-traded stock;

· decreased user demand for our products and services;

· financing risks to us, including relating to our ability to obtain equity and debt financing;

· increased losses or impairments of the crypto assets held by us;

· legal proceedings and government investigations involving us or our affiliates or other third-parties with which we do business; or

· indirect risks to our business due to any adverse impact of recent or future crypto market disruptions on our users, suppliers or other counterparties.

Additionally, although we are not directly connected to recent crypto market events, we may still suffer reputational harm due to our association with the cryptocurrency industry in light of the recent disruption in, or as a result of any future disruptions in, the crypto asset markets. Specifically, recent negative publicity stemming from these market disruptions and speculation of potential future disruptions increases our risk of reputational harm simply by association with the industry.

Further, any future market disruptions resulting in overall decreased interest in Bitcoin could harm our business. The prevalence of cryptocurrency is a relatively recent trend, and the long-term adoption of cryptocurrency by investors, consumers, and businesses remains uncertain.

The number of user transactions and our transaction volumes is partially dependent on the price of bitcoin, as well as the associated demand for buying, selling, and trading bitcoin, which can be, and historically have been, volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease. As such, any such declines, or any declines in the price of bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us due to an associated decrease in demand for our products and services. The price and trading volume of any cryptocurrency, including bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, as discussed elsewhere in this section under the subheading "*Our transaction volume may be partially dependent on the prices of bitcoin we sell, which can be volatile. If such prices decline, the volume of user transactions could decrease and our business, operating results, and financial condition would be adversely affected*."

**Stable Coins may not have any intrinsic value.**

Tether, USD Coin, Dai and TrueUSD are examples of stable coins. Stable coins are crypto assets designed to have a stable value over time as compared to typically volatile crypto assets and are typically marketed as being pegged to a Fiat Currency, most commonly the U.S. Dollar, at a rate of 1:1. Stable coins make up an estimated 7.7% of the total market cap of crypto assets as of October 30, 2025 (according to Forbes.com). The largest stable coin is Tether, which is the third largest crypto asset by market cap at $183 billion per Forbes.com as of October 30, 2025. Some have argued that some stable coins, particularly Tether, are improperly issued without sufficient backing, and have also argued that those associated with certain stable coins may be involved in laundering money. On February 17, 2021, the New York Attorney General entered into an agreement with Tether's operators, requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. Terra (LUNA), another stable coin, collapsed in May 2022 due to issues with its algorithm, resulting in the stable coin losing all value. This sent shockwaves through the crypto market, with the total market cap of crypto assets decreasing significantly during May 2022. Volatility in stable coins, operational issues with stable coins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stable coins, or regulatory concerns about stable coin issuers or intermediaries, such as crypto asset spot markets, that support stable coins, could have a significant impact on the global crypto market.

**A temporary or permanent blockchain "fork" to any supported crypto asset could adversely affect our business.**

Blockchain protocols, including Bitcoin, Ethereum, and Litecoin, are open source. Any user can download the software, modify it, and then propose that Bitcoin, Ethereum, Litecoin, or other blockchain protocols users and miners adopt the modification. When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin, Ethereum, Litecoin, or other blockchain protocol networks, as applicable, remain uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a "fork" (i.e., "split") of the impacted blockchain protocol network and respective blockchain, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two parallel versions of the Bitcoin, Ethereum, Litecoin, or other blockchain protocol network, as applicable, running simultaneously, but with each split network's crypto asset lacking interchangeability.

Both Bitcoin and Ethereum protocols have been subject to "forks" that resulted in the creation of new networks, including Bitcoin Cash ABC, Bitcoin Cash SV, Bitcoin Diamond, Bitcoin Gold, Ethereum Classic, and others. Some of these forks have caused fragmentation among platforms as to the correct naming convention for forked crypto assets. Due to the lack of a central registry or rulemaking body, no single entity can dictate the nomenclature of forked crypto assets, causing disagreements and a lack of uniformity among platforms on the nomenclature of forked crypto assets, and which results in further confusion to customers as to the nature of assets they hold on platforms. In addition, several of these forks were contentious and as a result, participants in certain communities may harbor ill will towards other communities. As a result, certain community members may take actions that adversely impact the use, adoption, and price of Bitcoin, Ethereum, Litecoin, or any of their forked alternatives.

Furthermore, hard forks can lead to new security concerns. For instance, when the Ethereum and Ethereum Classic networks split in July 2016, replay attacks, in which transactions from one network were rebroadcast on the other network to achieve "double-spending", plagued platforms that traded Ethereum through at least October 2016, resulting in significant losses to some crypto asset platforms. Similar replay attacks occurred in connection with the Bitcoin Cash and Bitcoin Cash SV network split in November 2018. Another result of a hard fork is an inherent decrease in the level of security due to the splitting of some mining power across networks, making it easier for a malicious actor to exceed 50% of the mining power of that network, thereby making crypto assets that rely on proof-of-work more susceptible to attack, as has occurred with Ethereum Classic.

Future forks may occur at any time. A fork can lead to a disruption of networks and our information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to temporary or even permanent loss of our assets.

**From time to time, we may encounter technical issues in connection with the integration of supported crypto assets and changes and upgrades to their underlying networks, which could adversely affect our business.**

To support any crypto asset, a variety of front and back-end technical and development work is required to ensure proper operations including pricing, transfer, accounting, and other solutions for our Bitcoin ATM fleet, and to integrate such supported crypto asset with our existing infrastructure. For certain crypto assets, a significant amount of development work is required and there is no guarantee that we will be able to integrate successfully with any existing or future crypto asset. In addition, such integration may introduce software errors or weaknesses into our platform, including our existing infrastructure. Even if such integration is initially successful, any number of technical changes, software upgrades, soft or hard forks, cybersecurity incidents, or other changes to the underlying blockchain network may occur from time to time, causing incompatibility, technical issues, disruptions, or security weaknesses to our platform. If we are unable to identify, troubleshoot and resolve any such issues successfully, we may no longer be able to support such crypto assets, our assets may be frozen or lost, the security of our crypto asset wallets may be compromised, and technical infrastructure may be affected, all of which could adversely impact our business.

**If miners or validators of any crypto asset network demand high transaction fees, our operating results may be adversely affected.**

We pay miner fees when transmitting crypto assets including bitcoin to customers upon completion of their purchase. In addition, we also pay miner fees when we move crypto assets for various operational purposes, such as when we transfer bitcoin between our regional wallets. However, miner fees can be unpredictable. For instance, in 2017, Bitcoin miner fees increased from approximately $0.35 per transaction in January 2017 to over $50 per transaction in December 2017. Even though Bitcoin's miner fees have since decreased to an average of $0.6659 per transaction on September 30, 2025, if the demand for Bitcoin remains at current levels, we could experience high costs in excess of our historical performance. Although we attempt to adjust our pricing to pass through these expenses to our customers, we have in the past incurred, and expect to incur from time to time, losses associated with the payment of miner fees in excess of what we charge our customers, resulting in adverse impacts on our operating results.

**We are subject to an extensive and rapidly evolving regulatory environment, and if a particular crypto asset we transact or transacted in is characterized as a "security", we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.**

Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, and legal and regulatory interpretations and guidance in the markets in which we operate. The scope of laws, rules, and regulations that can impact our business is expansive and includes certain of the requirements that apply to financial services, money transmission, privacy protection, cybersecurity, electronic payments, securities and commodities regulation, data governance, data protection, fraud detection, marketing (including the Telephone Consumer Protection Act of 1991), civil rights (including the Americans with Disabilities Act, which generally requires, among other things, that our Athena Bitcoin ATMs be accessible to individuals with disabilities, such as visually- impaired persons), competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing as well as bespoke cryptocurrency, and related cryptocurrency laws that have been adopted in some jurisdictions that can impact cryptocurrency custody, cryptocurrency exchange and transfer, as well as cross-border and domestic cryptocurrency transmission.

We evaluate all products and services prior to launch under U.S. federal and applicable international securities laws. As part of determining whether a particular crypto asset is a security for purposes of the federal securities laws, we have taken into account a number of factors, including the various definitions of "security" under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court's decisions in the *Howey* and *Reves* cases, as well as reports, orders, press releases, public statements and speeches by the SEC and its staff providing guidance on when a digital asset may be a security for purposes of the federal securities laws. Depending on its characteristics, a digital asset may be considered a "security" under the federal securities laws. The test for determining whether a particular digital asset is a "security" is complex and difficult to apply, and the outcome is difficult to predict. Whether a digital asset is a security under the federal securities laws depends on whether it is included in the lists of instruments making up the definition of "security" in the Securities Act, the Exchange Act and the Investment Company Act. Digital assets as such do not appear in any of these lists, although each list includes the terms "investment contract" and "note," and the SEC has typically analyzed whether a particular digital asset is a security by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as the *Howey* and *Reves* tests, respectively. For many digital assets, whether or not the *Howey* or *Reves* tests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular digital asset qualifying as a security under one or both of the *Howey* and *Reves* tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular digital asset can change over time as the relevant facts evolve. The laws, rules, and regulations thereunder may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptoeconomy requires us to exercise our judgment as to whether these crypto assets meet the definition of a security. Our conclusions based on our legal analysis of the criteria discussed herein, do not constitute a legal determination and are not binding on regulators or the courts. It is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on or temporary or permanent suspensions of our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.

The SEC and its staff have taken the position that certain crypto assets fall within the definition of a "security" under the U.S. federal securities laws. The SEC's Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given crypto asset is a security in April 2019. The legal test for determining whether any given crypto asset is a security is a highly complex, fact-driven analysis that evolves over time. We have established policies and practices to evaluate each crypto asset that we sell to customers, as discussed above, including applying the *Howey* and *Reves* tests, as may be applicable, to each crypto asset that we sell to customers. The *Howey* test is a legal framework outlined by the U.S. Supreme Court to determine whether a transaction qualifies as an investment contract (security) and would be subject to U.S. securities laws. This test requires the following four criteria to be met: investment of money, expectations of profits, common enterprise and reliance on the efforts of others. The crypto assets that the Company sells to customers do not meet all four of these definitions. The Company does not believe that Bitcoin and Bitcoin Cash meet the criterion of satisfying the definition of a common enterprise; as investors are not pooling their funds, there is no promoter or issuer and they have never sought public funds to help develop its technology. Further, an investor's success is not reliant on the efforts of others. The Company evaluated Ethereum, including the assessment of the impacts of the change from proof-of-work to proof-of-stake and concludes that Ethereum does not meet the definition of a security as it does not satisfy the common enterprise criterion or the reliance of others criterion. We believe that the Ethereum network remains decentralized and that there is no horizontal or vertical commonality between validators. Horizonal and vertical commonality requires the entrepreneurial efforts of a promoter, which the Company believes that Ethereum does not have. Profits (rewards) are determined primarily based on each validator's individual effort and they do not expect rewards from the efforts of other validators. The Company further notes that the Company has not provided staking abilities and benefits to customers for Ethereum, resulting in no change in the Company's conclusion that Ethereum does not meet the *Howey* test.

We have considered and determined that the recent completion of Ethereum's transition to Proof-of-Stake consensus, known as "the Merge", has not caused Ethereum to have become a security for a variety of reasons including, but not limited to those discussed below. Consistent with the holdings in recent federal court cases involving *Ripple* and *Terraform*, we believe that whether something is an investment contract under the *Howey* test is a transaction-specific assessment that does not attach to the underlying object of that transaction as the underlying object of a transaction is not itself "a contract, transaction or scheme." We therefore believe that a digital asset such as Ethereum cannot itself be an investment contract security, including after the Merge. We also believe that Ethereum is a consumable commodity that is not a security. Ethereum was used in making gas fee payments on the Ethereum Network prior to the Merge and continues to be extensively used in this capacity after the Merge. The Merge also introduced a new use for Ethereum as part of the new consensus mechanism, which provides further evidence that Ethereum is a consumable commodity and not a security. We further believe that any expectations of profit a purchaser of Ethereum may possess from their purchase depends on the overall market for Ethereum, not any identifiable "other" or issuer as required in the *Howey* test. Specifically, we believe that Ethereum's value derives from the supply and demand for useful applications built on the Ethereum Network. We believe this to be the case before the Merge and continues to be the case after the Merge. We also believe that even if a holder of Ethereum expects profits based upon the action of persons directly involved in updating the Ethereum Network's code, or in publishing new blocks of transactions on the Ethereum Network, the group of persons involved in such activities is sufficiently decentralized such that there is no "other" upon whom a purchaser could rely for *Howey* purposes. There were thousands of developers working on the Ethereum Network's code before the Merge, and there continue to be today, and the same can be said of thousands of miners publishing blocks on the Ethereum Network. We therefore believe that the Ethereum Network remains "sufficiently decentralized" and that Ethereum is not a security. We have also considered that, similar to profits that could be sought from mining under proof of work, any profits realized from validating Ethereum transactions only accrue to those who affirmatively engage in validation efforts, rather than holders of Ethereum more generally. Any of these profits are also based on the validator's own efforts to engage in validation, and not the efforts of identifiable "others" more generally. We believe Ethereum is not a security because futures contracts with Ethereum as the underlying asset continue to be offered by trading platforms regulated only by the Commodity Futures Trading Commission ("CFTC"), even after the Merge. In addition, we have considered generally whether the Merge may have caused Ethereum to be classified as a security under *Reves* or any other instrument making up the definition of "security" in the Securities Act, the Exchange Act and the Investment Company Act, and concluded that it did not.

We believe that we have applied the proper legal standards in determining that Ethereum is not a security in light of the uncertainties inherent in the *Howey* and *Reves* tests. In light of these uncertainties and the fact-based nature of the analysis, we acknowledge that Ethereum may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to be a security under the federal securities laws notwithstanding our prior conclusion; and our prior conclusion, even if reasonable under the circumstances, would not constitute a legal determination binding on regulators or the courts and would not preclude legal or regulatory action based on the presence of a security.

The Company does not believe that Tether or Litecoin meet the criterion of expectation of profit and therefore they are not securities. While Tether is a stable coin that is pegged to the U.S. Dollar, Litecoin is not a stable coin, and it is valued based on market value.

We currently offer only Bitcoin for sale at all our ATM machines. We also operate Athena Plus for private clients and trade customers of the Company. We buy and sell Bitcoin through our Athena Plus services, but we have also facilitated transactions in other crypto assets prior to July 19, 2023. For the three and nine months ended September 30, 2025, we had 35 and 64 Athena Plus transactions for Bitcoin, respectively. For the year ended December 31, 2024 we had 83 Athena Plus transactions for Bitcoin. Since July 19, 2023, we do not transact, or make offers to transact with our customers, in any crypto assets except Bitcoin and Tether. We may offer additional cryptocurrencies in the future only if there were significant customer demand for a specific crypto asset and that crypto asset was available to us through multiple trading partners, crypto exchanges and crypto asset brokers.

We believe that we have applied the proper legal standards in determining that the crypto assets we sell to customers are not a "security" in light of the uncertainties inherent in the *Howey* and *Reves* tests. In light of these uncertainties and the fact-based nature of the analysis, we acknowledge that a crypto asset we sell to customers may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to be a security under the federal securities laws notwithstanding our prior conclusion based on our analysis; and our prior conclusion, even if reasonable under the circumstances, would not constitute a legal determination binding on regulators or the courts, and would not preclude legal or regulatory action based on the presence of a security.

The classification of a crypto asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, and clearing of such assets. For example, a crypto asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in crypto assets that are securities in the United States may be subject to registration with the SEC as a "broker" or "dealer." Platforms that bring together purchasers and sellers to trade crypto assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system, or ATS, in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. If Bitcoin, Ether, Litecoin, and BCH or any other crypto asset we transacted in the past as listed above, is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such supported crypto asset (if it is still being used in our transactions) or for our Company if it is determined that certain securities laws were violated and we may be subject to regulatory scrutiny, investigation and penalties. Moreover, the networks on which such supported crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto asset to be traded, cleared, and custodied as compared to other crypto assets that are not considered to be securities. Additionally, new laws, regulations, or interpretations may result in litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying us from offering certain products or services, or could impact how we offer such products and services. Foreign jurisdictions may have similar regulations and licensing, registration, and qualification requirements.

**Any failure to obtain or maintain necessary money transmission and virtual currency business activity registrations and licenses could adversely affect our operations.**

In the United States, we have obtained licenses to operate as a money transmitter, or the equivalent, in the states where we understand such licenses or equivalent are required to conduct our business. We also currently operate in states where we do not believe we are required, or have been informed by the relevant jurisdiction that we are not required, to obtain money transmitter licenses or any other required licenses. This belief is based on our analysis of the applicable laws and regulations and/or our communications with the regulators in the relevant jurisdiction. We plan to apply for money transmitter or virtual currency licenses or their equivalents in additional jurisdictions as needed. As we obtain additional licenses, we may be required to bear substantial costs to comply with the requirements of the additional states or jurisdictions. If our licenses are not renewed, we are denied licenses in additional states or jurisdictions where we choose to apply for a license, or jurisdictions that have previously not required a license require a license in the future, we could be forced to seek a license or change our business practices.

Additionally, from time to time, we are the subject of allegations from various U.S. states that our activities constitute those of a money transmitter, and allegations that we failed to register as a money transmitter in those states. To date we have agreed to various consent orders and settlements with such states, none of which represent material amounts of penalties, assessments or fees, to settle such claims. The outcome of such ongoing and future allegations, complaints, claims and litigation cannot be predicted.

As a money services business and a money transmitter, we are subject to a range of legal obligations and requirements including bonding, net worth maintenance, user notice and disclosure, reporting, recordkeeping and cybersecurity requirements, and obligations that apply to the safeguarding of third-party funds and crypto assets. In addition, the licensed entity within our corporate structure is subject to inspection and examination by the state licensing agencies and certain actions involving that entity, such as changes in controlling equity holders, board members, and senior management, may require regulatory approval. Further, similar to as discussed above, if we were found by these regulators to be in violation of any applicable laws, rules, or regulations, we could be subject to fines, penalties, lawsuits, and enforcement actions, additional compliance requirements, increased regulatory scrutiny of our business, restriction of our operations, or damage to our reputation or brand. Regulatory requirements are constantly evolving, and we cannot predict whether we will be able to meet changes to existing regulations or the introduction of new regulations without such compliance harming our business, financial condition, and operating results.

Certain jurisdictions have enacted rules that require money transmitters, money services businesses, or virtual currency businesses to establish and maintain transaction monitoring, filtering, scanning and cybersecurity. programs. Wherever we are subject to these rules, we are required to adopt business practices that require additional expenditures and impact our operating results.

Additionally, if federal, state, or international regulators were to take actions that limit or prohibit us or our business partners from continuing to operate our business or their businesses as currently operated, whether by imposing additional requirements, compliance obligations or sanctions, such actions could harm our business. Any change to our business practices that makes our service less attractive to users or prohibits use of our services by residents of a particular jurisdiction could decrease our transaction volume and harm our business.

**<u>Risk Factors Related to Current and Future Regulations and Other Law Enforcement Actions</u>**

**The regulations that govern our primary business operations are in flux and could change in unpredictable ways that negatively affect our business operations, demand for our services, or our financial position.**

Current regulations acknowledge and allow for companies to sell bitcoin and other crypto assets in the United States and other countries where Athena operates. If regulations change to disallow the sale of bitcoin or other crypto assets such a change could have a negative impact on revenues and adversely affect an investment in our common stock. Current regulations require Know Your Customer ("KYC") information be collected as part of a Customer Information Program ("CIP").

The Company currently has an Anti-Money-Laundering ("AML") / Bank Secrecy Act ("BSA") policy and Procedures Manual to comply with FinCEN regulatory requirements regarding CIP and KYC. Athena employs a risk-based approach and a tiered system using a number of systems and AML analysts as well as various compliance triggers associated with its software. For transactions up to $2,000 per day, in the states and territories of the United States which do not currently restrict daily transaction limits (Tier 1) customers insert a phone number and Athena utilizes an onboarding tool which provides a name and address associated with the phone number provided. If a customer wishes to purchase greater than $2,000 a day (Tier 2), Athena requires a driver's license ID scan which captures name, birthdate, physical address, and ID number. A customer cannot proceed at this level without complying with this step. If a customer wishes to use a passport, at this level, the customer can contact Athena to validate the passport. If a customer purchases $3,000, the customer will also be required to submit their social security number. Athena has other compliance triggers for similar information over the course of a customer's spending as well as photos taken of the customer at each transaction. Athena has defined procedures for enhanced due diligence procedures based on a risk-based approach. These procedures utilize investigative software and customer question forms to obtain additional KYC and source of funds information. Athena also uses a sophisticated tool to ensure that when the Company transmits Bitcoin, it is not sent to a high risk or prohibited wallet. The tool will block any such transmissions. Finally, Athena utilizes a variety of anti-fraud measures including various warnings and a pledge of ownership that the customer owns and controls the submitted wallet.

If regulations change and require significantly more information to be collected from customers, this change may have a negative impact on customer behavior and could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock.

**We are subject to an extensive and highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws, rules, and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.**

Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, and legal and regulatory interpretations and guidance in the markets in which we operate. The scope of laws, rules, and regulations that can impact our business is expansive and includes certain of the requirements that apply to financial services, money transmission, privacy protection, cybersecurity, electronic payments, securities and commodities regulation, data governance, data protection, fraud detection, marketing. civil rights (including the Americans with Disabilities Act, which generally requires, among other things, that our employees be accessible to individuals with disabilities), competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. These laws include bespoke cryptocurrency and cryptocurrency laws that have been adopted in some jurisdictions that can impact cryptocurrency custody, exchange, and transfer, cross-border and domestic crypto asset transmissions.

Many of these laws, rules and regulations were adopted prior to the advent of the internet, mobile technologies, crypto assets and related technologies. As a result, some applicable laws, rules and regulations may not contemplate or address unique issues associated with crypto assets or the digital financial system, may be subject to significant uncertainty, and may vary widely across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of cryptocurrencies and the digital financial system requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. See also "*We are subject to an extensive and rapidly evolving regulatory environment, and if a particular crypto asset we transact or transacted in is characterized as a "security", we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition*".

To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of authorizations, registrations or licenses, limitations on our products and services, whistleblower complaints, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.

In addition to existing laws, rules and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the U.S. and in other jurisdictions may adopt new laws, rules, regulations and regulatory requirements. For example, we could become subject to laws, regulations or other regulatory action imposing restrictions, disclosure requirements or limitations on the transaction fees that we are able to charge our users for bitcoin transactions, including the markup at which we sell bitcoin to users and the separate flat transaction fee that we charge. As a result, we may not be able to sell bitcoin at a profitable margin, which would adversely affect our revenue and financial condition. Furthermore, new interpretations of existing laws, rules, and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the digital financial system as a whole and our legal and regulatory status in particular by changing how we operate our business, how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new registration or licensing requirements, or imposing a total ban on certain bitcoin transactions, as has occurred in certain jurisdictions in the past.

We are subject to ongoing supervision, examination, oversight, and reviews and currently are, and expect in the future, to be subject to investigations and inquiries, by U.S. federal and state regulators, and foreign financial service regulators. As a result of findings from these reviews and examinations, regulators have, are, and may in the future require us to take certain actions, including amending, updating, or revising our compliance policies and procedures from time to time, limiting the kinds of users that we provide services to, changing, terminating, or delaying our registrations or licenses and the introduction of our existing or new product and services, and undertaking further external audits. From time to time, we may receive examination reports citing violations of rules and regulations, inadequacies in existing compliance programs, and requiring us to enhance certain practices with respect to our compliance program, including user due diligence, transaction monitoring, training, and regulatory reporting and recordkeeping. Implementing appropriate measures to properly remediate these examination findings may require us to incur significant costs, and if we fail to properly remediate any of these examination findings, we could face civil litigation, significant fines, damage awards, forced removal of certain employees including members of our executive team, barring of certain employees from participating in our business in whole or in part, revocation of existing authorizations, registrations or licenses, limitations on existing and new products and services, reputational harm, negative impact to our existing relationships with regulators, exposure to criminal liability, or other regulatory consequences. Further, we believe increasingly strict legal and regulatory requirements and additional regulatory investigations and enforcement, any of which could occur or intensify, may continue to result in changes to our business practices, as well as increased costs, and supervision and examination for ourselves and our service providers. Moreover, new laws, rules, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors or could impact how we offer such products and services. Adverse changes to, or our failure to comply with, any laws, rules, and regulations have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.

**It may become illegal to acquire, own, hold, sell, or use Bitcoin or other cryptocurrencies, participate in blockchains or utilize cryptocurrencies in other countries, which would adversely affect us.** 

Although currently the use of crypto assets generally is not restricted in most countries, countries such as China and Russia have taken harsh regulatory actions to curb the use of cryptocurrencies and may continue to take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use cryptocurrencies or to exchange them for Fiat Currency. In September 2021, China instituted a blanket ban on all cryptocurrency transactions and mining, including services provided by overseas cryptocurrency exchanges in mainland China, effectively making all cryptocurrency-related activities illegal in China. In other nations, including Russia, it is illegal to accept payment in cryptocurrency for consumer transactions, and banking institutions are barred from accepting deposits of Bitcoin or other cryptocurrencies. In January 2022, the Central Bank of Russia called for a ban on crypto asset activities ranging from mining to trading. While our operations are currently limited to the U.S. and Latin America, such restrictions may adversely affect our growth potential or us if the restrictions limit the large-scale use of cryptocurrency or if the use of cryptocurrency becomes confined to certain regions globally. Such circumstances could have a material adverse effect on our business, prospects, operating results, and financial condition.

**The digital financial system is continually being developed. As a result, governments and policymakers are still considering what a regulatory regime for cryptocurrencies should look like. If we are unable to effectively react to future proposed legislation and regulation of cryptocurrencies or cryptocurrency businesses, our business, operating results, and financial condition could be adversely affected.**

The digital financial system is continually being developed and the new laws are being proposed and enacted. As a result, many policymakers are just beginning to consider what a regulatory regime for cryptocurrency should look like and the elements that would serve as the foundation for such a regime. As cryptocurrency has grown in both popularity and market size, various U.S. federal, state, and local and foreign governmental organizations, consumer protection agencies, and public advocacy groups have been examining the operations of cryptocurrency networks, users and platforms, with a focus on how cryptocurrencies can be used to launder the proceeds of illicit activities, fund criminal or terrorist enterprises, and the safety and soundness of platforms and other service providers that hold cryptocurrencies for users. Many of these entities have called for heightened regulatory oversight, and have proposed legislation and regulations, undertaken enforcement actions and/or issued consumer advisories describing the risks posed by cryptocurrencies to users and investors. The impacts of such potential and proposed heightened regulatory oversight are not yet known. For example, on November 20, 2023, the California Department of Financial Protection and Innovation ("DFPI") issued an invitation for comments on a potential rulemaking relating to two new California laws that will impose sweeping obligations on companies engaged in virtual currency activities in California and with California residents. The first law, Assembly Bill 39, prohibits people from engaging in digital financial asset business activity – or holding themselves out as being able to engage in digital financial asset business activity – without meeting certain criteria and obtaining a license from the DFPI, including compliance obligations and stable coin approvals among other guidelines. The second, Senate Bill 401, imposes requirements on operators of digital financial asset transaction kiosks. The DFPI refers to the two bills collectively as the Digital Financial Assets Law. The DFAL began taking effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2025.

Competitors, including traditional financial services, have spent years cultivating professional relationships with relevant policymakers on behalf of their industry so that those policymakers may understand that industry, the current legal landscape affecting that industry, and the specific policy proposals that could be implemented to responsibly develop that industry. The lobbyists working for these competitors have similarly spent years developing and working to implement strategies to advance these industries. Members of the digital financial system have started to engage policymakers directly and with the help of external advisors and lobbyists, but this work is still in a relatively nascent stage. As a result, new laws, rules, and regulations may be proposed and adopted in the U.S. and internationally, or existing laws, rules, and regulations may be interpreted in new ways, that harm the digital financial system or digital asset businesses, which could adversely impact our business.

**We may be subject to liability under, or face business risks in connection with, state cryptocurrency laws.**

Many states have also begun passing cryptocurrency kiosk laws, limiting the daily amount of cash that can be exchanged for cryptocurrencies, limiting the number of new ATMs which can be placed into service, requiring notices be placed near ATMs relating to potential scam and fraud risks, capping the amount of fees an ATM operator can charge, and in many cases, requiring the refund for fraudulent transactions (some of which only apply to first time customers). Such laws may limit the amount of revenue our ATMs can generate, limit our ability to expand the number of ATMs we operate, require us to expend significant amounts of money on signage or refunds, or otherwise reduce the amount of revenue we generate from the operation of our ATMs.

**Our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions may increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering.** 

If we expand our activities to other countries we do not currently operate in, we may become obligated to comply with additional laws, rules, regulations, policies, and legal interpretations of both the jurisdictions in which we operate and those into which we offer products and services on a cross-border basis. For instance, financial regulators outside the U.S. have in recent months significantly increased their scrutiny of digital asset exchanges, such as by requiring digital asset exchanges operating in their local jurisdictions to be regulated and licensed under local laws. Moreover, laws regulating financial services, the internet, mobile technologies, cryptocurrencies, and related technologies outside of the U.S. are evolving, extensive and could impose different, more specific, or even conflicting obligations on us, as well as broader liability. In addition, we are required to comply with laws, rules, and regulations related to economic sanctions and export controls enforced by U.S. Department of Commerce's Bureau of Industry and Security, and U.S. anti-money laundering and counterterrorist financing laws, rules, and regulations enforced by FinCEN and certain state financial services regulators. U.S. sanctions and export control laws and regulations generally restrict dealings by persons subject to U.S. jurisdiction with certain jurisdictions that are the target of comprehensive embargoes, currently the Crimea Region, the Donetsk People's Republic of Ukraine, the Luhansk People's Republic of Ukraine, Cuba, Iran, North Korea, and Syria, as well as with persons, entities, and governments identified on certain prohibited party lists. Moreover, as a result of the Russian invasion of Ukraine, the U.S., the E.U., the United Kingdom, and other jurisdictions have imposed wide-ranging sanctions on Russia and Belarus and persons and entities associated with Russia and Belarus. There can be no certainty regarding whether such governments or other governments will impose additional sanctions, or other economic or military measures against Russia or Belarus.

We have an Office of Foreign Assets Control ("OFAC") compliance program in place that includes monitoring of IP addresses to identify prohibited jurisdictions and of blockchain addresses that have either been identified by OFAC as prohibited or that otherwise are believed by us to be associated with prohibited persons or jurisdictions. Nonetheless, there can be no guarantee that our compliance program will prevent transactions with particular persons or addresses or prevent every potential violation of OFAC sanctions, and our expansion into additional jurisdictions may subject us to additional risks related to use of our services by sanctioned persons.

From time to time, we have submitted voluntary disclosures to OFAC or responded to administrative subpoenas from OFAC. Certain of these voluntary self-disclosures are currently under review by OFAC. To date, none of those proceedings has resulted in a monetary penalty or finding of violation. Any present or future government inquiries relating to sanctions could result in negative consequences for us, including costs related to government investigations, financial penalties, and harm to our reputation. The impact on us related to such matters could be substantial. Although we have implemented controls and are working to implement additional controls and screening tools designed to prevent sanctions violations, there is no guarantee that we will not inadvertently provide access to our products and services to sanctioned parties or jurisdictions in the future.

 

**Complex and evolving U.S. and international laws, rules and regulation regarding privacy and data protection could result in claims, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business.**

 

We are subject to requirements relating to data privacy and the collection, processing, storage, transfer, and use of data under U.S. federal, state and foreign laws. For example, the U.S. Federal Trade Commission (FTC) routinely investigates the privacy practices of companies and has commenced enforcement actions against many, resulting in multi-million dollar settlements and multi-year agreements governing the settling companies' privacy practices. The California Consumer Protection Act, which became effective on January 1, 2020, imposes heightened data privacy requirements on companies that collect information from California residents. If we are unable to meet any such requirements, we may be subject to significant fines or penalties. As the number of jurisdictions enacting privacy and related laws increases and the scope of these laws and enforcement efforts expands, we will increasingly become subject to new and varying requirements. Failure to comply with existing or future data privacy laws, rules, regulations and requirements, including by reason of inadvertent disclosure of personal information, could result in significant adverse consequences, including reputational harm, civil litigation, regulatory enforcement, costs of remediation, increased expenses for security systems and personnel, and harm to our users. These consequences could materially adversely affect our business, financial condition and results of operations.

In addition, we make information available to certain U.S. federal and state agencies, as well as certain foreign, government agencies in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and pursuant to legal obligations and authorizations. In recent years, we have experienced increasing data sharing requests by these agencies, particularly in connection with efforts to prevent terrorist financing or reduce the risk of identity theft. During the same period, there has also been increased public attention to the corporate use and disclosure of personal information, accompanied by legislation and regulations intended to strengthen data protection, information security, and consumer privacy. These regulatory goals may conflict, and the law in these areas may not be consistent or settled. While we believe that we are compliant with our regulatory responsibilities, the legal, political, and business environments in these areas are rapidly changing, and subsequent legislation, regulation, litigation, court rulings or other events could expose us to increased program costs, liability and reputational damage that could have a material adverse effect on our business, financial condition, and results of operations.

**Future developments in tax laws or regulations regarding the treatment and reporting of cryptocurrencies for U.S. and foreign tax purposes could adversely impact our tax expense and liabilities, reporting obligations, liquidity, and business.**

Due to the new and evolving nature of cryptocurrencies and the absence of comprehensive legal and tax guidance with respect to digital asset products and transactions, many significant aspects of the U.S. and foreign tax treatment of transactions involving cryptocurrencies, such as the purchase and sale of cryptocurrencies, are uncertain, and it is unclear whether, when and what guidance may be issued in the future on the treatment of digital asset transactions for U.S. and foreign income tax purposes. In 2014, the IRS released Notice 2014-21, discussing certain aspects of "virtual currency" for U.S. federal income tax purposes and, in particular, stating that such virtual currency (i) is "property," (ii) is not "currency" for purposes of the rules relating to foreign currency gain or loss, and (iii) may be held as a capital asset. In 2019, the IRS released Revenue Ruling 2019-24 and a set of "Frequently Asked Questions" (which have been periodically updated), that provide additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of virtual currency. However, this guidance does not address other significant aspects of the U.S. federal income tax treatment of cryptocurrencies and related transactions.

There continues to be uncertainty with respect to the timing, character and amount of income inclusions for various digital asset transactions. Although we believe our treatment of digital asset transactions for federal income tax purposes is consistent with existing guidance provided by the IRS and existing U.S. federal income tax principles, because of the rapidly evolving nature of digital asset innovations and the increasing variety and complexity of digital asset transactions and products, it is possible the IRS and various U.S. states may disagree with our treatment of certain digital asset transactions for U.S. tax purposes, which could adversely affect our users and our business. Similar uncertainties exist in the foreign markets in which we operate, affecting our non-U.S. user base, and these uncertainties and potential adverse interpretations of tax law could affect our non-U.S. users and the vitality of our platforms outside of the U.S. There can be no assurance that the IRS, the U.S. state revenue agencies or other foreign tax authorities, will not alter their respective positions with respect to cryptocurrencies in the future or that a court would uphold the treatment set forth in existing guidance. It also is unclear what additional guidance may be issued in the future on the treatment of existing digital asset transactions and future digital asset innovations for purposes of U.S. tax or other foreign tax regulations. Any such alteration of existing IRS, U.S. state and foreign tax authority positions or additional guidance regarding digital asset products and transactions could result in adverse tax consequences for holders of cryptocurrencies and could have an adverse effect on the value of cryptocurrencies and the broader cryptocurrency markets. Future technological and operational developments that may arise with respect to cryptocurrencies may increase the uncertainty with respect to the treatment of cryptocurrency for U.S. and foreign tax purposes. The uncertainty regarding tax treatment of digital asset transactions impacts our users, and could adversely impact our business, including if the volume of cryptocurrency transactions decreases due to an adverse tax effect.

**Sanctions could cause us to cease operations in foreign countries or dealings with foreign citizens.**

Sanctions, such as those promulgated by the U.S. Department of Treasury, could be brought against countries where the Company operates, or against citizens of certain countries regardless of where they reside. Ceasing operations in such a country would have a negative impact on revenues and the Company may also incur extraordinary costs which may adversely impact an investment in our common stock.

**Heightened scrutiny by regulators could be detrimental to the operations of the Company or its brand image.**

Our existing operations and any future operations or investments may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the United States or globally. As a result, we may be subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on our ability to operate or invest in the United States or any other jurisdiction, in addition to those described herein. Further any negative connotations directed at the Company by such public officials could be detrimental to the Company's brand image and adversely impact an investment in our common stock.

**We or our assets may become subject to federal and state asset forfeiture laws which could negatively impact our business operations or financial position.**

Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions, or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, seizure of assets, disgorgement of profits, cessation of business activities or divestiture.

As an entity that conducts business in cash (physical currency), we are potentially subject to federal and state forfeiture laws (criminal and civil) that permit the government to seize the proceeds of suspected criminal activity. Civil forfeiture laws could provide an alternative for the federal government or any state (or local police force) that wants to discourage residents from conducting transactions with crypto asset related businesses. Also, an individual can be required to forfeit property suspected to be the proceeds of a crime even if the individual is not charged or convicted of a crime. Many law enforcement agencies consider large amounts of cash to be suspicious of criminal activity and have been known to seize such property when discovered. Any seizure or forfeiture of the Company's assets, even if only temporary, could disrupt its normal operations or financial position and negatively affect an investment in our common stock.

**Regulators and payment processors have historically taken actions relating to access to banking services, which could materially adversely affect our business.**

Actions by the U.S. Department of Justice (the "Justice Department"), the Federal Deposit Insurance Corporation, ("FDIC"), and certain state regulators beginning in 2013, referred to as "Operation Choke Point," appear to have been intended to discourage banks and payment processors from providing access to banking for certain businesses that are considered high-risk. This heightened regulatory scrutiny by the Justice Department, the FDIC and other regulators has caused various banks and payment processors to cease doing business with Bitcoin ATM companies or companies who do business with Bitcoin ATM companies, without consideration of the actual risk to the banks or processors, simply to avoid heightened federal and state regulatory scrutiny. The operation was officially ended in August 2017; however, future discouragement by the Justice Department, the FDIC, or the Office of the Comptroller of the Currency ("OCC") could cause the Company, or its service providers including locations where the Company places its fleet of Bitcoin ATMs, to have restricted access to the U.S. financial system as provided by banks, payment providers, or other financial intermediaries, and that could have a negative impact on the Company's operations, its ability to perform its contractual obligations, or its financial position.

**If the Company is unable to satisfy data protection, security, privacy, and other government- and industry-specific requirements, its growth could be harmed.**

There are several data protections, security, privacy, and other government and industry-specific requirements, including those that require companies to notify individuals of data security incidents involving certain types of personal data, enacted across various jurisdictions globally. In addition, our agreements to deliver software may have requirements for the protection of user data. Security compromises or cyberattacks could harm the Company's reputation, erode market confidence in the effectiveness of its security measures and reliability of its endorsements, negatively impact its ability to attract new clients, or cause clients to stop using the Company's services.

**The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected.**

The accounting rules and regulations that we must comply with are complex and subject to interpretation by the FASB, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. In addition to the United States, the Company operates in several Latin American countries that may or may not offer similar accounting treatments to some of the Company's transactions. This could have a significant effect on the ability of the Company to offer comparable results segmented by country in the future. A change in these principles or interpretations could have a significant effect on our reported financial results and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Recent actions and public comments from the FASB and the SEC have focused on the integrity of financial reporting and internal controls. In addition, many companies' accounting policies are being subject to heightened scrutiny by regulators and the public.

On December 13, 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. When adopting the standard, entities are required to record a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. Retrospective restatement would not be required or allowed for prior periods. For all entities, the ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company adopted this ASU as of January 1, 2025. There was no material impact on the financial statements due to the Company's holding period of crypto assets being typically two days or less.

**Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government of officials, and if those negative characterizations become increasingly accepted by current or potential new users and/or our retail partners, or result in restrictions or limitations on the fees we charge to users, our reputation could be significantly impacted, which when coupled with required modifications to our fee model could result in decreased demand for our products and services and a corresponding decrease in our transaction volume, all of which could materially and adversely impact our business.**

Certain media reports have asserted that laws and regulations regarding cryptocurrencies and related transactions and activities should be broader and more restrictive. In many cases, these media reports can focus on fees charged to users, which are often alleged to be higher than the fees typically charged by banks or similar institutions, as well as marketing tactics, which are alleged to target socioeconomically vulnerable communities. The fees and marketing strategies associated with our kiosks are from time to time characterized by consumer advocacy groups and media reports as predatory or abusive without discussing the numerous benefits to users. If the negative characterization of our marketing strategies and/or fee structure becomes increasingly accepted by current or potential new users of our ATMs, demand for our products and services could decrease, which could have a material adverse effect on our business, results of operations and financial condition.

If we are unable to effectively respond to such characterizations, or if there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell bitcoin to users, we may experience declines in user loyalty and transactions, which could have a material adverse effect on our business, results of operations and financial condition. Additionally, any actions by our competitors that are challenged by users, advocacy groups, the media or governmental agencies or entities as being abusive or predatory, could result in our products and services being perceived as unlawful or inappropriate activities or business practices, merely because we operate in the same general industries as such competitors. Such perception, whether or not accurate, could have a material adverse effect on our business, results of operations and financial condition, and as a result, the value of our common stock.

**Litigation or investigations involving us, our agents or other contractual counterparties could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations.**

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From time to time we are subject to allegations and complaints that individuals or entities have used our products and services for fraud-induced money transfers, as well as certain money laundering activities, which may result in fines, penalties, judgments, settlements and litigation expenses. We also are the subject from time to time of litigation related to our business (including as discussed under "Item 1. Legal Proceedings"). For example, we are from time to time subject to allegations from various U.S. states that our activities constitute those of a money transmitter, and allegations that we failed to register as a money transmitter in those states. To date we have agreed to various consent orders and settlements with such states, none of which represent material amounts of penalties, assessments or fees, to settle such claims. The outcome of such ongoing and future allegations, complaints, claims and litigation cannot be predicted.

Regulatory and judicial proceedings and potential adverse developments in connection with ongoing litigation may adversely affect our business, financial condition and results of operations. There may also be adverse publicity associated with lawsuits, consents, and investigations that could decrease third-party and consumer use and acceptance of our products and services. Additionally, our business may be the subject of class action lawsuits including securities litigation, regulatory actions and investigations and other general litigation. The outcome of class action lawsuits, including securities litigation, regulatory actions and investigations and other litigation is difficult to assess or quantify but may include substantial fines and expenses, as well as the revocation of required authorizations, registrations or licenses or the loss of approved status, which could have a material adverse effect on our business, financial position, and results of operations or users' confidence in our business. Plaintiffs or regulatory agencies in these lawsuits, actions or investigations may seek recovery of very large or indeterminate amounts, and the magnitude of these actions may remain unknown for substantial periods of time. The cost to defend or settle future lawsuits or investigations may be significant. In addition, improper activities, lawsuits or investigations involving third-parties may adversely impact our business operations or reputation even if we are not directly involved. Any adverse outcome in these or other proceedings, including any that may be asserted in the future, could harm our reputation, and have an adverse impact on our business, financial condition, results of operations, cash flows, or prospects. We cannot assure you what the ultimate outcome of any particular dispute or legal proceeding will be.

**New regulation or legislation may impact our business operations and financial results.**

The Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions effective in September 2024, requires brokers, including digital asset trading platforms, digital asset payment processors, and certain digital asset hosted wallets, to file information returns, and furnish payee statements, on dispositions of digital assets effected for customers in certain sale or exchange transactions. The impact of these regulations on businesses can be significant.

These regulations could increase compliance costs, create operational challenges, cause our general and administrative costs to increase and potentially impact the profitability of our businesses.

To comply with laws adopted by the United States government or other United States or foreign regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of which may cause our general and administrative and compliance costs to increase without an ability to pass through any increased expenses through higher prices considering that other federal and state regulations may also place restrictions on volume, margin and pricing.

The Company is diligently monitoring developments related to these regulations, but the ultimate outcome and the specific requirements that may be imposed remain uncertain. The uncertainty surrounding the interpretation and enforcement of these regulations may create additional challenges in our digital asset transactions and reporting practices as the regulatory landscape evolves.

**<u>Risk Factors Related to Intellectual Property</u>**

**Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition.**

Our business depends in large part on our proprietary technology and our brand. We rely on, and expect to continue to rely on, a combination of trademark, trade dress, domain name, copyright, and trade secret and laws, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights. However, our efforts to protect our intellectual property rights may not be sufficient or effective. Our proprietary technology and trade secrets could be lost through misappropriation or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. There can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services, or technologies that are substantially like ours and that compete with our business.

**We may in the future be sued by third parties for alleged infringement of their proprietary rights.**

In recent years, there has been considerable patent, copyright, trademark, domain name, trade secret and other intellectual property development activity in the crypto economy, as well as litigation, based on allegations of infringement or other violations of intellectual property, including by large financial institutions. Furthermore, individuals and groups (collectively "patent trolls") can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. Our use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation. We cannot guarantee that our internally developed or acquired technologies and content do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or services or using certain technologies, force us to implement expensive workarounds, or impose other unfavorable terms. We expect that the occurrence of infringement claims is likely to grow as the market grows and matures. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources. Further, during any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities analysts and investors regard these announcements as negative, the market price of our common stock may decline. Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures. Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial condition and negatively affect an investment in our common stock.

**<u>Risk Factors Related to Our Employees and Other Service Providers</u>**

**The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could adversely impact our business, operating results, and financial position.**

We operate in a new industry that is not widely understood and requires highly skilled and technical personnel. We believe that our future success is highly dependent on the talents and contributions of our senior management team, members of our executive team, and other key employees across operations, customer support, finance, and compliance. Our future success depends on our ability to attract, develop, motivate, and retain highly qualified and skilled employees. Due to the nascent nature of the crypto asset industry, in particular the Bitcoin ATM market, the pool of qualified talent is extremely limited, particularly with respect to executive talent, engineering, cross-border operations, risk management, and financial regulatory expertise. We face intense competition for qualified individuals from numerous software, finance and other technology companies. To attract and retain key personnel, we incur significant costs, including salaries, benefits and equity incentives. Even so, these measures may not be enough to attract and retain the personnel we require to operate our business effectively. The loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business could adversely impact our operating results and impair our ability to grow.

**In the event of employee or service provider misconduct or error, our business may be adversely impacted.**

Employee or service provider misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of funds, identity theft, misappropriation of information, failing to supervise other employees or service providers, and improperly using confidential information. Employee or service provider errors, including mistakes in executing, recording, or processing transactions for customers, could expose us to the risk of material losses even if the errors are detected. Although we have implemented processes and procedures and provide training to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful. Moreover, the risk of employee or service provider error or misconduct may be even greater for novel products and services. It is not always possible to deter misconduct, and the precautions we take to prevent and detect such activities may not be effective in all cases. If we were found to have not met our regulatory oversight, compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, and restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation.

**Our officers, directors, employees, and large shareholders may encounter potential conflicts of interests with respect to their positions or interests in certain crypto assets, projects, entities, and other initiatives, which could adversely affect our business and reputation.**

Certain of our officers, directors, and employees are involved with or active investors in certain digital asset-related businesses, such as cryptocurrency miners, as well as active investors in digital asset projects themselves, and may make investment decisions that favor projects that they have personally invested in. Our largest stockholders may also make investments in these digital asset projects. Similarly, certain of our directors, officers, employees, and large stockholders may hold cryptocurrencies that we are considering supporting and may be more supportive of such listing notwithstanding legal, regulatory, and other issues associated with such cryptocurrencies. While we have instituted policies and procedures to limit and mitigate such risks, there is no assurance that such policies and procedures will be effective, or that we will be able to manage such conflicts of interests adequately. If we fail to manage these conflicts of interests, or we receive unfavorable media coverage with respect to actual or perceived conflicts of interest, our business may be harmed and the brand, reputation and credibility of our company may be adversely affected.

Additionally, we frequently engage in a wide variety of transactions and maintain relationships with a significant number of other firms in the broad economy surrounding Bitcoin, blockchain and other crypto assets. These transactions and relationships could create potential conflicts of interests in management decisions that we make. For instance, certain officers, directors, and employees of the Company are active investors in crypto projects themselves, and may make investment decisions that favor projects that they have personally invested in. Many of our large shareholders also make investments in these crypto projects.

**We depend heavily on our senior management, including our Chief Executive Officer. The ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so may adversely affect our revenues and as a result could materially adversely affect our business, financial condition and results of operations.**

We must retain the services of our key employees and strategically recruit and hire new talented employees. Our future business and results of operations depend in significant part upon the continued contributions of our senior management personnel, particularly our Chief Executive Officer, Matias Goldenhörn. If we lose his services or if he fails to perform in his current position, or if we are not able to attract and retain skilled personnel as needed, our business could suffer. Significant turnover in our senior management could significantly deplete our institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key personnel in managing our operations, product development, marketing and sales aspects of our business, any part of which could be harmed by turnover in the future.

Moving forward, should the services of Mr. Goldenhörn be lost for any reason, we will incur costs associated with recruiting replacements and any potential delays in operations which this may cause. If we are unable to replace such individual with a suitably trained alternative individual(s), we may be forced to scale back or curtail our business plan.

***<u>Risks Associated with Our Governing Documents and Nevada Law</u>***

**Our Second Amended and Restated Articles of Incorporation provide for indemnification of officers and directors at our expense, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.**

Our Second Amended and Restated Articles of Incorporation provide for us, to the fullest extent permitted by the Nevada Revised Statutes (NRS) and other applicable law, to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which the NRS permits the Company to provide indemnification).

Notwithstanding the above, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Company), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder.

These indemnification obligations may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the reasonable opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares.

**Our board of directors can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change of control of our company more difficult even if it might benefit our stockholders.**

Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Shares of preferred stock may be issued by our board of directors without stockholder approval, with voting powers and such preferences and relative, participating, optional or other special rights and powers as determined by our board of directors, which may be greater than the shares of common stock currently outstanding. As a result, shares of preferred stock may be issued by our board of directors which cause the holders to have majority voting power over our shares, provide the holders of the preferred stock the right to convert the shares of preferred stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock stockholders and/or have other rights and preferences greater than those of our common stock stockholders including having a preference over our common stock with respect to dividends or distributions on liquidation or dissolution.

Investors should keep in mind that the board of directors has the authority to issue additional shares of common stock and preferred stock, which could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred stock which we may issue may be exacerbated given the fact that such preferred stock may have voting rights and/or other rights or preferences which could provide the preferred stockholders with substantial voting control over us and/or give those holders the power to prevent or cause a change in control, even if that change in control might benefit our stockholders. As a result, the issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease.

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**Our Second Amended and Restated Articles of Incorporation contain a specific provision that limits the liability of our directors and officers and requires us, under certain circumstances, to indemnify officers, directors and employees.**

The limitation of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights to them may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

**Anti-takeover provisions in our Second Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws, as well as provisions of Nevada law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our securities.**

Our Second Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, and Nevada law contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for our securities. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the removal of directors only with the approval of shareholders
holding at least two-thirds of the voting power of the issued and outstanding stock entitled to vote in the election of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· authorizing blank check preferred stock, which could be issued
with voting, liquidation, dividend and other rights superior to our common stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· limiting the liability of, and providing indemnification to,
our directors and officers.

Any provision of our Second Amended and Restated Articles of Incorporation or Amended and Restated Bylaws, or Nevada law that has the effect of delaying or deterring a change in control could limit the opportunity for our shareholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.

**We will indemnify and hold harmless our officers and directors to the maximum extent permitted by Nevada law.**

Our bylaws provide that we will indemnify and hold harmless our officers and directors against claims arising from our activities, to the maximum extent permitted by Nevada law. In addition, if we are called upon to perform under our indemnification agreements entered into with each one of our directors, then the portion of our assets expended for such purpose would reduce the amount otherwise available for our business.

**<u>Risks Related to SEC Reporting and Public Company Status</u>**

**We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.**

Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. As of September 30, 2025, our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures were not effective. Separately, in connection with the preparation of the Company's consolidated financial statements as of December 31, 2024, management identified material weaknesses in the Company's internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

As of December 31, 2024, the material weakness in our internal control over financial reporting related to (i) the fact that the Company did not have a formalized system of internal control over financial reporting in place to ensure that risks are properly assessed, certain accounts are properly reconciled, controls are properly designed and implemented and internal controls are properly monitored and functioning, and (ii) the Company's reliance on IT systems and the use of service organizations to initiate, process, and record transactions, for which it did not evaluate or test the respective control objectives and data provided by the service organizations, and did not maintain a sufficient complement of formally documented general IT controls over access, segregation of duties, security, and change management. Management has concluded that these material weaknesses arose because, the Company did not have the necessary business processes, personnel and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

To address the material weaknesses, the Company will need to add personnel as well as implement additional financial reporting processes and related internal controls. Management intends to continue to take steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, further enhancing the Company's accounting processes and risk assessment, and by designing, implementing and monitoring the respective controls. Management will not be able to fully remediate these material weaknesses until these steps have been completed and the controls have been operating effectively for a sufficient period of time. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects or that the actions that management may take in the future will be sufficient to remediate the control deficiencies that led to the material weaknesses in internal control over financial reporting or that they will prevent or detect potential future material weaknesses. The Company's current controls and any new controls that management develops may become inadequate because of changes in conditions in the business and weaknesses in disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm the operating results or cause the Company to fail to meet the reporting obligations and may result in a restatement of the Company's financial statements for prior periods.

Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as possible. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock, and/or result in litigation against us or our management. In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or facilitate the fair presentation of our financial statements or our periodic reports filed with the SEC.

**We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to "emerging growth companies" or "smaller reporting companies," this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies*.***

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and, for as long as we continue to be an "emerging growth company," we currently take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements (provided that we are not currently required to file proxy statements), and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth until December 31, 2030, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.2357 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.

Additionally, we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior December 31st, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior December 31st. To the extent we take advantage of such reduced disclosure obligations, it may also make a comparison of our financial statements with other public companies difficult or impossible.

After we are no longer an "emerging growth company," we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict or estimate the number of additional costs we may incur or the timing of such costs.

**Being a public company results in additional expenses, diverts management's attention and could also adversely affect our ability to attract and retain qualified directors.**

As a public reporting company, we are subject to the reporting requirements of the Exchange Act. These requirements generate significant accounting, legal and financial compliance costs and make some activities more difficult, time consuming or costly and may place significant strain on our personnel and resources. The Exchange Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to establish the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight are required.

As a result, management's attention may be diverted from other business concerns, which could have an adverse and even material effect on our business, financial condition and results of operations. These rules and regulations may also make it more difficult and expensive for us to obtain director and officer liability insurance. If we are unable to obtain appropriate director and officer insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent, could be adversely impacted.

**We incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices*.***

As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an "emerging growth company." The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

**Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.** 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of the Sarbanes-Oxley Act, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.

We do not currently have an independent audit or compensation committee. As a result, directors have the ability, among other things, to determine each other's level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.

We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it costlier or deter qualified individuals from accepting these roles.

**If our estimates or judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.**

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates." The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve the identification of performance obligations in revenue recognition, evaluation of tax positions, and crypto assets we hold, among others. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our common stock.

**<u>Risks Relating to Our Proposed Reverse Stock Split</u>**

**We anticipate effecting a reverse stock split of our outstanding common stock.**

We expect that the Reverse Stock Split will increase the market price of our common stock while our stock is trading and enable us to meet the minimum market price requirement of the listing rules of the Nasdaq Capital Market. However, the effect of a reverse stock split upon the market price of our common stock cannot be predicted with certainty, and the results of reverse stock splits by companies in similar circumstances have been varied. It is possible that the market price of our common stock following the reverse stock split will not increase sufficiently for us to be in compliance with the minimum market price requirement of the Nasdaq Capital Market, or if it does, that such price will not be sustained long enough for us to meet the initial listing standards of Nasdaq. If we are unable to meet the minimum market price requirement, we may be unable to list our shares on The Nasdaq Capital Market, in which case such an offering may not be completed.

**Even if the Reverse Stock Split achieves the requisite increase in the market price of our common stock, there can be no assurance that we will be approved for listing on the Nasdaq Capital Market or be able to comply with other continued listing standards of the Nasdaq Capital Market.**

Even if the market price of our common stock increases sufficiently so that we comply with the minimum market price requirement, we cannot assure you that we will be able to comply with the other standards that we are required to meet in order to be approved for listing on the Nasdaq Capital Market or maintain a listing of our common stock on the Nasdaq Capital Market. Our failure to meet these requirements may result in our common stock being delisted from the Nasdaq Capital Market.

**The Reverse Stock Split may decrease the liquidity of the shares of our common stock.**

The liquidity of the shares of our common stock may be affected adversely by the Reverse Stock Split given the reduced number of shares that will be outstanding following the Reverse Stock Split. In addition, the Reverse Stock Split may increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty affecting such sales.

**Our Reverse Stock Split may not result in a proportional increase in the per share price of our common stock.**

Our shareholders have approved a 1-for-300 Reverse Stock Split of our common stock subject to FINRA approval, with the primary intent of increasing the price of our common stock in order to gain compliance with the Nasdaq bid price requirement. The effect of the Reverse Stock Split on the market price for our common stock cannot be accurately predicted. In particular, we cannot assure you that the proportionate increase in the prices of our common stock immediately after the Reverse Stock Split from the prices for shares of our common stock immediately before the Reverse Stock Split will be maintained for us to regain compliance with the Nasdaq bid price requirement or that such market prices will be maintained for a substantial period of time. It is not uncommon for the market price of a company's common stock to decline in the period following a Reverse Stock Split. If the market price of our common stock declines following the Reverse Stock Split, the percentage decline may be greater than would occur in the absence of a Reverse Stock Split. The market price of our common stock may also be affected by other factors which may be unrelated to the Reverse Stock Split or the number of shares outstanding.

**<u>Risk Factors Related to Ownership of Our Common Stock</u>**

**The market price of our common stock has been volatile in the past and may continue to be volatile and could decline significantly and rapidly.**

 ****

The market price of our common stock has in the past been, and in the future may continue to be subject to wide fluctuations in response to factors beyond our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the number of shares of common stock publicly owned and available
for trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· overall performance of the equity markets or publicly-listed
financial services, cryptocurrency and technology companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· our actual or anticipated operating performance and the operating
performance of our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· changes in the projected operational and financial results we
provide to the public or our failure to meet those projections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· failure of securities analysts to initiate or maintain coverage
of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations
of investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· any major change in our board of directors, management or key
personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the highly volatile nature of the digital financial system and
the prices of cryptocurrencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· rumors and market speculation involving the digital financial
system or us or other companies in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· announcements by us or our competitors of significant innovations,
new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or
capital commitments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· other events or factors, including those resulting from political
instability, and acts of war, or terrorism, or responses to these events, including the current conflict in Ukraine.

In addition, broad market and industry fluctuations, as well as general macroeconomic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Securities litigation against us could result in substantial costs and divert our management's attention from other business concerns, which could harm our business.

**Our common stock price has in the past been, and may in the future be, volatile.**

The market price of our common stock has in the past been, and may in the future be, highly volatile and subject to wide fluctuations. Our common stock is currently quoted on the OTC ID Tier of the OTC Markets under the symbol "ABIT". The high and low sales prices of our common stock over the prior 52 weeks were $0.012 and $0.264, respectively.

Our financial performance, government regulatory action, tax laws, interest rates, and market conditions in general could have a significant impact on the future market price of our common stock.

Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include:

● actual or anticipated variations in our quarterly operating results;

● changes in market valuations of similar companies;

● adverse market reaction to the level of our indebtedness;

● additions or departures of key personnel;

● actions by stockholders;

● speculation in the press or investment community;

● general market, economic, and political conditions, including an economic slowdown or dislocation in the global credit markets;

● our operating performance and the performance of other similar companies;

● changes in accounting principles; and

● passage of legislation or other regulatory developments that adversely affect us or our industry.

Other factors unrelated to our performance that may affect the price of the Company's securities include the following: (i) the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow the Company; (ii) lessening in trading volume and general market interest in the Company's securities may affect an investor's ability to trade significant numbers of the Company's securities; (iii) the size of our public float may limit the ability of some institutions to invest in the Company's securities; and (iv) a substantial decline in the price of the Company's securities that persists for a significant period of time could cause the Company's securities, if listed on an exchange, to be delisted from such exchange further reducing market liquidity. As a result of any of these factors, the market price of the Company's securities at any given point in time may not accurately reflect our long-term value. Class action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management's attention and resources.

The fact that no material market currently exists for the Company's securities may affect the pricing of the Company's securities in the secondary market, the transparency and availability of trading prices and the liquidity of the Company's securities. The market price of the Company's securities is affected by many other variables which are not directly related to our success and are therefore not within our control. These include other developments that affect the market for all cryptocurrency industry securities, the breadth of the public market for our Company's securities and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Company's securities is expected to make the price of the Company's securities volatile in the future, which may result in losses to investors.

**Our founders, single major shareholder, and director control, and may continue to control, our Company for the foreseeable future, including the outcome of matters requiring shareholder approval.**

Our founders, along with a single major shareholder, beneficially own approximately 78.8% of our outstanding shares of common stock. In particular the founders include Eric Gravengaard, who beneficially owns 28.1% of our outstanding shares of common stock, and Tom Kerestes, who beneficially owns 10.5% of our outstanding shares of common stock. Michael Komaransky is the single major shareholder who beneficially owns 40.8% of the Company. Combined, these three beneficially own approximately 75.8% of our outstanding shares of common stock. While such persons have not formed a group and have not decided to vote together on Company matters, such persons will collectively, for the foreseeable future, have the ability, if acting together, to control the election of our directors and the outcome of corporate actions requiring shareholder approval, such as: (i) a merger or a sale of our company, (ii) a sale of all or substantially all of our assets, and (iii) amendments to our articles of incorporation and bylaws.

Our majority stockholders may have interests, with respect to their common stock, that are different from other holders of our common stock and the concentration of voting power held by our majority stockholders may have an adverse effect on the price of our common stock.

In addition, this concentration of ownership might adversely affect the market price of our common stock by: (1) delaying, deferring or preventing a change of control of our Company; (2) impeding a merger, consolidation, takeover or other business combination involving our Company; or (3) discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company. Additionally, the interests of our majority stockholders may differ from the interests of the other shareholders and thus result in corporate decisions that are adverse to other shareholders.

Any investor who purchases shares in the Company will be a minority shareholder and as such will have little to no say in the direction of the Company and the election of directors. Additionally, it will be difficult for investors to remove our current directors, which will mean they will remain in control of who serves as officers of the Company as well as whether any changes are made in the Board of Directors. As a potential investor in the Company, you should keep in mind that even if you own shares of the Company's common stock and wish to vote them at annual or special shareholder meetings, your shares will likely have little effect on the outcome of corporate decisions. Because of the voting control of our majority stockholders, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Additionally, the interests of our majority stockholders may differ from the interests of the other shareholders and thus result in corporate decisions that are adverse to other shareholders. This concentrated control limits or severely restricts other shareholders' ability to influence corporate matters and our majority stockholders may take actions that some of our shareholders do not view as beneficial, each of which could reduce the market price of our securities.

**Our securities are "Penny Stocks" that may make them less desirable or accessible by investors or potential investors.**

Rule 15g-9 under the Exchange Act establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer must approve a person's account for transactions in penny stocks; and (b) the broker or dealer must receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks

**The issuance of common stock upon conversion of our convertible debenture will cause immediate and substantial dilution to existing shareholders.**

On January 31, 2020, the Company entered into a convertible debenture agreement with KGPLA (whose Chief Investment Officer is Huaxing "Jason" Lu, our director). The convertible debenture provided for a principal amount of $3,000,000, with a maturity date of January 31, 2025, which was extended to January 31, 2026. Interest as defined by the agreement is 8% per annum. The Secured Convertible Debenture is convertible into shares of the Company's common stock at a conversion price equal to $0.012 per share or, if lower, a price determined by specified formulas depending on the type of conversion event: (a) upon the next sale (or series of related sales) by the Company of additional equity securities under an exemption from registration available under the rules promulgated under the Securities Act, from which the Company receives gross proceeds of not less than $3,000,000 (the "Next Equity Financing"); provided that, for clarification, this is not meant to include any actions or listing for trading on the OTC Markets, the conversion price will be the lesser of (i) the lowest per share purchase price of the equity securities issued in such financing, reduced by a 20% discount, or (ii) the price per share equal to a valuation cap of $70,282,176 (the "Valuation Cap"), divided by the Company's fully diluted capitalization immediately prior to the financing; (b) in the event of our first underwritten public offering of common stock under the Securities Act whereby our common stock is listed or admitted for trading on a national stock exchange in the United States, as reported on the principal national security exchange or quotation system on which such security is quoted or listed ("IPO"), the conversion price will be the lesser of (i) the lowest per share purchase price of equity securities issued in the IPO, reduced by a 20% discount, or (ii) 90% of the quotient obtained by dividing the Valuation Cap by the fully diluted capitalization immediately prior to the IPO; (c) in connection with a corporate transaction, including certain mergers, consolidations, changes of control or sales of substantially all assets, the conversion price will equal the Valuation Cap divided by the fully diluted capitalization immediately prior to such transaction; and (d) for conversions occurring at or after maturity or at the option of the investor at any time, the conversion price will also equal the valuation cap divided by the fully diluted capitalization immediately prior to such conversion. "Fully diluted capitalization" includes all outstanding shares of capital stock on an as-converted basis and reserved equity incentive shares, but excludes certain debt instruments with an aggregate face value of $500,000 or less, specified Secured Convertible Debentures and SAFEs or SAFTs of up to $500,000.

The convertible debenture was amended and restated as of May 15, 2023, and became a secured, and not general unsecured, obligation of the Company, on par with the notes issued pursuant to the Senior Secured Loan Agreement entered into as of the same date. As of September 30, 2025 and December 31, 2024, the outstanding principal amount of the debenture was $3,000,000 and $3,000,000, respectively.

The issuance of common stock upon conversion of the convertible debenture will result in immediate and substantial dilution to the interests of other stockholders. The availability of shares of common stock upon conversion of the convertible debenture for public resale, as well as any actual resales of these shares, could adversely affect the trading price of our common stock. We cannot predict the size of future issuances of our common stock upon the conversion of our convertible debenture, or the effect, if any, that future issuances and sales of shares of our common stock may have on the market price of our common stock. Sales or distributions of substantial amounts of our common stock upon the conversion of our convertible debenture, or the perception that such sales could occur, may cause the market price of our common stock to decline.

In addition, the common stock issuable upon the conversion of our convertible debenture may represent overhang that may also adversely affect the market price of our common stock. Overhang occurs when there is a greater supply of a company's stock in the market than there is demand for that stock. When this happens the price of our stock will decrease, and any additional shares which stockholders attempt to sell in the market will only further decrease the share price. If the share volume of our common stock cannot absorb shares sold by holders of the convertible debenture, then the value of our common stock will likely decrease.

**Our Senior Secured Loan Agreement entered into on May 15, 2025, includes certain negative covenants which may restrict our ability to operate.**

Our Senior Secured Loan Agreement entered into on May 15, 2025, imposes a number of restrictive covenants on the Company and its subsidiaries for so long as any obligations remain outstanding. Without KGPLA's consent, the Company may not incur additional debt other than debt under the loan documents, certain existing debt (including the Secured Convertible Debenture and debt owed to Banco Hipotecario), or unsecured debt incurred after the closing. The Company is also restricted from granting liens on its assets, except for liens under the loan documents, liens in favor of Banco Hipotecario existing on the closing date, or certain permitted tax liens. The Company and its subsidiaries may not merge, consolidate, liquidate, or dissolve except in limited circumstances, and may not engage in businesses other than those conducted on the effective date or reasonably related thereto. The Company is prohibited from disposing of collateral, making voluntary prepayments or amendments with respect to subordinated debt (other than repayment of specified Secured Convertible Debenture), or declaring or paying dividends or other cash distributions on its equity. In addition, the Company may not amend or modify material contracts in a manner adverse to KGPLA without KGPLA's consent. Material contracts are generally those with consideration of $50,000 or more, or otherwise material to the Company's business, operations, financial condition, or prospects. The covenants discussed above and the other covenants set forth in the loan agreement, may restrict our ability to operate our business, result in an event of default under the loan agreement and our outstanding Secured Convertible Debenture, and/or have a negative impact on our cash flows and operations.

**Securities analysts may not cover, or continue to cover, our common stock and this may have a negative impact on the market price of our securities.**

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We currently have no independent analysts that cover our common stock, and if any analysts do cover our common stock, they may discontinue coverage of our common stock at any time. Further, we may not be able to obtain additional research coverage by independent securities and industry analysts. If no independent securities or industry analysts continue coverage of us, the trading price for our common stock could be negatively impacted. If one or more of the analysts who cover us downgrades our common stock, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our stock price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.

**Certain previously registered shares of our common stock are required to be sold at fixed prices until such time as our common stock is quoted on the OTCQX, or the OTCQB, operated by OTC Markets, or listed on any national securities exchange or automated interdealer quotation system, if ever, which may result in our common stock not significantly increasing above those fixed prices and have other negative effects on our common stock.**

The Company has previously obtained effectiveness of two resale registration statements on Form S-1, one which became effective on May 14, 2025, relating to the resale of 34,650,000 shares of common stock by the selling stockholders named therein (the "May 2025 Registration Statement"); and one which became effective on July 2, 2025, relating to the resale of 473,874,346 shares of common stock by the selling stockholders named therein (the "July 2025 Registration Statement"). Until such time as our common stock is quoted on the OTCQB or OTCQX tiers of the OTC Markets, or listed on a national securities exchange or an automated interdealer quotation system (including Nasdaq), if ever, selling stockholders may only sell shares of our common stock under the May 2025 Registration Statement at a fixed price of $0.05 per share and selling stockholders may only sell shares of our common stock under the July 2025 Registration Statement at a fixed price of $0.0493 per share. As a result, such selling stockholders will be unable to sell their shares at market prices above the fixed prices, which could discourage sales activity and reduce overall trading volume in our stock.

This limitation may artificially cap the market price of our common stock and create downward pressure on the trading price, particularly if market participants anticipate future selling activity at the fixed prices. Even if our common stock is trading above the $0.05/$0.0493 fixed sales prices, the continued offering of shares at those prices could result in the market price drifting back toward or remaining near the fixed price until such time as the restrictions are lifted, if ever. This could adversely affect investor perception, limit price appreciation, and impair our ability to raise capital at more favorable valuations.

In addition, the presence of a fixed-price offering could create disincentives for investor participation in the public market, reduce liquidity, and increase volatility. There is also no assurance as to when or if our common stock will be quoted or listed on a higher-tier market, and the longer this restriction remains in place, the greater the potential impact on the trading price and stability of our common stock.

**There is a significant liquidity risk associated with an investment in our common stock.**

The shares of our common stock we may issue in the future and the options, warrants and other convertible securities, we may issue in the future may have an adverse effect on the market price of our common stock and cause dilution to investors.

We may issue shares of common stock and warrants to purchase shares of common stock pursuant to private offerings and we may issue options to purchase shares of common stock to our executive officers and employees pursuant to their employment agreements. The sale, or even the possibility of sale, of shares pursuant to a separate offering or to executive officers and employees could have an adverse effect on the market price of our common stock or on our ability to obtain future financing.

**There is no guarantee that our common stock will be approved for listing on the Nasdaq Capital Market or that we will be able to comply with Nasdaq's continued listing standards in the future.**

We have applied to list our common stock on the Nasdaq Capital Market under the symbol "ABIT"; however, there can be no assurance that such listing will be approved.

In order to be approved for listing on the Nasdaq Capital Market, we need to meet certain requirements of Nasdaq, including, but not limited to: meeting one of the following tests: (1) $750,000 of pre-tax income (in either the last fiscal year or two of the three most recent years), $5 million of public float, $4 million of stockholders' equity and a minimum bid of $4.00 per share; (2) $15 million of public float (which must be met solely with proceeds from an initial public offering), $5 million of stockholders' equity, a minimum bid price of $4.00 per share price and 2 years of operating history; or (3) a $50 million market cap; $15 million of public float, $4 million of stockholders' equity, and a minimum bid price of $4.00 per share price, plus in each case 300 round lot stockholders and 1,000,000 shares of total public float, with at least half of such required number of round lot stockholders holding unregistered securities with a minimum value of $2,500. As an alternative to the minimum bid price per share of $4.00, a company can meet a minimum closing price of $3.00 per share ($2.00 per share under the listing standard discussed in (3) above) if the company has (i) average annual revenues of $6 million for three years, (ii) net tangible assets of $5 million or (iii) net tangible assets of $2 million and a 3-year operating history. Currently traded companies qualifying under standard (2) above must meet the $50 million market value of listed securities and the applicable bid price requirement for 90 consecutive trading days before applying. We are also required to maintain a majority of independent directors and have an audit committee made up of three independent directors. We do not currently meet Nasdaq's initial listing standards and may not meet such standards in the future.

Even if our common stock is approved for listing on Nasdaq, there can be no assurance any broker will be interested in trading our securities. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. The placement agent is not obligated to make a market in our securities, and even if it does make a market, it can discontinue market making at any time without notice. Neither we nor the placement agent can provide any assurance that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.

Furthermore, there is no guarantee that we will be able to maintain our listing on Nasdaq for any period of time. Among the conditions required for continued listing on Nasdaq, Nasdaq will require us to maintain at least $2.5 million in stockholders' equity, $35 million in market value of listed securities, or $500,000 in net income over the prior two years or two of the prior three years, to have a majority of independent directors, to comply with certain audit committee requirements, and to maintain a stock price over $1.00 per share. Our shareholders' equity may not remain above Nasdaq's $2.5 million minimum, we may not generate over $500,000 of yearly net income moving forward, we may not be able to maintain independent directors, and we may not be able to maintain a stock price over $1.00 per share. Our failure to meet the continued listing standards of Nasdaq may result in our securities being delisted from The Nasdaq Capital Market. Our failure to meet the continued listing standards of Nasdaq may result in our securities being delisted from Nasdaq.

The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. If our common stock is delisted, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB Market, OTCQX Market, OTCID Market or OTC Pink Market, where an investor may find it more difficult to sell our securities or obtain accurate quotations as to the market value of our securities. In the event our common stock is delisted from Nasdaq in the future, we may not be able to list our common stock on another national securities exchange or obtain quotation on an over-the counter quotation system.

**Our common stock is subject to FINRA sales practice requirements that may make them less desirable or accessible by investors or potential investors.**

The U.S. Financial Industry Regulatory Authority ("FINRA") has adopted rules that require a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer before recommending an investment to a customer. Prior to recommending speculative, low-priced securities to non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives, and other information. Pursuant to the interpretation of these rules, FINRA believes that there is a high probability that speculative, low-priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend our common stock to customers which may limit an investor's ability to buy and sell our common stock, have an adverse effect on the market for our common stock, and thereby negatively impact the price of our common stock.

**Our common stock may be subject to dilution.**

We may make future acquisitions or enter financings or other transactions involving the issuance of securities of the Company which may be dilutive to the other shareholders and any new equity securities issued could have rights, preferences, and privileges superior to those of holders of our common stock.

**We have never paid dividends on our common stock and have no plans to do so in the future.**

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. To date, we have paid no cash dividends on our shares of common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have, will be in the form of appreciation, if any, in the market value of their shares of common stock. In addition, the terms of the Senior Secured Loan Agreement related to the Amended and Restated Convertible Debenture dated May 15, 2023 preclude us from paying dividends without the written consent of the lender.

**We may engage in acquisitions, mergers, strategic alliances, joint ventures, and divestures that could result in results that are different than expected.**

In the normal course of business, we engage in discussions relating to acquisitions, equity investments, mergers, strategic alliances, joint ventures, and divestitures. Such transactions are accompanied by a number of risks, including the use of significant amounts of cash, potentially dilutive issuances of equity securities, incurrence of debt on potentially unfavorable terms, accruement of impairment expenses related to goodwill and amortization expenses related to other intangible assets, the possibility that we overpay for an acquisition relative to the economic benefits that we ultimately derive from such acquisition, and various potential difficulties involved in integrating acquired businesses into our operations.

**Our Common Stock is subject to liquidity risks.**

Our Common Stock is quoted on the OTC ID Tier of the OTC Markets under the symbol "ABIT". The high and low sales prices of our common stock over the prior 52 weeks was $0.220 and $0.013, respectively. As of the date of this Report, our Common Stock is quoted on the OTC ID, and it is not otherwise regularly quoted on any other over-the-counter market or exchange.

**The Company and its common stock may be negatively affected if any of the Company's restricted securities are resold without registration or an available exemption from registration requirements under the Securities Act.**

On March 17, 2022, the Company learned that one million shares of its restricted common stock owned by an existing shareholder were transferred by its transfer agent to another party. Such shares were subsequently deposited by a new holder into Depository Trust Company and some portion of said shares (approximately 50%) have been sold on the trading market. Our stock certificates representing restricted shares of common stock carry a legend that states that such shares "have not been registered under the Securities Act of 1933, and may not be sold, transferred, or otherwise disposed unless, in the opinion of counsel satisfactory to the issuer, the transfer qualifies for an exemption from or exemption to the registration provisions thereof." The transfer took place without the Company's knowledge, approval or required authorization. The Company immediately notified the relevant parties to cease any sales of such shares into the public market and has been assured by the new holder that no shares will be sold pending the Company's ongoing investigation. The Company believes that even though it was an unusual event (and the Company took immediate remedial steps to ensure that the resale of such shares was immediately ceased and prevented in the future, including termination of its transfer agent), any future sale of restricted and unregistered securities without registration or an available exemption can expose the Company and its common stock to the number of adverse consequences, including: (i) regulatory scrutiny, investigations, enforcement or other actions, potentially preventing or delaying us from offering our shares or trading our stock, which could negatively impact an investment in our common stock; (ii) decline or volatility of the market price of our common stock as a result of sales of a material number of shares of our common stock in the thinly trading public market, or (iii) securities litigation targeting the Company which could result in substantial costs and which could harm our business.

**<u>General Risk Factors</u>**

**We may engage in acquisitions, mergers, strategic alliances, joint ventures, and divestures that could result in results that are different than expected.**

In the normal course of business, we engage in discussions relating to acquisitions, equity investments, mergers, strategic alliances, joint ventures, and divestitures. Such transactions are accompanied by a number of risks, including the use of significant amounts of cash, potentially dilutive issuances of equity securities, incurrence of debt on potentially unfavorable terms, accruement of impairment expenses related to goodwill and amortization expenses related to other intangible assets, the possibility that we overpay for an acquisition relative to the economic benefits that we ultimately derive from such acquisition, and various potential difficulties involved in integrating acquired businesses into our operations.

**Global economic conditions could materially adversely affect our business, results of operations, financial condition and growth.**

Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect our operations, expenses, access to capital and the market for our ATMs and/or Bitcoin in general. In addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on our expected funding sources, suppliers and partners. A downturn in the economic environment could also lead to limitations on our ability to issue new debt; reduced liquidity; and declines in the fair value of our financial instruments. These and other economic factors could materially adversely affect our business, results of operations, financial condition and growth.

**Regulatory developments and government action on climate change issues may drive medium-to-long term increases in our operational costs.**

Our business operations and financial condition are subject to regulatory developments and government action on climate change. Governments across the world are responding to climate change by adopting ambitious climate policies as public awareness of and concern about climate change continues to grow. Government climate policies include the enactment of circular economy regulations, regulating greenhouse gas ("<u>GHG</u>") emissions, carbon pricing and increasing energy and fuel costs. Increased fuel and energy prices and taxes and pricing of GHG emissions could make it more expensive for us to power our networks and operations and may also result in our being subject to carbon emission taxation directly for our limited carbon emissions as a telecommunications operator, which would drive medium-to-long term increases in our operational costs. In addition, there are initial capital costs that we will have to incur as we transition towards the use of renewable energy across our operations.

There could also be medium-to-long term increases in our operational costs due to changing levels of precipitation, increased severity and frequency of storms and other weather events, extreme temperatures and rising sea levels, which could cause potential damage to vital infrastructure and utilities. Increased risk of flooding to low-lying facilities and infrastructure due to longer-term increases in precipitation patterns could increase operating costs to maintain and/or repair facilities and network equipment. Decreased precipitation and rising and extreme temperatures could generate drought conditions that could create an increased burden to local power and water resources, which are required to operate our cooling infrastructure. In addition, these climate change impacts could also result in drops in productivity or increased operational costs for our vendors, which, in turn, may be passed on to us, which could harm our business, financial condition, results of operations, cash flows or prospects.

**Our business could be adversely affected by security threats, including cybersecurity threats.**

We face various security threats, including cybersecurity threats to gain unauthorized access to our sensitive information, to seek initiation of unauthorized fund transfers, or to render our information or systems unusable, and threats to the security of our facilities and infrastructure or third-party facilities and infrastructure. The potential for such security threats subjects our operations to increased risks that could have a material adverse effect on our business, financial condition and results of operations.

Our implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for our information, systems, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to our business and operations, as well as data corruption, reputational damage, communication interruptions or other disruptions to our operations, which, in turn, could have a material adverse effect on our business, financial position and results of operations.

**Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our previously filed financial statements, which could cause our stock price to decline.**

We prepare our consolidated financial statements in accordance with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

***Recent Sales of Unregistered Securities***

There have been no sales of unregistered securities during the quarter ended September 30, 2025, and for the period from October 1, 2025, to the filing date of this Report.

***Purchases of Equity Securities by the Issuer and Affiliated Purchasers***

None.

**Item 3. Defaults upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Rule 10b5-1 Trading Plans.* Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended September 30, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

**Item 6. Exhibits.**

The following exhibits are filed herewith or incorporated by reference herein:

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| | |
|:---|:---|
| **No.** | **Description** |
| 10.1 | [Second Amendment to Development Services Agreement between Athena Bitcoin, Inc. and PSBC, LLC](https://www.sec.gov/Archives/edgar/data/1095146/000168316825004147/abit_ex1001.htm) (Filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the Commission on June 2, 2025, and incorporated herein by reference |
| 10.2\*\*\* | [Athena Bitcoin Global 2025 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1095146/000168316825005005/athena_ex1001.htm) (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on July 10, 2025, and incorporated herein by reference) |
| 10.3♦ | [Release and Termination Agreement dated September 4, 2025, by and between Athena Bitcoin, Inc., Taproot Acquisition Enterprises, LLC, William Mgt LLC, BTML, LLC and PSBC, LLC](https://www.sec.gov/Archives/edgar/data/1095146/000168316825006824/athenabitcoin_ex1001.htm) (Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on September 10, 2025, and incorporated herein by reference) |
| 31.1\* | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act](https://www.sec.gov/Archives/edgar/data/1095146/000168316825008331/athena_ex3101.htm) |
| 31.2\* | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act](https://www.sec.gov/Archives/edgar/data/1095146/000168316825008331/athena_ex3102.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act](https://www.sec.gov/Archives/edgar/data/1095146/000168316825008331/athena_ex3201.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act](https://www.sec.gov/Archives/edgar/data/1095146/000168316825008331/athena_ex3202.htm) |
| 101.INS\* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document\* |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set |

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\* Filed herewith.

\*\* Furnished herewith.

\*\*\* Indicates management contract or compensatory plan or arrangement.

♦ Certain schedules, annexes and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished. Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets ("[\*\*\*]") because the identified confidential portions (i) are not material and (ii) the Company customarily and actually treats that information as private or confidential.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **Athena Bitcoin Global** | **Athena Bitcoin Global** |
| Date: November 13, 2025 | By: | */s/ Matias Goldenhörn* |
|  |  | Matias Goldenhörn<br> Chief Executive Officer<br> (Principal Executive Officer) |

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| | | |
|:---|:---|:---|
| Date: November 13, 2025 | By: | */s/ Omar Jimenez* |
|  |  | Omar Jimenez<br> Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

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