# EDGAR Filing Document

**Accession Number:** 0001001601
**File Stem:** 0001493152-25-021523
**Filing Date:** 2025-11
**Character Count:** 272408
**Document Hash:** 7902bdeee1e6ecc1280ab8b0e79a8459
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-021523.hdr.sgml**: 20251110

**ACCESSION NUMBER**: 0001493152-25-021523

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 70

**CONFORMED PERIOD OF REPORT**: 20241231

**FILED AS OF DATE**: 20251110

**DATE AS OF CHANGE**: 20251110

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MGT CAPITAL INVESTMENTS, INC.
- **CENTRAL INDEX KEY:** 0001001601
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 134148725
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32698
- **FILM NUMBER:** 251466573

**BUSINESS ADDRESS:**
- **STREET 1:** 150 FAYETTEVILLE STREET,
- **STREET 2:** SUITE 1110
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27601
- **BUSINESS PHONE:** (914) 630-7430

**MAIL ADDRESS:**
- **STREET 1:** 150 FAYETTEVILLE STREET,
- **STREET 2:** SUITE 1110
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27601

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MGT CAPITAL INVESTMENTS INC
- **DATE OF NAME CHANGE:** 20070117

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MEDICSIGHT INC
- **DATE OF NAME CHANGE:** 20021113

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HTTP TECHNOLOGY INC
- **DATE OF NAME CHANGE:** 20001016

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**Form 10-K**

**(Mark One)**

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

**For the fiscal year ended: December 31, 2024**

**OR**

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

**For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Commission File Number **001-32698**

**MGT CAPITAL INVESTMENTS, INC.**

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| **Delaware** | **13-4148725** |
| (State or other jurisdiction of <br> incorporation or organization) | (I.R.S. Employer <br> Identification No.) |

---

---

| | |
|:---|:---|
| **540 Montreal Ave, Suite 133, Melbourne, FL** | **32935** |
| (Address of principal executive offices) | (Zip Code) |

---

**(914) 630–7430**

(Registrant's telephone number, including area code)

Securities registered under section 12(b) of the Act:

**Not applicable**

Securities registered under section 12(g) of the Act:

**Common stock, par value $.001 per share**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 requirement 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 registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting 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 checkmark 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. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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 June 28, 2024, the last trading day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the registrant's common stock held by non-affiliates was approximately $521,344.

As of November 7, 2025, the registrant had outstanding 4,340,670,903 shares of common stock, $0.001 par value.

**MGT CAPITAL INVESTMENTS, INC. AND SUBSIDIARY**

**INDEX**

**($ in thousands, except share and per–share amounts)**

---

| | |
|:---|:---|
| [PART I](#a1_001) | 4 |
| [Item 1. Business](#a1_002) | 4 |
| [Item 1A. Risk Factors](#a1_003) | 7 |
| [Item 1B. Unresolved Staff Comments](#a1_004) | 26 |
| [Item 1C. Cybersecurity](#a1_005) | 26 |
| [Item 2. Properties](#a1_006) | 26 |
| [Item 3. Legal Proceedings](#a1_007) | 26 |
| [Item 4. Mine Safety Disclosures](#a1_008) | 26 |
| [PART II](#a1_009) | 27 |
| [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters And Issuer's Purchases Of Equity Securities](#a1_010) | 27 |
| [Item 6. Reserved](#a1_011) | 28 |
| [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](#a1_012) | 28 |
| [Item 7A. Quantitative and Qualitative Disclosure About Market Risk](#a1_013) | 35 |
| [Item 8. Financial Statements and Supplementary Data](#a1_014) | 35 |
| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#a1_015) | 35 |
| [Item 9A. Controls and Procedures](#a1_016) | 35 |
| [Item 9B. Other Information.](#a1_017) | 36 |
| [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#a1_018) | 36 |
| [PART III](#a1_019) | 37 |
| [Item 10. Directors, Executive Officers and Corporate Governance](#a1_020) | 37 |
| [Item 11. Executive Compensation](#a1_021) | 39 |
| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#a1_022) | 40 |
| [Item 13. Certain Relationships and Related Transactions and Director Independence](#a1_023) | 41 |
| [Item 14. Principal Accountant Fees and Services](#a1_024) | 41 |
| [PART IV](#a1_025) | 42 |
| [Item 15. Exhibits and Financial Statement Schedules.](#a1_026) | 42 |
| [Item 16. Form 10–K Summary.](#a1_027) | 44 |
| [SIGNATURES](#a1_028) | 45 |

---

**NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report on Form 10-K and other written and oral statements made from time to time by us may contain forward-looking statements. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "forecasts," "projects," "intends," "estimates," and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Item 1A. Risk Factors" and the risks set out below, any of which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

● Our history of operating losses and the uncertainty of achieving or maintaining profitability;

● The volatility of the cryptocurrency markets and Bitcoin prices;

● Our current lack of active revenue-generating operations and our dependence on identifying and successfully pursuing new business opportunities;

● Risks related to the sale of our Georgia facility and the cessation of our mining and hosting activities;

● Our ability to obtain adequate financing on acceptable terms and in a timely manner to fund operations and strategic initiatives;

● Risks related to our current trading status on the OTC Expert Market, including limited liquidity for our common stock;

● Dilution resulting from the issuance of significant amounts of common stock in connection with financings, conversions, and compensation arrangements;

● Our dependence on the continued service of key management, particularly our Interim Chief Executive Officer and Chief Financial Officer; and

● Regulatory and compliance risks associated with our prior involvement in the digital asset industry and any future strategic initiatives.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Information regarding market and industry statistics contained in this Annual Report on Form 10-K is included based on information available to us that we believe is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. As a result, investors should not place undue reliance on these forward-looking statements.

As used in this annual report, the terms "we", "us", "our", "MGT" and the "Company" mean MGT Capital Investments, Inc. and its subsidiary, unless otherwise indicated.

All dollar amounts set forth in this Annual Report as of and for the year ended December 31, 2024 on this Form 10–K are in thousands, except per–share amounts.

**PART I**

**Item 1. Business**

The Company is a Delaware corporation incorporated in 2000. MGT was originally incorporated in Utah in 1977. MGT's corporate office is in Melbourne, Florida.

**<u>Cryptocurrency Mining Business</u>**

 

*Industry Summary*

 ****

Bitcoin is a world–recognized cryptocurrency, which can be traded and converted into major fiat currencies on cryptocurrency exchanges. Cryptocurrencies are a medium of exchange that are transacted through and recorded on a decentralized distributed ledger system, called the "Blockchain." The Blockchain is built by a chronological addition of transactions, which are grouped into blocks. Each new block requires a mathematical problem to be solved before it can be confirmed and added to the Blockchain. The processing power used to solve these mathematical problems is measured by Hash Rate or Hashes per second ("H/s"). The complexity of these problems, also referred to as mining difficulty, increases with the network's growing Hash Rate.

Bitcoin mining entails solving these complex mathematical problems using custom designed and programmed application-specific integrated circuit ("ASIC") computers (also referred to as "miners"). Bitcoin miners perform a vital function on the Bitcoin Blockchain network, by performing these calculations and adding transaction blocks to the Blockchain ledger. When a miner is successful in adding a block to the Blockchain, it is rewarded with a fixed number of Bitcoin; a miner can also be compensated by network transaction fees.

Additional information about Bitcoin, Blockchain and cryptocurrencies can be found on publicly available educational sources such as <u>www.Bitcoin.org</u>.

*Our Operations*

**<u>Cryptocurrency mining</u>**

As of December 31, 2024, MGT conducted cryptocurrency activities at a company-owned and managed Bitcoin mining facility in LaFayette, Georgia. Located adjacent to a utility substation, the several-acre property has access to about 20 megawatts (MW) of electrical power, half of which is presently utilized by the Company. Business activities are comprised of leasing space to third parties and self-mining operations.

As of December 31, 2024 and November 7, 2025, the Company owned approximately 35 Antminer S19 Pro miners providing about 3 Ph/s in hash power for self-mining. As of December 31, 2024, the Company's mining activity also included the use of approximately 115 third-party owned miners that the Company considered abandoned. We also offered third-party owners of miners a hosting service under which MGT operated and maintained the miners for a fixed monthly fee. MGT's miners and those hosted for others were housed in a modified shipping container on the Company's property in Georgia, which was sold in May 2025. Following the sale, the Company's 35 miners were relocated to storage pending determination of their future use.

The entire facility, including the land and improvements, five 2500 KVA 3-phase transformers, and three mining containers, were owned by MGT. Beginning in April 2023, a single tenant leased the property and electrical infrastructure to use for Bitcoin mining operations. The tenant provided, at its cost, the approximately 2,500 miners and 12 containers used its activities and was responsible for its electricity consumption.

These measures improve utilization of our fixed asset base and better insulate us against the volatility of self- mining Bitcoin. On May 13, 2025, the Company sold its facility in LaFayette, Georgia to CSRE Properties LLC. Note 14 to the Company's financial statements contained herewith includes additional information on the Company's Bitcoin mining and hosting activities.

**<u>Bitcoin And Blockchain Overview</u>**

A Bitcoin is one type of a digital asset that is issued by, and transmitted through, an open source, math-based protocol platform using cryptographic security (the "Bitcoin Network"). The Bitcoin Network is an online, peer-to-peer user network that hosts the public Blockchain transaction ledger and the source code that comprises the basis for the cryptography and math-based protocols governing the Bitcoin Network. No single entity owns or operates the Bitcoin Network, the infrastructure of which is collectively maintained by a decentralized user base. Bitcoin can be used to pay for goods and services or can be converted to fiat currencies, such as the US Dollar, at rates determined on Bitcoin exchanges or in individual peer to peer end-user-to-end-user transactions.

Bitcoins are "stored" or reflected on the Blockchain in a decentralized manner on the computers of each Bitcoin Network user. The Blockchain records the transaction history of all Bitcoin in existence and, through the transparent reporting of transactions, allows the Bitcoin Network to verify the association of each Bitcoin with the digital wallet that owns it. The Bitcoin Network and Bitcoin software programs can interpret the Blockchain to determine the exact Bitcoin balance, if any, of any digital wallet listed in the Blockchain as having taken part in a transaction on the Bitcoin Network.

The Bitcoin Network, being decentralized, does not rely on either governmental authorities or financial institutions to create, transmit or determine the value of Bitcoin. Rather, Bitcoin are created and allocated by the Bitcoin Network protocol through a "mining" process subject to a strict, well-known issuance schedule. The value of Bitcoin is determined by the supply and demand of Bitcoin in the Bitcoin exchange market (and in private peer to peer transactions), as well as the number of merchants that accept it. As Bitcoin transactions can be broadcast to the Bitcoin Network by any user's Bitcoin software and Bitcoin can be transferred without the involvement of intermediaries or third parties, there are only minor transaction costs in direct peer-to-peer transactions on the Bitcoin Network. Third party service providers such as Bitcoin exchanges and third-party payment processing services may charge significant fees for processing transactions and for converting, or facilitating the conversion of, Bitcoin to or from fiat currency.

Miners dedicate substantial resources to mining. Given the increasing difficulty of the target established by the Bitcoin Network, miners must continually invest in expensive mining hardware to achieve adequate processing power to hash at a competitive rate.

Bitcoin is an example of a digital asset that is not a fiat currency (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization) and are not backed by hard assets or other credit. As a result, the value of Bitcoin is determined by the value that various market participants place on Bitcoin through their transactions.

The supply of Bitcoin is finite. Once 21 million Bitcoin are generated, the network will stop producing more. Currently, there are approximately 19.7 million Bitcoin in circulation, or 94% of the total supply of Bitcoin. Within the Bitcoin protocol is an event referred to as Bitcoin halving ("Halving") where the Bitcoin provided upon mining a block is reduced by 50%. Halving's are scheduled to occur once every 210,000 blocks, or roughly every four years, until the maximum supply of 21 million Bitcoin is reached. The latest Halving occurred in April 2024, resulting in a revised reward payout of 3.125 Bitcoin per block.

Given a stable hash rate, a Halving reduces the number of new Bitcoin being generated by the network. While the effect is to limit the supply of new coins, it has no impact on the quantity of total Bitcoin outstanding. As a result, the price of Bitcoin could rise or fall based on overall investor and consumer demand. Should the price of Bitcoin remain unchanged after the next Halving, the Company's revenue from self-mining would be reduced by 50%, with a much larger negative impact to profit.

The cryptocurrency markets have grown rapidly in both popularity and market size. These markets are local, national and international and include an ever-broadening range of products and participants. There have been many documented instances of fraud involving companies engaged in the cryptocurrency industry and the use of cryptocurrencies. The United States Securities and Exchange Commission (the "SEC"), and other governmental agencies around the world, are evaluating the cryptocurrency markets and are likely to institute new rules and regulations within this market to protect investors and such regulations could result in the restriction of the acquisition, ownership, holding, selling, use or trading of our common stock.

**<u>Strategy</u>**

MGT's historical business strategy was to maximize the value of its existing digital asset mining equipment while leveraging the Company's expertise in developing and operating Bitcoin mining and hosting operations. With the sale of its hosting facility in May 2025, MGT has built on its historical foundation as a bitcoin mining company and intends to apply its operational experience to identify and execute ventures that can generate sustainable cash flow and long-term shareholder value, including potential partnerships, equipment redeployment, or other technology-driven initiatives.

**<u>Competition</u>**

As a Bitcoin mining company, our industry was very new and subject to rapid change and constant innovation. We faced significant competition, including from companies that have entered this space earlier than us and are better capitalized, with vertically integrated business models. Some of these companies were also our suppliers. We competed to attract, engage, and retain personnel, educated and skilled in the Blockchain and cryptocurrency mining space.

We competed with vertically integrated companies such as Bitmain that engage in both the design and distribution of mining machines, as well as cryptocurrency mining. We also competed with many other companies that are engaged in cryptocurrency mining, some of which have better access to mining hardware, lower operating expenses and lower cost of capital than MGT. These companies include Riot Platforms, Inc. and Marathon Digital Holdings, Inc.

**<u>Employees</u>**

Currently, the Company has 2 full–time employees. The employees are not represented by a labor union, and the Company believes it maintains good relations with them.

**<u>Government Regulation</u>**

Government regulation of cryptocurrency is being actively considered by the United States federal government via a number of agencies and regulatory bodies, as well as similar entities in other countries. State government regulations also may apply to our activities and other activities in which we participate or may participate in the future. Other regulatory bodies are governmental or semi-governmental and have shown an interest in regulating or investigating companies engaged in the cryptocurrency business.

Businesses that are engaged in the transmission and custody of Bitcoin and other digital assets, including brokers and custodians, can be subject to U.S. Treasury Department regulations as money services businesses as well as state money transmitter licensing requirements. Bitcoin and other digital assets are subject to anti-fraud regulations under federal and state commodity laws, and digital asset derivative instruments are substantively regulated by the U.S. Commodity Futures Trading Commission. Certain jurisdictions, including, among others, New York and a number of countries outside the United States, have developed regulatory requirements specifically for digital assets and companies that transact in them.

Regulations may substantially change in the future, and it is presently not possible to know how regulations will apply to our businesses, or when they will be effective. As the regulatory and legal environment evolves, we may become subject to new laws, further regulation by the SEC and other agencies, which may affect our mining and other activities. For instance, various bills have also been proposed in Congress related to our business, which may be adopted and have an impact on us. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see the Section entitled "Item 1A. Risk Factors" herein.

In addition, since transactions in Bitcoin provide a reasonable degree of pseudo anonymity, they are susceptible to misuse for criminal activities, such as money laundering. This misuse, or the perception of such misuse (even if untrue), could lead to greater regulatory oversight of Bitcoin platforms, and there is the possibility that law enforcement agencies could close Bitcoin platforms or other Bitcoin-related infrastructure with little or no notice and prevent users from accessing or retrieving Bitcoin held via such platforms or infrastructure.

**<u>Available Information</u>**

MGT maintains a website at www.mgtci.com. The Company makes available free of charge our annual reports on Form 10–K, quarterly reports on Form 10–Q and current reports on Form 8–K, including any amendments to the foregoing reports, as soon as is reasonably practicable after such material is electronically filed with, or furnished to, the SEC. These materials along with our Code of Business Conduct and Ethics are also available through our corporate website at www.mgtci.com. The public may also access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports as filed with the SEC under the Securities Exchange Act of 1934, as amended on the SEC's website at http://www.sec.gov. Any amendments to, and waivers of, our Code of Business Conduct and Ethics will be posted on our corporate website. The Company is not incorporating by reference any of the information contained at <u>mgtci.com</u> as a part of this Annual Report.

**Item 1A. Risk Factors**

Discussion of our business and operations included in this Annual Report should be read together with the risk factors set forth below. They describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties, together with other factors described elsewhere in this report, have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner. New risks may emerge at any time, and we cannot predict those risks or estimate the extent to which they may affect our financial performance. Each of the risks described below could adversely impact the value of our securities. These statements, like all statements in this report, speak only as of the date of this Annual Report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments.

The Company generates limited revenue from operations upon which an evaluation of our prospects can be made. The Company's prospects must be considered keeping in mind the risks, expenses and difficulties frequently encountered in the establishment of a new business in a constantly changing industry. There can be no assurance that the Company will be able to achieve profitable operations in the foreseeable future, if at all.

**Summary of Risk Factors**

Our business and an investment in our common stock is subject to numerous risks and uncertainties, including those highlighted in the section immediately following this summary. Some of these risks include:

● We have a history of operating losses, have been and will continue to be reliant on debt and equity financings to fund our operations, and we may not be able to raise capital when needed or otherwise take action necessary to achieve or sustain profitability.

● With the sale of our hosting facility in May 2025, we currently have no active revenue-generating operations, and our future depends on identifying and executing new business opportunities.

● Our auditors have expressed substantial doubt about our ability to continue as a going concern.

● Our historic mining operating costs, including the costs to operate, maintain, repair and replace our mining equipment, have outpaced our mining revenues, which has continued to put a strain on our business or increased our losses.

● We are reliant upon our Interim Chief Executive Officer and Chief Financial Officer, and sole executive officer, the loss of whom could materially harm our ability to continue or grow our operations as planned.

● The Company's internal control of financial reporting has material weaknesses. Due to the small size of the Company, the Company does not maintain sufficient segregation of duties to ensure the processing, review and authorization of all transactions including non-routine transactions.

● The cryptocurrency mining industry is highly competitive, with many of our competitors having better access to capital and may buy mining equipment at scale. The competition has intensified as the price of Bitcoin has appreciated in recent years, which could have a material adverse effect on our results of operations if we are unable to keep up.

● As a Bitcoin miner, our operations and the results thereof were subject to risks arising from Internet disruptions or delays, cybersecurity threats, incorrect digital recording of transactions, and other contingencies resulting from holding and transacting in digital assets. Further, due to current lack of regulation, we may be unable to seek or obtain recourse if such contingencies were to occur.

● The future development and growth of cryptocurrencies such as Bitcoin is subject to a variety of factors that are difficult to predict and evaluate. If the market for Bitcoin does not grow as we expect, our business, operating results, and financial condition could be adversely affected.

● Certain features of Bitcoin's Blockchain, such as "forking" in which one type of Bitcoin could turn into many due to source code variation, or Halving which reduces the rewards for mining efforts by 50% every 210,000 blocks that are solved, pose the risk of adversely affecting our ability to generate revenue.

● Our historical operating results have significantly fluctuated due to the highly volatile nature of Bitcoin prices., Upon redeployment of our current Bitcoin mining assets, if the price of Bitcoin declines, including potentially due to political, economic, or other forces beyond our control, it would materially adversely affect our future business. Our current miner assets are designed primarily to mine Bitcoin and cannot be used to mine other cryptocurrencies, which magnifies the risk.

● Our historical reliance on third party "mining pools," which enabled us to cooperate with other Bitcoin mining enterprises to receive Bitcoin with less variance in probability of reward by sharing Bitcoin earned pro rata based on contribution to a block solved, subjected us to risks of inaccurate sharing of rewards and the loss of other at-will participants in the pool. With a ny future redeployment of our Bitcoin Mining assets and operations we anticipate continuing to rely on these "mining pools" and will be subject to similar risks.

● Highly-publicized instances of fraud and alleged fraud in the cryptocurrency industry in recent years have increased investor distrust of the entire industry and increased the pressure for regulators to enact restrictions. Both of these factors could adversely affect our access to capital and operations.

● We may become subject to an uncertain and rapidly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations, including those imposing restrictions or bans on Bitcoin mining due to concerns about high electrical power usage or noise concerns, could adversely affect our business, operating results, and financial condition.

● The markets for Bitcoin and other cryptocurrencies may be under-regulated and, as a result, the market price of Bitcoin may be subject to significant volatility or manipulation, which could decrease consumer confidence in cryptocurrencies and have a material adverse effect on our business and results of operations.

● Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities, which could have a material adverse effect on us, including restricting the Company's access to capital.

● If a malicious actor or botnet obtains control of the Bitcoin network, such actor or botnet could manipulate the Blockchain to adversely affect us.

● Because cryptocurrencies may be determined to be investment securities, we may inadvertently violate or become subject to the Investment Company Act of 1940 and incur large losses as a result and potentially be required to register as an investment company or terminate operations.

● Our stock price is subject to significant volatility due to a variety of factors, many of which are beyond our control, including its status as a "penny stock," the fact that it is not listed on a national securities exchange, and its potential connection to the price of Bitcoin or other cryptocurrencies, which could adversely affect investors.

● We have not paid cash dividends to our stockholders and do not intend to do so in the foreseeable future.

● Substantial future sales of our common stock by us or our stockholders could have a depressive effect on our stock price. For example, Company has issued convertible debt and warrants that allow the holders to exercise for an indeterminant, and potentially material, number of shares of our common stock on a cashless basis.

**Risks Related to Our Cryptocurrency Mining Business**

***We have a history of operating losses, and we may not be able to achieve or sustain profitability.***

Our primary focus was on our Bitcoin mining operation located at our Lafayette, Georgia facility where, as of December 31, 2024, we operated a total of 35 Antminer S19 Pro miners. We continue to own this mining equipment and are looking for economic opportunities to redeploy these assets and continue Bitcoin mining. The Company's strategy at that time exposed us to the numerous risks and volatility associated within this sector, including due to the high costs of purchasing miners and sourcing power for them, while monitoring the price of Bitcoin, which has historically been volatile. Further, we have experienced recurring losses and negative cash flows from operations. Our net income (loss) for the years ended December 31, 2024 and 2023 were $5,521 and $(6,133), respectively.

To date, we have relied on debt or equity financings to fund our operations, and if the price of Bitcoin is not sufficiently high to enable us to sell the Bitcoin we mine at prices above our cost to mine it, then we are likely to continue to be unable to fund our operations without raising additional capital. Further, even if prices are sufficiently high for our mining activities, we are likely to need to raise additional capital to fund the acquisition of new miners to repair or replace our existing miners and expand our number of miners to be competitive.

We expect to incur additional net losses over the next several years as we seek to redeploy our assets and expand operations. The amount of future losses and when, if ever, we will achieve profitability are uncertain. If we are unsuccessful at executing on our business plan, our business, prospects, and results of operations may be materially adversely affected.

 **

***We currently have no active revenue-generating operations, and our future depends on identifying and executing new business opportunities.***

 **

As of March 2025, we ceased all self-mining operations and the lease with our largest hosting customer expired. In May 2025, we sold our hosting facility; as a result, we currently have no active revenue-generating operations, and our ability to create shareholder value depends on successfully identifying, acquiring, or developing new business opportunities. See Note 14 – Subsequent Events – of the Financial Statements for additional details. The Company is actively pursuing new opportunities including economical deployment of the Bitcoin Mining equipment that it continue to own, but there can be no assurance that we will be able to successfully identify or consummate any such opportunities on acceptable terms, or at all. Until such time, we will rely on our available resources to fund corporate expenses, and we may need to raise additional capital. Failure to secure new operations or additional financing would materially and adversely affect our business, financial condition, and results of operations.

 ****

***Our auditors have issued a "going concern" audit opinion expressing substantial doubt about our ability to continue as a going concern.***

Our independent auditors have indicated in their report on our December 31, 2024 and 2023 financial statements that there is substantial doubt about our ability to continue as a going concern. A "going concern" opinion indicates that the financial statements incorporated in this Annual Report have been prepared assuming that we will continue as a going concern for one year from the date the financial statements are issued and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to shareholders, in the event of liquidation.

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***Our mining operating costs have historically outpaced our mining revenues, which has put a strain on our business or increase our losses.***

During 2024, our mining operations were costly, and expenses often exceeded revenues. These conditions negatively affected our financial performance for the year ended December 31, 2024.

***The cost of obtaining new and replacement miners and parts had historically been highly capital intensive and had an adverse effect on our business and results of operations.***

Our mining operations were only successful when the costs associated with mining Bitcoin, including hardware and electricity, were lower than the price of Bitcoin at the time of sale. Our miners were subject to wear and tear from operation and occasional malfunctions, which required additional capital expenditures to maintain performance.

As mining technology evolved, we periodically evaluated the need to acquire newer models of miners to remain competitive. The price of new miners was often correlated to the market price of Bitcoin, resulting in higher costs during periods of price appreciation. These conditions negatively affected our profitability and cash flow during the year ended December 31, 2024. Following the sale of our mining facility in May 2025, the Company ceased mining operations, and the risks described above no longer apply to current conditions.

Any upgrading we chose to undertake required substantial capital investment, and we often faced challenges in obtaining the necessary funding on favorable or non-dilutive terms. As of December 31, 2024, our ability to acquire new or replacement miners in sufficient quantities and without delay affected our competitiveness within the rapidly evolving Bitcoin mining industry. If we had been unable to secure adequate mining equipment, we could have been less efficient than our competitors or unable to mine Bitcoin profitably, which negatively affected our financial performance during the reporting period.

***Our executive leadership has recently changed, and our business is now highly dependent on the continued services of our sole officer, which presents a significant risk.***

On August 29, 2024, our former Chief Executive Officer and acting Chief Financial Officer, Mr. Robert B. Ladd, resigned from all his positions with the Company. Effective as of July 1, 2024, Jonathan Pfohl became the Company's Chief Financial Officer and Interim Chief Executive Officer. Mr. Pfohl is currently the only officer of the Company. Our success is highly dependent on the continued services of Mr. Pfohl. The loss of his services, or the diversion of his attention from his management duties for any reason, would leave us without executive leadership, which could significantly disrupt our business and growth opportunities. We do not have key man insurance on his life. The market for highly qualified personnel in this industry is very competitive, and we may be unable to attract a suitable replacement in a timely manner, on favorable terms, or at all.

***The Company's directors' and officers' insurance policies have been exhausted and will cause the Company to increase spending on legal expenses.***

The Company has obligations to indemnify current and former directors and employees. We have fully exhausted our directors' and officers' insurance coverage, and additional expenses, including in connection with the recent SEC Action against our former Chief Executive Officer, will be funded by the Company with existing cash resources.

***The Company's internal control of financial reporting has material weaknesses.***

Due to the small size of the Company, the Company does not maintain sufficient segregation of duties to ensure the processing, review and authorization of all transactions including non-routine transactions.

***There are several new and existing competitors in our industry that are purchasing mining equipment at scale, which may cause delays or difficulty in us obtaining new miners, which could materially and adversely affect our business and results of operations.***

Many of the competitors in our industry have also been purchasing mining equipment at scale, which has caused a world-wide shortage of mining equipment and extended the corresponding delivery schedules for new miner purchases. There can be no assurances the mining equipment manufacturers on which we rely such as Bitmain will be able to keep pace with the surge in demand for mining equipment if and when we decide to upgrade and/or expand upon our current miners. Additionally, the supply of the materials used to produce miners, such as the ASIC computer chips that are the primary feature in their computing power, may become subject to shortages, which could also either increase the cost beyond what we can reasonably afford or reduce their availability without unreasonable delay or at all. It is uncertain how manufacturers will respond to these trends and whether they can deliver on the schedules promised to any or all of their customers in the future. In the event Bitmain or other manufacturers are not able to keep pace with demand or avoid supply shortages, we may not be able to purchase miners from Bitmain or other manufacturers in sufficient quantities, at reasonable prices or on the delivery schedules that meet our business needs, which could have a material adverse effect on our business and results of operations.

***To the extent that the profit margins of Bitcoin mining operations are not high, operators of Bitcoin mining operations or other participants in the Bitcoin industry are more likely to immediately sell Bitcoins in the market, thereby constraining growth of the price of Bitcoin that could adversely impact us.***

Over the years, Bitcoin mining operations have shifted from individual users mining with computer processors, graphics processing units and first-generation ASIC servers to larger enterprises with newer, more "professionalized" sources of processing power which has been predominantly added by "professionalized" mining operations and resulting demand for more professionalized and powerful miners having faster hash rates. These professionalized mining operations may use proprietary hardware or sophisticated ASIC machines acquired from ASIC manufacturers. Acquiring this specialized hardware at scale requires the investment of significant up-front capital, and mine operators incur significant expenses related to the operation of this hardware at scale, such as the leasing of operating space, which is often done in data centers or warehousing facilities, obtaining and paying for an electricity supply to run the miners and employing technicians to operate the mining facilities.

As a result, these professionalized mining operations are of a greater scale than prior miners and have more defined and regular expenses and liabilities. Because these regular expenses and liabilities require professionalized mining operations to maintain profit margins on the sale of Bitcoin, to the extent the price of Bitcoin declines and such profit margin is constrained, such miners are incentivized to sell Bitcoin earned from mining operations more rapidly than individual miners who in past years were more likely to hold newly mined Bitcoin for longer periods. The immediate selling of newly mined Bitcoin greatly increases the trading volume of Bitcoin, creating downward pressure on the market price of Bitcoin rewards.

The extent to which the value of Bitcoin mined by a professionalized mining operation exceeds the allocable capital and operating costs determines the profit margin of such an operation. A professionalized mining operation may be more likely to sell a higher percentage of its newly mined Bitcoin rapidly if it is operating at a low profit margin and it may partially or completely cease operations if its profit margin is negative. In a low profit margin environment, a higher percentage could be sold more rapidly, thereby potentially depressing Bitcoin prices. Lower Bitcoin prices could result in further tightening of profit margins for professionalized mining operations creating a network effect that may further reduce the price of Bitcoin until mining operations with higher operating costs become unprofitable forcing them to reduce mining power or cease mining operations temporarily.

***We may be unable to raise additional capital needed to grow our business.***

We will likely continue to operate at a loss, at least until our business strategy is implemented, or if Bitcoin or other cryptocurrency prices decline, and we expect to need to raise additional capital to expand our operations and pursue our growth strategies, including potentially the acquisition of new or additional miners, and to respond to competitive pressures or unanticipated working capital requirements. We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect our existing operations. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests, and the per-share value of our common stock could decline. Furthermore, if we engage in additional debt financing, the holders of such debt would have priority over the holders of common stock on order of liquidation preference. We may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions including terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.

***Because our miners were designed specifically to mine Bitcoin, our success during 2024 depended in large part upon the value of Bitcoin, and any sustained decline in its value adversely affected our business and results of operations*.**

Our operating results for the year ended December 31, 2024 were primarily dependent upon the value of Bitcoin, which was the main cryptocurrency we mined. Our revenues were driven by two key factors: (1) the number of Bitcoin rewards successfully mined and (2) the market value of Bitcoin. As a result, our financial performance was subject to fluctuations in Bitcoin's price. Our mining strategy during that period focused solely on producing Bitcoin using ASIC miners that utilized the SHA-256 algorithm. Because these miners could not be repurposed for other cryptocurrencies, such as Ethereum, a significant decline in the value or acceptance of Bitcoin would have had a negative impact on our operations and financial condition.

***Bitcoin is subject to Halving, meaning that the Bitcoin rewarded for solving a block will be reduced in the future and its value may not commensurately adjust to compensate us for such reductions, and the overall supply of Bitcoin is finite.***

Bitcoin is subject to Halving, which is the process by which the Bitcoin reward for solving a block is reduced by 50% every 210,000 blocks that are solved. This means that the amount of Bitcoin we (or any other miner) are rewarded for solving a block in the Blockchain is permanently cut in half. For example, the last Halving occurred in April 2024, resulting in a revised payout of 3.125 Bitcoin per block solved, down from the previous reward rate of 6.25 Bitcoin per block solved. There can be no assurance that the price of Bitcoin will sufficiently increase to justify the increasingly high costs of mining for Bitcoin given the Halving feature. If a corresponding and proportionate increase in the trading price of these cryptocurrencies does not follow these anticipated Halving events, the revenue we earn from our mining operations would see a corresponding decrease, which would have a material adverse effect on our business and operations. To illustrate, even if the price of Bitcoin remains at its price as of today, all other factors being equal (including the same number of miners and a stable hash rate) our revenue would decrease substantially upon the next Halving.

Further, due to the Halving process, unless the underlying code of the Bitcoin Blockchain is altered (which may be unlikely or difficult given its decentralized nature), the supply of Bitcoin is finite. Once 21 million Bitcoin have been generated by virtue of solving blocks in the Blockchain, the network will stop producing more. Currently, there are approximately 19.7 million Bitcoin in circulation representing about 94% of the total supply of Bitcoin under the current source code. For the foregoing reasons, the Halving feature exposes us to inherent uncertainty and reliance upon the historically volatile price of Bitcoin, rendering an investment in us particularly speculative, especially in the long-term. If the price of Bitcoin does not significantly increase in value, your investment could become worthless.

***We were subject to risks associated with our need for significant electrical power and our current Electricity Agreement.***

Our Bitcoin mining operations required significant amounts of electrical power and increases in energy usage or rates directly affected our operating costs. As of December 31, 2024, we operated under a month-to-month electricity arrangement with the City, which created uncertainty regarding future pricing and availability. Any interruption or loss of access to electricity, or any significant increase in rates, could have materially and adversely affected our mining operations and results of operations during the reporting period.

Prolonged power outages or unavailability of electrical power also had the potential to disrupt operations, reduce mining efficiency, or result in the temporary cessation of mining activity, which could have adversely affected our financial performance for the year ended December 31, 2024. Any future redeployment of our Bitcoin Mining assets and operations will be subject to similar risks.

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***Interruptions to internet access could have disrupted our operations, which would adversely affect our business and results of operations.***

Our cryptocurrency mining operations required access to high-speed internet to be successful. If we had lost internet access for a prolonged period, we might have been required to reduce our operations or cease them altogether. A disruption of the Internet would also have affected the use of cryptocurrencies and subsequently the value of our securities. Because our mining activities depended heavily on reliable internet access, any significant disruption could have interrupted network operations and adversely affected the price of Bitcoin and our ability to mine it. Such events could have negatively impacted our business and financial performance during the reporting period. Any future redeployment of our Bitcoin Mining assets and operations will be subject to similar risks.

***Bitcoin has forked multiple times and additional forks may occur in the future which may affect the value of Bitcoin held or mined by the Company.***

To the extent that a significant majority of users and miners on a cryptocurrency network install software that changes the cryptocurrency network or properties of a cryptocurrency, including the irreversibility of transactions and limitations on the mining of new cryptocurrency, the cryptocurrency network would be subject to new protocols and software. However, if less than a significant majority of users and miners on the cryptocurrency network 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" of the network, 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 versions of the cryptocurrency running in parallel, yet lacking interchangeability and necessitating exchange-type transaction to convert currencies between the two forks. Additionally, it may be unclear following a fork which fork represents the original asset and which is the new asset. Different metrics adopted by industry participants to determine which is the original asset include: referring to the wishes of the core developers of a cryptocurrency, Blockchains with the greatest amount of hashing power contributed by miners or validators; or Blockchains with the longest chain. A fork in the network of a particular cryptocurrency could adversely affect an investment in our securities or our ability to operate.

Since August 1, 2017, Bitcoin's Blockchain was forked multiple times creating new types of Bitcoin cryptocurrencies. Each fork has resulted in a new Blockchain being created with a shared history, and a new path forward. The value of the newly created Bitcoin cryptocurrencies that have or may result may or may not have value in the long run and may affect the price of Bitcoin if interest is shifted away from Bitcoin to the newly created digital assets. The value of Bitcoin after the creation of a fork is subject to many factors including the value of the fork product, market reaction to the creation of the fork product, and the occurrence of forks in the future. As such, the value of Bitcoin could be materially reduced if existing and future forks have a negative effect on Bitcoin's value.

***Our mining operations, including the miners, containers, land, and facility in which our equipment was operated, were subject to real estate risks and potential damage for which we were not fully insured.***

As of December 31, 2024, our mining activities were conducted exclusively at our Lafayette, Georgia facility, which housed all of our operations and equipment at a single location. Concentrating operations at one site exposed us to risks inherent in real estate ownership, including potential losses from natural disasters, accidents, or other events that could have caused damage to our facility or equipment.

While we maintained general liability and property insurance, we may have been underinsured for certain risks related to the ownership and operation of this facility. A significant uninsured loss, or damage beyond insured limits, could have negatively affected our financial results during the reporting period.

***Our operations and revenue from the operation of third-party equipment may subject us to legal disputes and liabilities.***

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The Company generated revenue from the operation of abandoned third-party miners after the related hosting agreements expired. The legal status of such equipment as abandoned property is subject to interpretation and may not be enforceable if challenged. The operation of this equipment for our own account could expose us to legal claims from the original owners of the equipment. Any such claim or dispute could result in significant legal costs, divert management's attention, and could have a material adverse effect on our business, financial condition, and results of operations.

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***The Company's reliance on a third-party mining pool service provider for our mining revenue payouts may have a negative impact on the Company's operations.***

Historically, we received Bitcoin mining rewards from our mining activity through a third-party mining pool operator. Mining pools allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. The rewards are distributed by the pool operator, proportionally to our contribution to the pool's overall mining power, used to generate each block. Should the pool operator's system suffer downtime due to a cyber-attack, software malfunction or other similar issues, it will negatively impact our ability to mine and receive revenue. Furthermore, we were dependent on the accuracy of the mining pool operator's record keeping to accurately record the total processing power provided to the pool for a given Bitcoin mining application in order to assess the proportion of that total processing power we provided. We had limited means of recourse against the mining pool operator if we determined the proportion of the reward paid out to us by the mining pool operator was incorrect, other than leaving the pool. If we were unable to consistently obtain accurate proportionate rewards from our mining pool operators, we may have experienced reduced reward for our efforts, which would have had an adverse effect on our business and operations. With any future redeployment of our Bitcoin Mining assets and operations we anticipate continuing to rely on these mining pools and will be subject to similar risks.

***There is a possibility of cryptocurrency mining algorithms transitioning to proof of stake validation and other mining related risks, which could make us less competitive and ultimately adversely affect our business and the value of our stock.***

Proof of stake is an alternative method in validating cryptocurrency transactions that is less dependent on the consumption of electricity. Should the algorithm shift from a proof of work validation method to a proof of stake method, mining would likely require less energy, which may render any company that maintains advantages in the current climate (for example, from lower priced electricity, processing, real estate, or hosting) less competitive. We, as a result of our efforts to optimize and improve the efficiency of our Bitcoin mining operations, may be exposed to the risk in the future of losing the relative competitive advantage we may have over some of our competitors as a result, and may be negatively impacted if a switch to proof of stake validation were to occur. This is because we have invested heavily in setting up our facility based on the mining algorithms method of validation. Such events could have a material adverse effect on our ability to continue as a going concern, which could have a material adverse effect on our business, prospects or results of operations, the value of Bitcoin.

***We may be accused of infringing intellectual property rights of third parties.***

We may be subject to legal claims of alleged infringement of the intellectual property rights of third parties. Due to the open-source and constantly evolving nature of our business, we may not always be able to determine that we are using or accessing protected information or software. For example, there could be issued patents of which we are not aware that our activities or the equipment or software we use may infringe. The ready availability of damages, royalties and the potential for injunctive relief has increased the defense litigation costs of patent infringement claims, especially those asserted by third parties whose sole or primary business is to assert such claims. Such claims, even if not meritorious, may result in significant expenditure of financial and managerial resources, and the payment of damages or settlement amounts. Additionally, we may become subject to injunctions prohibiting us from using software or business processes we currently use or may need to use in the future or requiring us to obtain licenses from third parties when such licenses may not be available on financially feasible terms or terms acceptable to us or at all. In addition, we may not be able to obtain on favorable terms, or at all, licenses or other rights with respect to intellectual property we do not own in providing ecommerce services to other businesses and individuals under commercial agreements.

**Risks Related to Our Dependence on Bitcoin**

***The trading price of shares of our common stock may increase or decrease as does the trading price of Bitcoin, which subject investors to pricing risks, including "bubble" type risks, and volatility.***

Because of our dependence on Bitcoin, the trading prices of our common stock may at times be tied to the trading prices of Bitcoin. Specifically, we may experience adverse effects on our stock price when the value of Bitcoin drops. Furthermore, if the market for Bitcoin company stocks or the stock market in general experiences a loss of investor confidence, the trading price of our stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock could be subject to arbitrary pricing factors that are not necessarily associated with traditional factors that influence stock prices or the value of non-cryptocurrency assets such as revenue, cash flows, profitability, growth prospects or business activity since the value and price, as determined by the investing public, may be influenced by uncertain contingencies such as future anticipated adoption or appreciation in value of cryptocurrencies or Blockchains generally, and other factors over which we have little or no influence or control.

Bitcoin and other cryptocurrency market prices, which have historically been volatile and are impacted by a variety of factors (including those discussed below), are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. Furthermore, such prices may be subject to factors such as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions, including those discussed elsewhere in these Risk Factors. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of cryptocurrencies, or our share price, making their market prices more volatile or creating "bubble" type risks for the trading price of Bitcoin.

During the year ended December 31, 2024, the trading price of Bitcoin increased significantly, from a low closing value of approximately $39 per Bitcoin in January 2024, to a high closing value of approximately $107 per Bitcoin in December 2024 as reported by Coindesk.com. Thus far in 2025, the prices of Bitcoin continues to climb, reaching a high of $117 in September 2025. While Bitcoin prices are currently relatively high, there can be no assurances that volatility in the trading price of Bitcoin will not continue in the future, including a potential drop in the price as has occurred in the past. Accordingly, since the trading price of our securities may at times be connected to the trading price of Bitcoin, if the trading price of Bitcoin again experiences a significant decline, we could experience a similar decline in the trading price for shares of our common stock. If this occurs, you may not be able to sell the shares of our common stock which you purchased at or above the price you paid for them or at all. In addition, because our operating results and financial condition are tied to the price of Bitcoin, should that price decline, it would materially adversely affect our operating results and financial condition.

***The markets for Bitcoin and other cryptocurrencies and the existing markets may be under regulated and, as a result, the market price of Bitcoin may be subject to significant volatility or manipulation, which could decrease consumer confidence in cryptocurrencies and have a materially adverse effect on our business and results of operations.***

Cryptocurrencies that are represented and trade on a ledger-based platform and those who hold them may not enjoy the same benefits as traditional securities available on trading markets and their investors. Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules, and monitor investors transacting on such platforms for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform's controls and other policies. The more lax a distributed ledger platform is about vetting issuers of cryptocurrency assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of the ledger due to a control event.

Bitcoin and other cryptocurrency market prices have historically been volatile, are impacted by a variety of factors, and are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms. Furthermore, such prices may be subject to factors such as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions. Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of cryptocurrencies, or our share price, making their market prices more volatile or creating "bubble" type risks for both Bitcoin and shares of our common stock.

These factors may inhibit consumer trust in and market acceptance of cryptocurrencies as a means of exchange which could have a material adverse effect on our business, prospects, or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire.

***The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate.***

The use of cryptocurrencies, including Bitcoin, to, among other things, buy and sell goods and services and complete transactions, is part of a new and rapidly evolving industry that employs cryptocurrency assets based upon a computer-generated mathematical and/or cryptographic protocol. Large-scale acceptance of cryptocurrencies as a means of payment has not, and may never, occur. The growth of this industry in general, and the use of Bitcoin in particular, is subject to a high degree of uncertainty, and the slowing or stopping of the development or acceptance of developing protocols may occur unpredictably. The factors include, but are not limited to:

● the progress of worldwide growth in the adoption and use of Bitcoin and other cryptocurrencies as a medium of exchange;

● governmental and organizational regulation of Bitcoin and other cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar cryptocurrency systems;

● changes in consumer demographics and public tastes and preferences, including as may result from coverage of Bitcoin or other cryptocurrencies by journalists and other sources of information and media;

● the maintenance and development of the open-source software protocol of the network;

● the increased consolidation of contributors to the Bitcoin Blockchain through mining pools and scaling of mining equipment by well-capitalized market participants;

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

● the use of the networks supporting Bitcoin or other cryptocurrencies for developing smart contracts and distributed applications;

● general economic conditions and the regulatory environment relating to Bitcoin and other cryptocurrencies; and

● the impact of regulators focusing on cryptocurrencies and the costs associated with such regulatory oversight.

A decline in the popularity or acceptance of the Bitcoin network could adversely affect an investment in us.

The outcome of these factors could have negative effects on our ability to continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects or operations as well as potentially negative effects on the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire, which would harm investors in our securities.

***Currently, there is relatively small use of Bitcoins 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 us.***

As relatively new products and technologies, Bitcoins and the Bitcoin network have only recently become widely accepted as a means of payment for goods and services by many major retail and commercial outlets, and use of Bitcoins 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 Bitcoins. A lack of expansion by Bitcoins into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the price of Bitcoin, either of which could adversely impact an investment in us.

***Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities.***

A number of companies that engage in Bitcoin and/or other cryptocurrency-related activities have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions in response to government action, including in China, where regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China. Government action in the U.S. involving cryptocurrencies and related activities may cause this trend to expand in the U.S. We also may be unable to obtain or maintain these services for our business as a result of these trends, which may also adversely impact the price of Bitcoin. The difficulty that many businesses that provide Bitcoin and/or derivatives on other cryptocurrency-related activities have and may continue to have in finding banks and financial institutions willing to provide them services may be decreasing the usefulness of cryptocurrencies as a payment system and harming public perception of cryptocurrencies, and could decrease their usefulness and harm their public perception in the future.

As an example of adverse events affecting the crypto landscape, in November 2023 Binance, the world's largest crypto exchange, undertook to exit the U.S. and paid a $4.4 billion fine to settle charges by the U.S. Department of Justice, Treasury and the Commodity Futures Trading Commission that the exchange violated sanctions and facilitated human and narcotics trafficking. Further, in March 2023 two large financial institutions in the U.S., Silicon Valley Bank and Signature Bank, which both serviced customers involved with crypto assets, collapsed as continued negative economic prospects and failures to obtain payment from borrowers, together with a large number of withdrawals, caused these banks to encounter substantial financial difficulty leading up to their failures. In response to these events, the Federal Deposit Insurance Corporation ("FDIC") transferred all the deposits, both insured and uninsured, of these banks to corresponding "bridge banks" operated by the FDIC as it markets the institution to potential bidders. The impact of these developments on the Company and on the crypto asset industry and the economy in general, and whether and to what extent they signal a continuing trend impacting the industry and potentially our business, remain unclear.

The usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if crypto exchanges and other industry participants exit the U.S. markets and if banks or financial institutions were to close the accounts of businesses engaging in Bitcoin and/or other cryptocurrency-related activities. This could occur as a result of compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms, national stock and derivatives on commodities exchanges, the over-the-counter market, and the Depository Trust Company, which, if any of such entities adopts or implements similar policies, rules or regulations, could negatively affect our relationships with financial institutions and impede our ability to convert cryptocurrencies to fiat currencies. Such factors could have a material adverse effect on our ability to continue as a going concern or to monetize our mining efforts, which could have a material adverse effect on our business, prospects or operations and harm investors.

***Political or economic crises may motivate large-scale sales of cryptocurrencies, which could result in a reduction in values of cryptocurrencies such as Bitcoin and adversely affect an investment in us.***

Geopolitical crises may motivate large-scale sales of cryptocurrencies, which could rapidly decrease the price of cryptocurrencies such as Bitcoin. Alternatively, as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage investment in cryptocurrencies as investors focus their investment on less volatile asset classes as a means of hedging their investment risk.

As an alternative to fiat currencies that are backed by central governments, cryptocurrencies such as Bitcoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of cryptocurrencies either globally or locally. Large-scale sales of cryptocurrencies would result in a reduction in digital asset values and could adversely affect an investment in us.

***The decentralized nature of cryptocurrency systems may lead to slow or inadequate responses to crises, which may negatively affect our business****.*

The decentralized nature of the governance of cryptocurrency systems may lead to ineffective decision making that slows development or prevents a network from overcoming emergent obstacles. Governance of many cryptocurrency systems is by voluntary consensus and open competition with no clear leadership structure or authority. To the extent lack of clarity in corporate governance of cryptocurrency systems leads to ineffective decision making that slows development and growth of such cryptocurrencies, the value of our common stock may be adversely affected.

***It may be illegal now, or in the future, to acquire, own, hold, sell or use digital assets in one or more countries, and ownership of, holding or trading in our securities may also be considered illegal and subject to sanction.***

As digital assets have grown in both popularity and market size, governments around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as in the U.S., subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. Ongoing and future regulatory actions may impact our ability to continue to operate, and such actions could affect our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations.

***The emergence of competing Blockchain platforms or technologies may harm our business as presently conducted.***

If Blockchain platforms or technologies which compete with Bitcoin and its Blockchain, including competing cryptocurrencies which our miners may not be able to mine, such as cryptocurrencies being developed or may be developed by popular social media platforms, online retailers, or government sponsored cryptocurrencies, consumers may use such alternative platforms or technologies. If that were to occur, we would face difficulty adapting to emergent such digital ledgers, Blockchains, or alternative platforms or digital assets. This may adversely affect us by preventing us from realizing the anticipated profits from our investments and forcing us to expend additional capital in an effort to adapt. Further, to the extent we cannot adapt, be it due to our specialized miners or otherwise, we could be forced to cease operations. Such circumstances would have a material adverse effect on our business, and in turn investors' investments in our securities.

***Cryptocurrencies face significant scaling obstacles that can lead to high fees or slow transaction settlement times.***

Cryptocurrencies face significant scaling obstacles that can lead to high fees or slow transaction settlement times, and attempts to increase the volume of transactions may not be effective. Therefore, scaling cryptocurrencies will be essential to the widespread acceptance of cryptocurrencies as a means of payment, which widespread acceptance is necessary to the continued growth and development of our business. Many cryptocurrency networks face significant scaling challenges, such as limitations on how many transactions can occur per second. There can be no guarantee that any of the systems in place or being considered to increasing the scale of settlement of cryptocurrency transactions will be effective, or how long they will take to become effective, which could adversely affect an investment in our securities.

***The price of cryptocurrencies may be affected by the sale of such cryptocurrencies by other vehicles investing in cryptocurrencies or tracking cryptocurrency markets.***

The global market for cryptocurrency is characterized by supply constraints that differ from those present in the markets for commodities or other assets such as gold and silver. The mathematical protocols under which certain cryptocurrencies are mined permit the creation of a limited, predetermined amount of digital currency, while others have no limit established on total supply. Increased numbers of miners and deployed mining power globally will likely continue to increase the available supply of Bitcoin and other cryptocurrencies, which may depress their market price. Further, large "block sales" involving significant numbers of Bitcoin following appreciation in the market price of Bitcoin may also increase the supply of Bitcoin available on the market, which, without a corresponding increase in demand, may cause its price to fall. Additionally, to the extent that other vehicles investing in cryptocurrencies or tracking cryptocurrency markets form and come to represent a significant proportion of the demand for cryptocurrencies, large redemptions of the securities of those vehicles and the subsequent sale of cryptocurrencies by such vehicles could negatively affect cryptocurrency prices and therefore affect the value of the cryptocurrency inventory we hold. Such events could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine.

***The Bitcoin we mine may be subject to loss, damage, theft or restriction on access.***

There is a risk that some or all of the Bitcoin we mine could be lost or stolen. In general, cryptocurrencies are stored in cryptocurrency sites commonly referred to as "wallets" by holders of cryptocurrencies which may be accessed to exchange a holder's cryptocurrency assets. Access to our Bitcoin could also be restricted by cybercrime (such as a denial of service attack). While we take steps to attempt to secure the Bitcoin we hold, there can be no assurance our efforts to protect our digital assets will be successful.

Hackers or malicious actors may launch attacks to steal, compromise or secure cryptocurrencies, such as by attacking the cryptocurrency network source code, exchange miners, third-party platforms, cold and hot storage locations or software, or by other means. Any of these events may adversely affect our operations and, consequently, our ability to generate revenue and become profitable. The loss or destruction of a private key required to access our digital wallets may be irreversible and we may be denied access for all time to our Bitcoin holdings. Our loss of access to our private keys or our experience of a data loss relating to our digital wallets could adversely affect our business.

Cryptocurrencies are controllable only by the possessor of both the unique public and private keys relating to the local or online digital wallet in which they are held, which wallet's public key or address is reflected in the network's public Blockchain. We are required to publish the public key relating to digital wallets in use when we verify the receipt of transfers and disseminate such information into the network, but we will need to safeguard the private keys relating to such digital wallets. To the extent such private keys are lost, destroyed or otherwise compromised, we will be unable to access our Bitcoin rewards and such private keys may not be capable of being restored by any network. Any loss of private keys relating to digital wallets used to store our mined Bitcoin could have a material adverse effect on our results of operations and ability to continue as a going concern, which could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin we mine.

***Incorrect or fraudulent cryptocurrency transactions may be irreversible.***

Cryptocurrency transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent cryptocurrency transactions, such as a result of a cybersecurity breach against our Bitcoin holdings, could adversely affect our investments and assets. This is because cryptocurrency transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the cryptocurrencies from the transaction. Once a transaction has been verified and recorded in a block that is added to a Blockchain, an incorrect transfer of a cryptocurrency or a theft thereof generally will not be reversible and we may not have sufficient recourse to recover our losses from any such transfer or theft. Further, it is possible that, through computer or human error, or through theft or criminal action, our cryptocurrency rewards could be transferred in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. If an errant or fraudulent transaction in our Bitcoin were to occur, we would have very limited means of seeking to reverse the transaction or seek recourse. To the extent that we are unable to recover our losses from such action, error or theft, such events could have a material adverse effect on our business.

***Security threats to us could result in a loss of Company's Bitcoin holdings.***

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the Bitcoin exchange market since the launch of the Bitcoin network. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm our business operations or result in loss of our Bitcoin and lost revenue. Furthermore, we believe that to the extent we hold greater amounts of Bitcoin, we may become a more appealing target for security threats such as hackers and malware.

The security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee of ours, or otherwise, and, as a result, an unauthorized party may obtain access to our, private keys, data or Bitcoins. Additionally, outside parties may attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of our security system could be harmed, which could adversely affect an investment in us. In the event of a security breach, we may be forced to cease operations, or suffer a reduction in our digital assets, the occurrence of each of which could adversely affect an investment in us.

 ****

***If a malicious actor or botnet obtains control of more than 50% of the processing power on a cryptocurrency network, such actor or botnet could manipulate Blockchains to adversely affect us, which would adversely affect an investment in us or our ability to operate.***

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 processing power dedicated to mining a cryptocurrency, it may be able to alter Blockchains on which transactions of cryptocurrency reside and rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. The malicious actor or botnet could control, exclude or modify the ordering of transactions, though it could not generate new units or transactions using such control. The malicious actor could "double-spend" its own cryptocurrency (i.e., spend the same Bitcoin in more than one transaction) and prevent the confirmation of other users' transactions for as long as it maintained control. To the extent that such malicious actor or botnet does not yield its control of the processing power on the network or the cryptocurrency community does not reject the fraudulent blocks as malicious, reversing any changes made to Blockchains may not be possible. The foregoing description is not the only means by which the entirety of Blockchains or cryptocurrencies may be compromised but is only an example.

Although there are no known reports of malicious activity or control of Blockchains achieved through controlling over 50% of the processing power on the network, it is believed that certain mining pools may have exceeded the 50% threshold in Bitcoin. The possible crossing of the 50% threshold indicates a greater risk that a single mining pool could exert authority over the validation of Bitcoin transactions. To the extent that the Bitcoin community, and the administrators of mining pools, do not act to ensure greater decentralization of Bitcoin mining processing power, the feasibility of a botnet or malicious actor obtaining control of the Blockchain's processing power will increase, because such botnet or malicious actor could more readily infiltrate and seize control over the Blockchain by compromising a single mining pool, if the mining pool compromises more than 50% of the mining power on the Blockchain, than it could if the mining pool had a smaller share of the Blockchain's total hashing power. Conversely, if the Blockchain remains decentralized it is inherently more difficult for the botnet or malicious actor to aggregate enough processing power to gain control of the Blockchain. If this were to occur, the public may lose confidence in the Bitcoin Blockchain, and Blockchain technology more generally. This would likely have a material and adverse effect on the price of Bitcoin, which could have a material adverse effect on our business, financial results and operations, and harm investors.

***If the Bitcoin rewards for solving blocks are not sufficiently high, miners may not have adequate incentive to continue mining and may cease mining operations, which may make the Blockchains they support with their mining activity less stable.***

As the number of cryptocurrency rewards awarded for solving a block in a Blockchain decreases, the relative cost of producing a single cryptocurrency will also increase, unless there is a corresponding increase in demand for that cryptocurrency. Even relatively stable demand may not be sufficient to support the costs of mining, because as new miners begin working to solve blocks, the relative amount of energy expended to obtain a cryptocurrency award will tend to increase. This increased energy directly relates to an increased cost of mining, which means an increased cost of obtaining a cryptocurrency award. This increased cost, if not met with a corresponding increase in the market price for the cryptocurrency resulting from increased scarcity and demand, may lead miners, such as us, to conclude they do not have an adequate incentive to continue mining and, therefore, may cease their mining operations. This could in turn reduce the sustainability of the Bitcoin Blockchain, which is dependent upon continued mining to solve the block's algorithms and process transactions in Bitcoin. If this were to occur, this could have a material adverse effect on our business, financial results and operations.

***Cryptocurrencies, including those maintained by or for us, may be exposed to cybersecurity threats and hacks.***

As with any computer code generally, flaws in cryptocurrency codes may be exposed by malicious actors. Several errors and defects have been found previously, including those that disabled some functionality for users and exposed users' information. Exploitations of flaws in the source code that allow malicious actors to take or create money have previously occurred. Despite our efforts and processes to prevent breaches, our devices, as well as our miners, computer systems and those of third parties that we use in our operations, are vulnerable to cyber security risks, including cyber-attacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with our miners and computer systems or those of third parties that we use in our operations. Such events could have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine.

***We have an evolving business model which is subject to various uncertainties.***

As cryptocurrency assets and Blockchain technologies become more widely available, we expect the services and products associated with them to evolve. An example of this is our decision to lease space for a third party cryptocurrency miner to utilize. In order to stay current with the industry, our business model may need to evolve further as well. From time to time, we may modify aspects of our business model relating to our strategy. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to our business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively affect our operating results. Further, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities in this business sector and we may lose out on those opportunities. Such circumstances could have a material adverse effect on our business, prospects or operations.

**Risks Related to Governmental Regulation and Enforcement**

***Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations.***

As cryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies; certain governments have deemed them illegal, and others have allowed their use and trade with no or minimal restriction, while in some jurisdictions, such as in the U.S., cryptocurrencies are subject to extensive, and in some cases overlapping, unclear and evolving regulatory requirements. Ongoing and future regulatory actions could have a material adverse effect on our business, prospects or operations.

***Because cryptocurrencies may be determined to be securities, we may become subject to the Investment Company Act of 1940 and be subject to comprehensive regulatory requirements that we would likely be unable to afford.***

While we do not believe that we are primarily engaged in the business of investing, reinvesting, or trading in securities, nor do we hold ourselves out as being engaged in those activities, we may become subject to the Investment Company Act of 1940 (the "1940 Act") based on our Bitcoin holdings. Under the 1940 Act, an entity may be deemed to be an investment company if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.

As a result of our Bitcoin holdings resulting from our mining activities, to the extent Bitcoin or another cryptocurrency we may hold is determined by the SEC or a state legislator to be a security, our holdings could exceed 40% of our total assets such that we may trigger the threshold described above and become an inadvertent investment company unless we can rely an applicable exemption.

Classification as an investment company under the 1940 Act requires registration with the SEC. Such registration is time consuming, expensive and restrictive and would require a substantial and onerous restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the 1940 Act regime. The cost of such compliance would result in the Company incurring substantial additional expenses, and such costs or the failure to register if required would have a materially adverse impact on our operations.

Despite regulatory developments in this field, some ambiguity persists, as the identification of crypto assets as securities or otherwise can be a complex matter. Notably, the SEC has identified certain crypto assets as securities in the context of ongoing legal actions involving industry participants, such as those involving Ripple, Coinbase, and Binance. The potential for and resolutions of ongoing enforcement actions and legal proceedings are still pending, potentially leaving room for further clarification to be sought regarding uncertainties on the regulatory treatment of specific crypto assets, and government agencies' actions have demonstrated a general skepticism and distrust of certain elements of the industry and those who operate within it. Moreover, based upon decided federal court cases, it appears that the federal courts of appeals, and possibly the U.S. Supreme Court, may ultimately settle unresolved legal issues with respect to the identification of certain crypto assets as securities.

Similarly, in March 2023 the New York Attorney General became the first U.S. regulator to claim in court that Ethereum, one of the major cryptocurrencies, is a security in its lawsuit against KuCoin, a crypto asset exchange. If we become subject to regulatory scrutiny or enforcement actions by securities regulators by virtue of our involvement with cryptocurrencies, it could result in expensive litigation and penalties and cessation of the allegedly noncompliant operations, which would materially adversely harm us, including due to our recent shift of focus to our non-custodial staking-as-a-service business and the costs and efforts deployed towards its development. These or additional developments that may arise underscore the risks in our business, particularly our reliance on and involvement with Bitcoin.

***Current interpretations require the regulation of Bitcoin under the CEA by the CFTC, and we may be required to register and comply with such regulations. Any disruption of our operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.***

Current and future legislation, the Commodity Futures Trading Commission (the "CFTC") and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoin and other cryptocurrencies are treated for classification and clearing purposes. In particular, derivatives on these assets are not excluded from the definition of "commodity future" by the CFTC. We cannot be certain as to how future regulatory developments will impact the treatment of Bitcoin and other cryptocurrencies under the law.

Bitcoins have been deemed to fall within the definition of a commodity and, we may be required to register and comply with additional regulation under the Commodity Exchange Act ("CEA"), including additional periodic report and disclosure standards and requirements. Moreover, we may be required to register as a commodity pool operator and to register us as a commodity pool with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in us. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect an investment in us.

***Our interactions with a Blockchain may expose us to SDN or blocked persons or cause us to violate provisions of law that did not contemplate distributed ledger technology.***

The Office of Financial Assets Control ("OFAC") of the U.S. Department of Treasury requires us to comply with its sanction program and not conduct business with persons named on its specially designated nationals ("SDN") list. However, because of the pseudonymous nature of Blockchain transactions we may inadvertently and without our knowledge engage in transactions with persons named on OFAC's SDN list. Our Company's policy prohibits any transactions with such SDN individuals, but we may not be adequately capable of determining the ultimate identity of the individual with whom we transact with respect to selling cryptocurrency assets. Moreover, federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child pornography. Recent media reports have suggested that persons have imbedded such depictions on one or more Blockchains. Because our business requires us to download and retain one or more Blockchains to effectuate our ongoing business, it is possible that such digital ledgers contain prohibited depictions without our knowledge or consent. To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect the value of our common stock.

***Governmental action against the Blockchain and Bitcoin mining may have a materially adverse effect on the industry, and could affect us if widely adopted.***

We could become subject to regulations aimed at preventing what are perceived as some of the negative attributes of Bitcoin and Bitcoin mining. For example, China imposed bans on cryptocurrencies and related activities in the U.S., the SEC and other governmental authorities have brought legal actions and taken other steps to impose regulations and enforcement proceedings affecting the cryptocurrency industry. This could demonstrate the beginning of a regulatory trend in response to concerns of overconsumption as it relates to environmental impact and energy conservation, under-regulation and risk of illicit activity, and similar action in a jurisdiction in which we operate could have devastating effects to our operations. If further regulation follows, it is possible that our industry may not be able to adjust to a sudden and dramatic overhaul to our ability to deploy energy towards the operation of mining equipment.

Because we are unable to influence or predict future regulatory actions taken by governments, we may face difficulty monitoring and responding to rapid regulatory developments affecting Bitcoin mining, which may have a materially adverse effect on our industry and, therefore, our business and results of operations. If further regulatory action is taken by governments in the United States or elsewhere, our business may be materially harmed.

***We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, and other federal securities laws, including compliance with the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act").***

The costs of preparing and filing annual and quarterly reports and other information with the SEC and furnishing audited reports to shareholders will cause our expenses to be higher than they would have been if we were privately held. It may be time consuming, difficult and costly for us to develop, implement and maintain the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.

***Public company compliance may make it more difficult to attract and retain officers and directors.***

The Sarbanes-Oxley Act and rules implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these rules and regulations to increase our compliance costs and make certain activities more time consuming and costly. The impact of the SEC's July 25, 2017 report on Digital Securities (the "DAO Report") as well as enforcement actions will increase our compliance and legal costs. As a public company, we also expect that these rules and regulations will make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. Accounting and other evolving treatment of cryptocurrencies by the SEC and others could continue to pose challenges and risks to our business, including enhanced disclosure obligations and resulting costs. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.

**Risks Related to Ownership of Our Common Stock**

***Our stock price may be volatile.***

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

● changes in our industry including changes which adversely affect Bitcoin;

● the continued volatility of the price of Bitcoin;

● our ability to obtain working capital financing;

● progress and publications of the commercial acceptance of Bitcoin and other cryptocurrencies;

● additions or departures of key personnel including our executive officers;

● sales of our common stock;

● any public announcement of entering into new agreements and terms thereof;

● conversion of our convertible notes and the subsequent sale of the underlying common stock;

● business disruptions caused by earthquakes, tornadoes or other natural disasters;

● our ability to execute our business plan;

● operating results that fall below expectations;

● loss of any strategic relationship;

● adverse regulatory developments; and

● economic and other external factors.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. As a result, you may be unable to resell your shares at a desired price.

***Economic downturns and market conditions beyond our control could adversely affect our business, financial condition and results of operations.***

We will need to raise additional capital to fund our working capital needs and business plan. Our ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both in general and in the particular industry in which we operate), the national and global economies and the condition of the market for microcap securities. Further, factors such as high inflation, increased central bank interest rates in response, the geopolitical conflict in Ukraine and the Middle East and potential economic downturns including the recession we may be entering combined with investor uncertainties may increase our requirements for capital, particularly if such economic downturn persists for an extended period of time, and may limit or hinder our ability to obtain the funding we require. If the amount of capital we are able to raise from financing activities, together with any revenues we may generate from future operations, is not sufficient to satisfy our capital needs, we may be required to reduce or cease our operations, divest our assets at unattractive prices or obtain financing on unattractive terms. Further, the terms of securities we issue in future capital raising transactions may be more favorable to new investors, and may include liquidation preferences, superior voting rights or the issuance of other derivative securities, which could have a further dilutive effect on or subordinate the rights of existing investors. To the extent we incur indebtedness to raise capital, the terms of such indebtedness may impose restrictive covenants or operational limitations that hinder our business, and would provide the holder(s) with a priority over our stockholders in our assets in the event of a liquidation, if convertible into shares of common stock, would also pose the risk of dilution. If any of the foregoing should happen, our stockholders could lose some or all of their investment.

***We have not paid cash dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.***

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

***Our common stock is deemed a "penny stock," which makes it more difficult for our investors to sell their shares.***

Our common stock is subject to the "penny stock" rules adopted under Section 15(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). The penny stock rules generally apply to companies whose common stock trades at less than $5.00 per share, subject to specific exceptions. Such exceptions include among others any equity security listed on a national securities exchange and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000, if such issuer has been in continuous operation for three years, (ii) net tangible assets of at least $5,000, if such issuer has been in continuous operation for less than three years, or (iii) average annual revenue of at least $6,000 for the last three years. The "penny stock" designation requires any broker-dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our common stock and therefore reduce its liquidity.

Moreover, as a result of apparent regulatory pressure from the SEC and the Financial Industry Regulatory Authority, a growing number of broker-dealers decline to permit investors, or otherwise make it difficult, to purchase and sell "penny stocks." The "penny stock" designation may have a depressive effect upon our common stock price. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. Because our common stock is subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

***Our amended and restated certificate of incorporation allows for our board to create new series of preferred stock without further approval by our shareholders, which could adversely affect the rights of the holders of our common stock.***

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further shareholder approval. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, provide holders of the preferred anti-dilution protection, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock. In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing shareholders.

***Substantial future sales of our common stock by us or by our existing shareholders could cause our stock price to fall.***

Additional equity financings or other share issuances by us, including shares issued in connection with strategic alliances and corporate partnering transactions, and shares issued on the conversion of outstanding notes, could adversely affect the market price of our common stock. Sales by existing shareholders of a large number of shares of our common stock in the public market or the perception that additional sales could occur could cause the market price of our common stock to drop.

***For these reasons and others, an investment in our securities is risky and you should invest only if you can withstand a total loss of, and wide fluctuations in, the value of your investment.***

 ****

**Item 1B. Unresolved Staff Comments**

None.

**Item 1C. Cybersecurity**

Like all companies that utilize technology, we are subject to threats of breaches of our technology systems. To mitigate the threat to our business, we take a comprehensive approach to cybersecurity risk management. Our Board and our management oversee our risk management program, including the management of cybersecurity risks. We have established policies, standards, processes and practices for assessing, identifying, and managing material risks from cybersecurity threats, including those discussed in our Risk Factors. We have devoted resources to implement and maintain security measures to meet regulatory requirements and shareholder expectations, and we intend to continue to make investments to maintain the security of our data and cybersecurity infrastructure. While there can be no guarantee that our policies and procedures will be properly followed in every instance or that those policies and procedures will be effective, we believe that the Company's sustained investment in these efforts and technologies have put the Company in a position to protect against potential compromises, and we do not believe that risks from prior cybersecurity threats have materially affected our business to date. We can provide no assurance that there will not be incidents in the future or that past or future attacks will not materially affect us, including our business strategy, results of operations, or financial condition.

**Item 2. Properties**

Our principal corporate office is located in Melbourne, FL under a month-to-month agreement.

Until May 2025, our operations were conducted at a Bitcoin mining and hosting facility situated on six acres in LaFayette, Georgia, which we acquired in May 2019. On May 13, 2025, we sold this facility. Following the sale, we do not own or lease any material real property and currently operate from our corporate office.

**Item 3. Legal Proceedings**

We are not currently engaged in any material legal proceedings. From time to time, in the normal course of business, we may be subject to legal claims and actions, including matters relating to employment, intellectual property, and other business issues. While we expect to continue incurring legal fees in connection with protecting our intellectual property rights, we are not aware of any pending claims or actions that, if determined adversely, would have a material adverse effect on our results of operations, financial condition, or cash flows.

**Item 4. Mine Safety Disclosures**

None.

**PART II**

**Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer's Purchases of Equity Securities**

**<u>Market Information</u>**

Our common stock is traded on the OTC Expert Market tier of OTC Markets LLC under the symbol "MGTI."

**<u>Holders</u>**

On November 7, 2025, the Company's common stock closed on the OTC Expert Market tier of OTC Markets LLC at $0.0001 per share and there were 377 stockholders of record.

**<u>Dividends</u>**

The Company has never declared or paid cash dividends on its common stock and has no intention of doing so in the foreseeable future.

**<u>Unregistered sales of equity securities</u>**

On January 11, 2024, 30,000,000 shares of common stock were issued for the partial conversion of the December 2023 Note. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

On January 25, 2024, 24,000,000 shares of common stock were issued for the partial conversion of the December 2023 Note. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

On March 6, 2024, 32,000,000 shares of common stock were issued for the partial conversion of the December 2023 Note. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

On April 30, 2024, 40,000,000 shares of common stock were issued for the partial conversion of the December 2023 Note. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

On June 21, 2024, 3,346,420 warrants were exercised on a cashless basis for the issuance of 103,500,000 shares of common stock. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

During the year ended December 31, 2024, the Company issued 62,000,000 shares of common stock to Minerset Farms in accordance with the terms of the property lease agreement. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. In addition, under the property agreement terms, the Company may issue up to 88,000,000 additional shares.

On November 1, 2024, the company exchanged 600,000,000 shares of common stock and 650,000 shares of Series D Preferred Stock for all of the outstanding warrants of the Company to purchase up to 2,043,808,450 shares of common stock held by a lender. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

On November 1, 2024, the company issued 750,000,000 shares of common stock in connection with restructuring its convertible note. In issuing the securities described above, the Company relied upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

**<u>Repurchases of Equity Securities</u>**

None.

**Item 6. Reserved**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

**<u>Overview</u>**

MGT has historically operated in the Bitcoin mining and hosting industry. During the year ended December 31, 2024, our operations consisted primarily of hosting services for third-party miners and self-mining activities at our facility in Georgia. Revenue was derived from hosting fees paid by customers under lease arrangements and from the mining of Bitcoin using the Company's own machines.

As of December 31, 2024, the Company owned 35 Antminer S19 Pro miners providing about 3 Ph/s in hash power for self-mining. At December 31, 2024, the Company's mining activity also included the use of approximately 115 third-party owned miners that the Company considered abandoned. We also offered third-party owners of miners a hosting service whereby MGT operated and maintained the miners for a fixed monthly fee. MGT's miners and those hosted for others were housed in a modified shipping container on the Company's owned property in Georgia.

The Company's business model was dependent upon the economics of digital asset mining, including the price of Bitcoin, electricity costs, and access to competitive hosting arrangements. As of December 31, 2024, we remained focused on optimizing our hosting capacity and managing liquidity while evaluating potential opportunities to expand or reposition our operations.

Since year-end, however, there have been significant changes in our operations and strategic direction. The following "Recent Developments" section summarizes these changes.

**<u>Recent Developments</u>**

Subsequent to December 31, 2024, the Company experienced material changes in its operations and leadership:

● Hosting and Mining Operations – In March 2025, the lease of our largest hosting customer expired, and the Company also ceased its remaining self-mining activities.

● Sale of Facility – In May 2025, the Company completed the sale of its hosting facility located in LaFayette, Georgia.

● Management Changes – In June 2025, Jonathan Pfohl was appointed as Interim Chief Executive Officer and Chief Financial Officer. His mandate includes evaluating strategic alternatives for the Company, resolving SEC reporting compliance, and positioning the Company for future opportunities.

As a result of these developments, the Company does not currently have active revenue-generating operations. Management is engaged in a strategic review process to determine the Company's future business direction and opportunities. In addition, the Company is delayed in its SEC periodic reporting. Management's current priority is to complete and file all outstanding reports to regain reporting compliance.

**<u>Critical accounting policies and estimates</u>**

**<u>Use of estimates and assumptions and critical accounting estimates and assumptions</u>**

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair value of conversion features, valuation of derivative liabilities and the valuation allowance for deferred tax assets. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

**<u>Property and Equipment</u>**

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from one to ten years when placed in service. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

**<u>Revenue recognition</u>**

*<u>Revenue recognition</u>*

*Cryptocurrency mining*

The Company recognizes revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, ("ASC 606"). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

● Variable consideration

● Constraining estimates of variable consideration

● The existence of a significant financing component in the contract

● Noncash consideration

● Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company earns Bitcoin mining revenue from two primary sources: the operation of its owned miners and the operation of third-party owned miners that the Company has concluded are subject to abandonment. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company's enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company's fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as "solving a block") is an output of the Company's ordinary activities. The provision of providing such computing power is the only performance obligation in the Company's agreements with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate accounting treatment for the current year. The Company has completed its evaluation of ASU 2023-08 and determined that the standard is not expected to have a material impact on its financial statements.

*Hosting Revenues*

We received revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $179 and $324 from these sources during the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, two customers accounted for 91% and 99%, respectively of hosting revenue. After a hosting agreement expires, the Company no longer recognizes hosting revenue for the related miners.

**<u>Gain (Loss) on Modification/Extinguishment of Debt</u>**

In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain/loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain/loss. For the year ended December 31, 2024 the Company recorded a gain of $15 from the settlement of debt and extinguishment of convertible debt as non-operating income in the statements of operations.

**<u>Fair Value Measurements and Disclosures</u>**

ASC 820 "Fair Value Measurements and Disclosures" provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

● Level 1 Quoted prices in active markets for identical assets or liabilities.

● Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

● Level 3 Significant unobservable inputs that cannot be corroborated by market data.

As of December 31, 2023, the Company had a Level 3 financial instrument related to the derivative liability related to the conversion feature of convertible debt and the issuance of warrants. This Level 3 financial instrument terminated and expired on November 1, 2024, when the company restructured its outstanding notes and warrants and the Company had no Level 3 financial instruments outstanding at December 31, 2024.

 **<u>Recent accounting pronouncements</u>**

Note 3 to our audited financial statements appearing elsewhere in this report includes Recent Accounting Pronouncements.

**<u>Results of operations</u>**

*<u>Years ended December 31, 2024 and 2023</u>*

*Revenues*

Our revenues for the year ended December 31, 2024 decreased by $77, or 19%, to $322 as compared to $399 for the year ended December 31, 2023.

Our revenue is derived from cryptocurrency mining which totaled $143 during 2024. The increase in revenues compared to the prior year reflects higher Bitcoin production, driven by an overall increase in mining capacity deployed during the year, including the use of additional equipment owned by third-parties that the company considers abandoned. For the year ended December 31, 2024, approximately 62% of our mining revenue was from abandoned equipment. We also receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $179 and $324 from these sources during the years ended December 31, 2024 and 2023, respectively. The decrease in Hosting services revenues is due to $480 of hosting services revenues classified as issuance of equity in respect of the shares issued as per the contract as well as a reduction in hosting customers and billings compared to the prior year.

*Operating Expenses*

Operating expenses for the year ended December 31, 2024 decreased by $386, or 21%, to $1,446 as compared to $1,832 for the year ended December 31, 2023. The decrease in operating expenses was comprised of a decrease in cost of revenues of $81 and decrease in general and administrative expenses of $305.

The decrease in cost of revenues of $81, or 17% to $395 as compared to $476 for the year ended December 31, 2023, was primarily due to a decrease in electricity costs of $15 and depreciation of $66. The decrease in general and administrative expenses of $305, or 22% to $1,051 as compared to $1,356 for the year ended December 31, 2023, was primarily due to a decrease in legal, consulting and payroll expenses.

*Other Income and Expense*

For the year ended December 31, 2024, non–operating income of $6,645 primarily consisted of a gain from the settlement of debt, derivative and warrant liabilities is $7,141, and other income of $6, partially offset by interest expense of $303 and accretion of debt discount of $199.

For the year ended December 31, 2023, non–operating expense of $4,700 primarily consisted of accretion of debt discount of $1,269, a loss on the change in fair value of warrant derivative liabilities of $2,685, a loss on the change in fair value of derivative liability of $249, a loss on settlement of derivative of $302, interest expense of $91, and a loss on lease incentive of $184, partially offset by a gain on sale of property and equipment of $70 and a gain on settlement of debt of $10.

The change from non-operating expense in 2023 to non-operating income in 2024 was primarily due to gains recognized on the change in fair value of warrant and derivative liabilities.

**<u>Liquidity and capital resources</u>**

*Sources of Liquidity*

We have historically financed our business through the sale of debt and equity interests. In September 2022, we raised $1,335 from the sale of a $1,500 Original Issue Discount Secured Convertible Promissory Note (the "Note"). As amended in December 2023, the Note: (i) is convertible into 40% of the Company's outstanding shares of the Company's common stock on the conversion date of the Note on a post-conversion basis, (ii) matures December 31, 2024 and (iii) bears an interest rate of 6% per annum. In addition, upon conversion, the Company issued to the investor three series of warrants of which each of the warrants is exercisable into 60% of the Conversion Shares.

The borrowings under the Note as amended in December 2023, were restructured under an exchange agreement on November 1, 2024 for (i) a new, nonconvertible Secured Exchange Note, in the principal amount of $1,620 with an interest rate of 8% per annum and a maturity date of December 31, 2025 and (ii) 750,000,000 duly authorized, non-assessable unregistered shares of common stock of the Company. Additionally, all of the Company's outstanding the warrants previously issued were exchanged for 600,000,000 common shares and 650,000 shares of the Company's Series D Preferred Stock.

On November 20, 2023, the lender of the Note provided the Company with a non-convertible loan in the amount of $25. The loan bears interest at an annual rate of 12% and the maturity date was November 19, 2024. On March 6, 2024, the lender of the Note provided the Company with a non-convertible loan in the amount of $125. The loan bears interest at an annual rate of 12% and the maturity date is March 5, 2025. On April 30, 2024, the lender of the Note provided the company with a non-convertible loan in the amount of $50. The loan bears interest at an annual rate of 12% and the maturity date is April 30, 2025. On November 1, 2024, the lender consolidated and exchanged such notes, including interest owed for an aggregate outstanding balance of $242. This new promissory note bears interest at an annual rate of 12% and matures on December 31, 2025.

On March 16, 2023, the Company entered into a partnership agreement and a property lease agreement with another cryptocurrency mining company (See Note 10 to the financial statements). Pursuant to this lease agreement (the "Lease Agreement"), the Company agreed to lease Spaces of the Company's six-acre mining facility for rental payments of $5 per Space per month and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, tenant agreed to make an initial deposit of $229 for the initial electricity deployment for five MW. In December 2023, the tenant added an additional space to the total amount of Spaces leased.

Pursuant to the partnership agreement, the Company agreed to issue 500,000 shares of its common stock per month for each rented Space, and to also issue an additional number of shares of common stock annually equal to shares issued during the year under the agreement. During the year ended December 31, 2023, the Company received $345, issued 34 million shares of common stock and reduced the lease liability by $68. During the year ended December 31, 2024, the Company received $400, issued 62 million shares of common stock and reduced the lease liability by $96. Lease payments received under these agreements are treated as sales of equity in the Company's financial statements.

We have incurred significant operating losses since inception and continue to generate losses from operations and as of December 31, 2024 have an accumulated deficit of $426,518. At December 31, 2024, our cash and cash equivalents were $6, and we had a working capital deficit of $3,201.

The Company will need to raise additional capital to fund operating losses. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The issuance of any additional shares of Common Stock, preferred stock or convertible securities could be substantially dilutive to our shareholders. Such factors raise substantial doubt about the Company's ability to sustain operations for at least one year from the issuance of these audited financial statements. The accompanying audited financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The price of Bitcoin is volatile, and fluctuations are expected. Declines in the price of Bitcoin have had a negative impact in our operating results and liquidity and could harm the price of our common stock. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world. Since we record revenues partly based on the price of earned Bitcoin and we may retain such Bitcoin as an asset or as payment for future expenses, the relative value of such revenues may fluctuate, as will the value of any Bitcoin we retain.

The high and low exchange rate per Bitcoin for the year ending December 31, 2024, as reported by Coindesk.com, were approximately $106 and $39 respectively.

*Common Stock Issuances*

During the year ended December 31, 2024, the Company issued 126,000,000 shares of common stock in respect of the partial conversion of the December 2023 Note.

During the year ended December 31, 2024, the Company issued 62,000,000 shares of common stock in respect of the Lease Agreement. On June 21, 2024, 3,346,420 warrants with an embedded conversion feature were exercised on a cashless basis for the issuance of 103,500,000 shares of common stock.

On November 1, 2024, the company exchanged 600,000,000 shares of common stock and 650,000 shares of Series D Preferred Stock for all of the outstanding warrants of the Company to purchase up to 2,043,808,450 shares of common stock held by a lender.

On November 1, 2024, the company issued 750,000,000 shares of common stock in connection with restructuring its convertible note.

 *<u>Debt Financing</u>*

 

On September 12, 2022, the Company entered into a securities purchase agreement, pursuant to which the Company received $1,335 in exchange for the issuance of a secured convertible promissory note (the "September 2022 Note") in the principal amount of $1,500 with an original issue discount of $165. Any time prior to a change of control transaction, the September 2022 Note is convertible into 30% of the outstanding shares of the Company's common stock on the conversion date on a post-conversion basis (the "Conversion Shares"). The September 2022 Note matures December 31, 2024 and bears interest at a rate of 6% per annum. The September 2022 Note provides for customary events of default, the occurrence of which would result in 110% the principal and other accrued amounts outstanding under the September 2022 Note to become immediately due and payable, with the interest rate increasing to 12%. At inception the Company recorded a debt discount of $1,500 and non-cash interest as accretion of debt discount of $5,324. During the year ended December 31, 2023, the Company recorded accretion of debt discount of $1,269. During the year ended December 31, 2024, the Company recorded accretion of debt discount of $199.

On December 19, 2023, the Company exchanged the September 2022 Note for a new note (the "December 2023 Note") with substantially the same terms with the exception of a maturity date of December 31, 2024 and with a conversion feature based on a 40% of the Company's common stock in a fully diluted basis. The Company accounts for liability classified conversion features and warrants at fair value. As all components of the September 2022 Note are accounted for at fair value both before and after the modification, any changes in the fair value was reflected in earnings. The Company analyzed for the cash flows of the plain debt pre and post modification and concluded that the changes in cash flows were less than 10% and hence modification accounting was applied. The Company continues to amortize the debt discount using the effective interest method of the modified debt. The principal balance of the December 2023 Note is $1,579, has a debt discount of $257, and bears interest at a rate of 6% per annum.

On November 1, 2024, the Company exchanged the December 2023 Note for a new note with no conversion features (the "November 2024 Note"), in the principal amount of $1,620 with an annual interest rate of 8%, and a maturity date of December 31, 2025 and 750,000,000 shares of common stock.

On November 20, 2023, the lender of the September 2022 and December 2023 Notes provided the Company with a non-convertible loan in the amount of $25. The loan bears interest at an annual rate of 12% and the maturity date was November 19, 2024. On March 6, 2024, the lender of the September 2022 and December 2023 Notes provided the Company with a non-convertible loan in the amount of $125. The loan bears interest at an annual rate of 12% and the maturity date is March 5, 2025. On April 30, 2024, the lender of the September 2022 and December 2023 Notes provided the company with a non-convertible loan in the amount of $50. The loan bears interest at an annual rate of 12% and the maturity date is April 30, 2025. On November 1, 2024, the lender consolidated and exchanged such notes, including interest owed for an aggregate outstanding balance of $242 ("New Promissory Note"). The New Promissory Note bears interest at an annual rate of 12% and the maturity date is December 31, 2025. During the year ended December 31, 2024, the Company recorded interest expense in the amount of $0.3 with respect to these loans.

During the year ended December 31, 2024, the Company recorded accretion of debt discount of $7 in respect of the December 2023 Note.

 

*<u>Cash Flows</u>*

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| | | |
|:---|:---|:---|
|  | **Year ended** <br> **December 31,** | **Year ended** <br> **December 31,** |
|  | **2024** | **2023** |
| **Cash provided by / (used in)** |  |  |
| Operating activities | $(547) | $(710) |
| Investing activities |  |  |
| Financing activities | 545 | 180 |
| **Net decrease in cash and cash equivalents** | $**(2)** | $**(530)** |

---

 

*<u>Operating activities</u>*

Net cash used in operating activities was $547 for the year ended December 31, 2024 as compared to $710 for the year ended December 31, 2023. The amount in 2024 primarily consisted of net income of $5,521 offset by non-cash adjustments of $(6,507) (including: depreciation expense of $194, interest of $211, gain on settlement of debt of $15, warrant liabilities and derivative liabilities of ($7,126), accretion of debt discount of $199 and decreased by a change in working capital excluding cash of $439. The amount in 2023 primarily consisted of a net loss of $6,133 offset by non-cash charges of $4,869 (including: depreciation expense of $+260, loss on settlement of derivative of $302, amortization of note discount $1,269, loss on the change in fair value of warrant derivative liability of $2,685, loss on lease incentive of $184, and loss on the change in fair value of derivative liability of $249, partially offset by a gain on settlement of debt of $10 and gain on sale of property and equipment of $70), and increased by a change in working capital excluding cash of $554. 

 

*<u>Investing activities</u>*

Net cash used by investing activities was $0 for both years ended December 31, 2024 and 2023.

*<u>Financing activities</u>*

During the year ended December 31, 2024, cash provided by financing activities totaled $545 which includes $420 from the issuance of stock under the lease agreement and $125 from proceeds from loans payable. During the year ended December 31, 2023, cash provided by financing activities totaled $180 which includes $340 from the issuance of stock under the lease agreement, $25 from proceeds from loans payable and $15 from proceeds of related party loans payable, offset by repayment of loan payable of $200.

 

*<u>Off–balance sheet arrangements</u>*

As of December 31, 2024, we had no obligations, assets or liabilities which would be considered off–balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off–balance sheet arrangements.

**Item 7A. Quantitative and Qualitative Disclosure About Market Risk**

The Company is not exposed to market risk related to interest rates on foreign currencies. Inflation, particularly in the price of electricity has materially affected us during the past fiscal year; and we believe that inflation may significantly impact our business in 2025. We do not believe that our business is seasonal in nature.

**Item 8. Financial Statements and Supplementary Data**

See Financial Statements and Schedules attached hereto.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

*Evaluation of Disclosure Controls and Procedures*

We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Interim Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Interim Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2024. Based on this evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective as December 31, 2024, due to the material weaknesses described below

*Limitations on Internal Control over Financial Reporting*

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

*Management's Annual Report on Internal Control over Financial Reporting*

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Interim Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer), we performed a complete documentation of the Company's significant processes and key controls, and conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to the material weaknesses described below.

A material weakness is defined within the Public Company Accounting Oversight Board's Auditing Standard No. 5 as 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. We determined that our internal control of financial reporting had the following material weakness:

● Due to the small size of the Company, the Company does not maintain sufficient segregation of duties to ensure the processing, review and authorization of all transactions including non-routine transactions.

● In addition, the Company used a personal brokerage account/crypto wallet of its then CEO to effect the sales of its mined Bitcoin. These transactions occur approximately monthly and were executed and documented to provide no cost to the Company and no benefit to our then CEO.

This Annual Report on Form 10-K does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting since the Company is a smaller reporting company under the rules of the SEC.

*Changes in Internal Control over Financial Reporting*

During the year ended December 31, 2024, there were no changes in internal control over financial reporting.

**Item 9B. Other Information.** None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.** Not applicable.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Jonathan M. Pfohl | 59 | Interim Chief Executive Officer, Chief Financial Officer |
| Michael G. Onghai | 55 | Chairman of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee Member, Independent Director |

---

Directors are elected based on experience, qualifications and in accordance with the Company's by–laws to serve until the next annual stockholders meeting and until their successors are elected in their stead. Officers are appointed by the Board and hold office until their successors are chosen and qualified, until their death or until they resign or have been removed from office. All corporate officers serve at the discretion of the Board. There are no family relationships between any director or executive officer and any other director or executive officer of the Company.

**Jonathan M. Pfohl** was appointed Chief Financial Officer of the Company on June 1, 2025 and assumed the additional role of Interim Chief Executive Officer in August 2025. Since 2024, Mr. Pfohl, age 59, has served as the principal of VC Partners Group LLC, a CFO advisory service to companies in early-stage growth and later-stage restructuring. From 2018-2024 he served as the CFO of Virtual Currency Partners LLC, a venture capital group. From 2019-2022 he served as CFO of Liquid Financial USA, Inc, an early-stage cryptocurrency exchange. From 2013-2018 he served as CFO of Scio Diamond Technology Corp (OTC:SCIO) He received his BS and MBA from the State University of New York at Buffalo.

**Paul R. Taylor** was appointed Interim Principal Executive Officer and Interim Principal Financial Officer of the Company on September 2, 2024 and served until his resignation in August 2025.

**Robert B. Ladd** served as President, Chief Executive Officer, Acting Chief Financial Officer and Director of the Company until his resignation, effective August 29, 2024. Mr. Ladd's resignation was not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.

**Michael G. Onghai** was appointed a director in May 2012. Mr. Onghai, age 55, has been the CEO of LookSmart (OTC: LKST), since February 2013. He has been the founder and Chairman of AppAddictive, an advertising and social commerce platform since July 2011. Mr. Onghai is the President of Snowy August Management LLC, a special situations fund concentrating on the Asian market, spin–offs and event–driven situations. Mr. Onghai is the founder of Stock Sheet, Inc., and Daily Stocks, Inc. – the web's early providers of financial information and search engine related content for financial information. Mr. Onghai has founded several other internet technology companies for the last two decades. Mr. Onghai is an advisor to several internet incubators and is a panelist who advises FundersClub on which companies to accept for its pioneering venture capital platform. Mr. Onghai has earned his designation as a Chartered Financial Analyst (2006) and holds a B.S. in Electrical Engineering and Computer Science from the University of California, Los Angeles and graduated from the Executive Management Certificate Program in Value Investing (The Heilbrunn Center for Graham & Dodd Investing) Graduate School of Business at Columbia Business School. The Board believes that Mr. Onghai has the experience, qualifications, attributes and skills necessary to serve as a director and chairman of the Audit Committee because of his years of business experience and financial expertise.

**<u>Family Relationships</u>**

There are no family relationships among any of the Company's directors and executive officers.

**<u>Board Role in Risk Oversight</u>**

The Board's primary function is one of oversight. The Board as a whole works with the Company's management team to promote and cultivate a corporate environment that incorporates enterprise-wide risk management into strategy and operations. Management periodically reports to the Board about the identification, assessment and management of critical risks and management's risk mitigation strategies. Each committee of the Board is responsible for the evaluation of elements of risk management based on the committee's expertise and applicable regulatory requirements. In evaluating risk, the Board and its committees consider whether the Company's programs adequately identify material risks in a timely manner and implement appropriately responsive risk management strategies throughout the organization. The audit committee focuses on assessing and mitigating financial risk, including risk related to internal controls, and receives at least quarterly reports from management on identified risk areas. In setting compensation, the compensation committee strives to create incentives that encourage behavior consistent with the Company's business strategy, without encouraging undue risk-taking. The nominating committee considers areas of potential risk within corporate governance and compliance, such as management succession. Each of the committees reports regularly to the Board as a whole as to their findings with respect to the risks they are charged with assessing.

 **<u>Code of Business Conduct and Ethics</u>**

On July 11, 2018, the Board revised the Code of Business Conduct and Ethics which applies to all directors and employees including the Company's principal executive officer, principal financial officer and principal accounting officer or persons performing similar functions. Prior to July 11, 2018, the Company's employees and directors were subject to the previous Code of Ethics adopted by the Board on June 25, 2012.

Copies of the Code of Business Conduct and Ethics can be obtained, without charge by writing to the Corporate Secretary at MGT Capital Investments, Inc., 540 Montreal Ave, Suite 133, Melbourne, FL 32935, or through our corporate website at <u>mgtci.com</u>.

**<u>Insider Trading Policy</u>**

The Company has implemented an Insider Trading Policy applicable to its officers, directors and employees with access to material nonpublic information, as well as such persons' family members, which prohibits such persons from conducting transactions involving the purchase or sale of the Company's securities while in possession of material nonpublic information. A copy of the Company's Insider Trading Policy is filed as Exhibit 19.1 of this Report.

While the granting of options and other equity awards to officers, directors and other employees is not expressly addressed in the Insider Trading Policy described above, the Company follows the same principles set forth in such Policy when granting equity awards, including options, to its officers, directors and other employees with access to material nonpublic information. Generally the Board or Compensation Committee does not approve grants of such awards close in time to the disclosure of material nonpublic information, and does not take material nonpublic information into account when determining the timing and terms of such an award. Further, the Company does not have a policy or practice of timing the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

**<u>Audit Committee and Audit Committee Financial Expert</u>**

On November 25, 2004, the Board established an Audit Committee to carry out its audit functions. At December 31, 2024, the membership of the Audit Committee was Michael Onghai.

The Board has determined that Michael Onghai, an independent director, is the Audit Committee financial expert, as defined in Regulation S–K promulgated under the Exchange Act, serving on its Audit Committee.

**Item 11. Executive Compensation**

**<u>Summary Compensation Table</u>**

The following table summarizes Fiscal Years 2024 and 2023 compensation for services in all capacities of the Company's named executive officers:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Principal Position** | **Year** | **Salary** | **Bonus** | **Stock awards** | **All other compensation** | **Total compensation** |
| Robert B. Ladd | Former President, Chief Executive Officer and Former Acting Chief Financial Officer | 2024 | $170 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; | $170 |
|  |  | 2023 | $255 | $- | $- | $- | $255 |
| Paul R. Taylor | Former Interim Principal Executive Officer and Interim Former Interim Principal Financial Officer | 2024 | $40 | $- | $- | $- | $40 |

---

Mr. Ladd resigned from his positions as President, Chief Executive Officer and Acting Chief Financial Officer effective August 29, 2024. As a result, his compensation for 2024 reflects salary earned.

**<u>Employment Agreements</u>**

*Robert B. Ladd*

On April 1, 2018, the Company entered into an Amended and Restated Executive Employment Agreement (the "Employment Agreement") with Mr. Ladd, which was executed on April 6, 2018 and amended on November 11, 2020.

Mr. Ladd's employment with the Company terminated effective August 29, 2024.

*Paul R. Taylor*

 

On September 2, 2024, the Company entered into an Employment Agreement (the "Taylor Employment Agreement") with Mr. Taylor, which was executed on September 2, 2024. Mr. Taylor is entitled to receive an annual salary in the amount of $10 per calendar month, in arrears, with $5 per month to be accrued.

Mr. Taylor's employment agreement terminated on June 25, 2025.

*Jonathan M. Pfohl*

 

On June 1, 2025, the Company entered into an Employment Agreement (the "Pfohl Employment Agreement") with Mr. Pfohl. The agreement provides for a salary of $5 per month, plus reimbursement of out-of-pocket business expenses. The company or Mr. Pfohl may terminate the agreement on ten (10) business days' notice. On June 25, 2025, Mr. Pfohl was appointed to the additional position of Interim Chief Executive Officer without an amendment to the terms of his employment agreement.

**<u>Outstanding Equity Awards at December 31, 2024</u>**

***Outstanding Stock Awards for Fiscal Years 2024 and 2023***

None

**<u>Director Compensation</u>**

The following table sets forth the compensation of persons who served as a member of our Board of Directors during all of 2024.

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Fees Earned Or**<br> **Paid in Cash** | **Stock**<br> **Awards** | **Total** |
| Michael G. Onghai | $32 | $– $– $| 32 |

---

Directors are reimbursed for their out–of–pocket expenses incurred in connection with the performance of Board duties.

**<u>Independent Director Compensation</u>**

In February 2022, the Company changed its cash compensation policy for independent directors. Each independent director will receive annual compensation of $32, up from $30 previously.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

**<u>Security Ownership of Certain Beneficial Owners</u>**

The following table sets forth certain information regarding beneficial ownership and voting power of the common stock as of November 7, 2025, of:

● each person serving as a director, a nominee for director, or executive officer of the Company;

● all executive officers and directors of the Company as a group; and

● all persons who, to our knowledge, beneficially own more than five percent of the common stock.

"Beneficial ownership" here means direct or indirect voting or investment power over outstanding stock and stock which a person has the right to acquire now or within 60 days after November 7, 2025. See the accompanying footnotes to the tables below for more detailed explanations of the holdings. Except as noted, to our knowledge, the persons named in the tables beneficially own and have sole voting and investment power over all shares listed.

---

| | | |
|:---|:---|:---|
| **Name and Address of Beneficial Owner (1)** | **Amount and <br> Nature of**<br> **Beneficial Ownership** | **Percentage of Class (2)** |
| *Current Directors and Officers:* |  |  |
| Michael G. Onghai | 500586000 | 11.5% |
| Jonathan M. Pfohl | 100000000 | 2.3% |
| All directors and executive officers (2 persons) | 600586000 | 13.8% |
| *5% Owners* |  |  |
| Michael G. Onghai | 500586000 | 11.5% |
| Project Nickel LLC/Grady Kittrell<br> 1310 Cordova Road <br> Fort Lauderdale, FL 33316 | 3720440000 | 66.9% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Unless otherwise noted, the addresses for the above persons are in
 care of the Company at 540 Montreal Ave., Suite 133, Melbourne, FL 32935.

(2) For the Current Directors and Officer the percentage of class is based
 on 4,340,670,903 shares of common stock issued and outstanding as of November 7, 2025. According to Schedule 13G/A file with the SEC
 on September 25, 2025, Project Nickel LLC holdings include (i) 2,500,000,000 shares of Common Stock held directly by Project Nickel,
 and (ii) 200,000 shares of Common Stock held by Grady Kitrell, the Manager of Project Nickel LLC and (iii) 1,220,240,000 shares
 issuable upon conversion of a Secured Convertible Promissory Note dated September 22, 2025 which is convertible at a price of $0.001
 per share. The percentage is calculated based on 5,560,910,903 shares of Common Stock outstanding, which includes 4,340,670,903
 shares of Common Stock outstanding as of November 7, 2025, and 1,220,240,000 shares of Common Stock issuable upon conversion of
 Project Nickel's convertible securities.

**<u>Securities Authorized for Issuance Under Equity Compensation Plans</u>**

The Company does not have any equity compensation plans currently in effect and no securities are authorized or reserved for issuance under any equity compensation arrangements.

**Item 13. Certain Relationships and Related Transactions and Director Independence**

The crypto exchange used by the Company to monetize its self-mined Bitcoin experienced difficulties beginning in early 2023 and was ultimately shut down. The Company was unable to find a suitable replacement given its low transaction frequency and small trade volumes. As a consequence, the Company used a personal brokerage account/crypto wallet of its then CEO to effect the sales of its mined Bitcoin. These transactions occur approximately monthly and are executed and documented to provide no cost to the Company and no benefit to our former CEO. This has been remedied as of October 25, 2024 and the Company now has its own account/crypto wallet.

On August 1, 2023 a former executive loaned the Company $15. The loan bears interest at an annual rate of 4.43%. A maturity date has not yet been set. During the year ended December 31, 2024, the Company recorded $0.7 of interest expense in respect of this loan. In addition, a former executive is owed $45 for his payments made on behalf of the Company.

**<u>Director Independence</u>**

Michael Onghai is considered independent under Section 803A of NYSE MKT rules.

**Item 14. Principal Accountant Fees and Services**

Effective January 5, 2017, RBSM LLP became our current independent auditor. The following is a summary of the fees billed by our independent auditors for professional services rendered for the fiscal years ended December 31, 2024 and 2023.

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** |
| Audit fees | $111 | $118 |
| Tax fees |  |  |
| Audit-related fees |  |  |
| Other fees | – | – |
|  | $**111** | $**118** |

---

Audit fees consist of fees billed for services rendered for the audit of our financial statements and review of our financial statements included in our quarterly reports on Form 10–Q.

Tax fees consist of fees billed for professional services related to the preparation of our U.S. federal and state income tax returns and tax advice.

Audit–related fees consist of fees reasonably related to the performance of the audit or review of the Company's financial statements that are not reported as "Audit Fees."

All other fees consist of fees for other miscellaneous items, including fees related to registrations statements.

All services provided by the Company's independent auditor were approved by the Company's audit committee.

**<u>Pre–Approval Policy of Services Performed by Independent Registered Public Accounting Firm</u>**

The Audit Committee's policy is to pre–approve all audit and non–audit related services, tax services and other services. Pre–approval is generally provided for up to one year, and any pre–approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated the pre–approval authority to its chairperson when expedition of services is necessary. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre–approval and the fees for the services performed to date.

**PART IV**

**Item 15. Exhibits and Financial Statement Schedules.**

**<u>Financial Statements</u>**

The financial statements of the Company for the fiscal years covered by this Annual Report are located on pages F-1 to F-6 of this Annual Report.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Certificate of Amendment to Certificate of Incorporation of MGT Capital Investments, Inc. as filed with the Secretary of State of the State of Delaware on August 27, 2025 (incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on August 28, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000164117225025804/ex3-1.htm) |
| 3.2 | [Amended and Restated Bylaws of MGT Capital Investments, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 30, 2014).](https://www.sec.gov/Archives/edgar/data/1001601/000114420414004846/v366525_ex3-1.htm) |
| 3.3 | [Certificate of Designation of Series D Preferred Stock of MGT Capital Investments, Inc., filed with the Delaware Secretary of State on October 31, 2024 (incorporated by reference to Exhibit 3.1 to the 8-K filed with the SEC on November 4, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224043407/ex3-1.htm) |
| 4.1 | [Certificate of Designation of 12% Series B Preferred Stock of MGT Capital Investments, Inc., filed with the Delaware Secretary of State on January 11, 2019 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on January 14, 2019).](https://www.sec.gov/Archives/edgar/data/1001601/000149315219000600/ex4-1.htm) |
| 4.3 | [Description of MGT Capital Investment, Inc.'s Securities (incorporated by reference to Exhibit 4.3 to the Annual Report on Form 10-K filed with the SEC on March 30, 2020).](https://www.sec.gov/Archives/edgar/data/1001601/000149315220005218/ex4-3.htm) |
| 4.4 | [Secured Exchange Note, by and between MGT Capital Investments, Inc and Project Nickel LLC, dated November 1, 2024 (incorporated by reference to Exhibit 4.1 to the 8-K filed with the SEC on November 4, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224043407/ex4-1.htm) |
| 4.5 | [Secured Convertible Promissory Note by and between MGT Capital Investments, Inc and Project Nickel LLC, dated September 22, 2025. (incorporated by reference to Exhibit 4.1 to the 8-K filed with the SEC on September 25, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000149315225014993/ex4-1.htm) |
| 10.1 | [MGT Capital Investments, Inc. 2016 Equity Incentive Plan (incorporated by reference to Annex B to the Definitive Proxy Statement on Schedule 14A filed with the SEC on August 15, 2016).](https://www.sec.gov/Archives/edgar/data/1001601/000149315216012445/def14a.htm) |
| 10.2 | [Employment Agreement, by and between MGT Capital Investments, Inc. and Robert Ladd, dated as of April 1, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 12, 2018).](https://www.sec.gov/Archives/edgar/data/1001601/000149315218005059/ex10-1.htm) |
| 10.3 | [Amendment to Employment Agreement, dated November 11, 2020, by and between MGT Capital Investments, Inc. and Robert Ladd (incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K filed with the SEC on April 15, 2021).](https://www.sec.gov/Archives/edgar/data/1001601/000149315221008913/ex10-5.htm) |
| 10.4 | [Securities Purchase Agreement dated July 21, 2021, by and between MGT Capital Investments, Inc. and Streeterville Capital, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 27, 2021).](https://www.sec.gov/Archives/edgar/data/1001601/000149315221017867/ex10-1.htm) |
| 10.5 | [Form of Warrant, issued by MGT Capital Investments, Inc. to Streeterville Capital LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on July 27, 2021).](https://www.sec.gov/Archives/edgar/data/1001601/000149315221017867/ex10-2.htm) |

---

10.6 [Exchange Agreement dated September 30, 2021, by and between MGT Capital Investments, Inc. and Bucktown Capital, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 4, 2021).](https://www.sec.gov/Archives/edgar/data/1001601/000149315221024437/ex10-1.htm)

10.7 [Form of Warrant, issued by MGT Capital Investments, Inc. to Bucktown Capital LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on October 4, 2021).](https://www.sec.gov/Archives/edgar/data/1001601/000149315221024437/ex10-2.htm)

10.8 [Securities Purchase Agreement dated August 5, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 11, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222022133/ex10-1.htm)

10.9 [Form of Warrant issued by Company to Investor dated August 5, 2022 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on August 11, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222022133/ex10-2.htm)

10.10 [Securities Purchase Agreement dated August 5, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed with the SEC on August 12, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222022402/ex10-1.htm)

10.11 [Securities Purchase Agreement, dated September 12, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report on form 8-k filed September 14, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222025813/ex10-1.htm)

10.12 [Common Stock Purchase Warrant dated September 12 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed September 14, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222025813/ex4-2.htm)

10.13 [Secured Convertible Promissory Note dated September 12, 2022 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 14, 2022).](https://www.sec.gov/Archives/edgar/data/1001601/000149315222025813/ex4-1.htm)

10.14 [Form of Lease Agreement with Minerset Holdings LLC Exhibit dated March 16, 2023 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 22, 2023).](https://www.sec.gov/Archives/edgar/data/1001601/000149315223008550/ex10-1.htm)

10.15 [Form of Property Lease Agreement with Minerset Farms dated March 16, 2023 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 22, 2023) .](https://www.sec.gov/Archives/edgar/data/1001601/000149315223008550/ex10-2.htm)

10.16 [Secured Convertible Promissory Note (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on December 20, 2023) .](https://www.sec.gov/Archives/edgar/data/1001601/000149315223045519/ex4-1.htm)

10.17 [Exchange Agreement (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on December 20, 2023) .](https://www.sec.gov/Archives/edgar/data/1001601/000149315223045519/ex10-1.htm)

10.18 [Original Issue Discount Note dated March 6, 2024 (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K filed with the SEC on April 16, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224014891/ex10-18.htm)

10.19 [Convertible Note Exchange Agreement, by and between MGT Capital Investments, Inc. and Project Nickel LLC, dated November 1, 2024 (incorporated by reference to Exhibit 10.1 to the 8-K filed with the SEC on November 4, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224043407/ex10-1.htm)

10.20 [Warrant Exchange and Extinguishment Agreement, by and between MGT Capital Investments, Inc. and Project Nickel LLC, dated November 1, 2024 (incorporated by reference to Exhibit 10.2 to the 8-K filed with the SEC on November 4, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224043407/ex10-2.htm)

10.21 [Promissory Note Exchange Agreement, by and between MGT Capital Investments, Inc. and Project Nickel LLC, dated November 1, 2024 (incorporated by reference to Exhibit 10.3 to the 8-K filed with the SEC on November 4, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224043407/ex10-3.htm)

10.22 [Purchase and Sale Agreement, by and between MGT Capital Investments, Inc. and CRSE Properties, LLC, dated May 13, 2025 (incorporated by reference to Exhibit 10.1 to the 8-K filed with the SEC on May 19, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000164117225011455/ex10-1.htm)

---

| | |
|:---|:---|
| 10.23 | [Employment Agreement, by and between MGT Capital Investments, Inc. and Jonathan M. Pfohl, dated June 1, 2025 (incorporated by reference to Exhibit 10.1 to the 8-K filed with the SEC on June 5, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000164117225013698/ex10-1.htm) |
| 10.24 | [Termination of Employment Agreement, by and between MGT Capital Investments, Inc. and Paul Taylor, dated June 25, 2025 (incorporated by reference to Exhibit 10.2 to the 8-K filed with the SEC on July 1, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000164117225017251/ex10-2.htm) |
| 10.25 | [Secured Exchange Note Agreement dated September 22, 2025 (incorporated by reference to Exhibit 10.1 to the 8-K filed with the SEC on September 25, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000149315225014993/ex10-1.htm) |
| 10.26 | [Exchange Agreement with Director dated September 23, 2025 (incorporate by reference to Exhibit 10.2 of 8-K dated September 25, 2025).](https://www.sec.gov/Archives/edgar/data/1001601/000149315225014993/ex10-2.htm) |
| 19.1 | [Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Annual Report on Form 10-K filed with the SEC on April 16, 2024).](https://www.sec.gov/Archives/edgar/data/1001601/000149315224014891/ex19-1.htm) |
| 31 | [Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer and Principal Accounting Officer\*](ex31.htm) |
| 32 | [Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer and Principal Financial Officer\*](ex32.htm) |
| 101.INS | Inline XBRL Instance Document\* |
| 101.SCH | Inline XBRL Taxonomy Extension Schema\* |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document\* |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document\* |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document\* |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document\* |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |

---

\* Filed herewith.

**Item 16. Form 10–K Summary.**

Not applicable.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | MGT CAPITAL INVESTMENTS, INC | MGT CAPITAL INVESTMENTS, INC |
| November 10, 2025 |  |  |
|  | By: | */s/ Jonathan M. Pfohl* |
|  |  | Jonathan M. Pfohl |
|  |  | Interim Chief Executive Officer & Chief Financial Officer |

---

Pursuant to the requirements of the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Jonathan M. Pfohl* | Interim Chief Financial Officer & Chief Financial Officer | November 10, 2025 |
| Jonathan M. Pfohl |  |  |
| */s/ Michael Onghai* | Director | November 10, 2025 |
| Michael Onghai |  |  |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and the Board of Directors of

MGT Capital Investments, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of MGT Capital Investments, Inc. (the Company) as of December 31, 2024 and 2023, the related statements of operations, stockholders' deficit and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statement). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**The Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

---

| |
|:---|
| /s/ RBSM LLP |
| We have served as the Company's auditor since 2017. |
| Las Vegas, Nevada |
| November 10, 2025 |
| PCAOB ID: 587<br>|

---

**PART I – FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**MGT CAPITAL INVESTMENTS, INC.**

**BALANCE SHEETS**

**(Dollars in thousands, except per-share amounts)**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| **Assets** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6 | $8 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 45 | 17 |
| **Total current assets** | 51 | 25 |
| Non-current assets |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 713 | 907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $764 | $932 |
| **Liabilities and Stockholders' Deficit** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $532 | $404 |
| &nbsp;&nbsp;&nbsp;Accounts payable, related party | 45 | 15 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other payables | 473 | 244 |
| &nbsp;&nbsp;&nbsp;Security deposit | 45 | 45 |
| &nbsp;&nbsp;&nbsp;Note payable | 1882 | 25 |
| &nbsp;&nbsp;&nbsp;Note payable, related party | 15 | 15 |
| &nbsp;&nbsp;&nbsp;Convertible note payable, net of discount |  | 1329 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 20 | 96 |
| &nbsp;&nbsp;&nbsp;Warrant derivative liability |  | 4253 |
| &nbsp;&nbsp;&nbsp;Derivative liability |  | 3344 |
| &nbsp;&nbsp;&nbsp;Common stock to be issued | 240 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 3252 | 9770 |
| Non-current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liability long-term | - | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 3252 | 9790 |
| Commitments and Contingencies (Note 10) |  |  |
| **Stockholders' Deficit** |  |  |
| &nbsp;&nbsp;&nbsp;Undesignated preferred stock, $0.001 par value, 8,489,800 shares authorized. No shares issued and outstanding at December 31, 2024 and 2023. |  |  |
| &nbsp;&nbsp;&nbsp;Series B preferred stock, $0.001 par value, 10,000 shares authorized. No shares issued or outstanding at December 31, 2024 and 2023. |  |  |
| &nbsp;&nbsp;&nbsp;Series C convertible preferred stock, $0.001 par value, 200 shares authorized. 0 shares issued and outstanding at December 31, 2024 and 2023, respectively. |  |  |
| &nbsp;&nbsp;&nbsp;Series D convertible preferred stock, $0.001 par value, 1,000,000 shares authorized. 650,000 and 0 shares issued and outstanding at December 31, 2024 and 2023, respectively. | 1 |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value; 2,500,000,000 shares authorized; 2,490,670,903 and 849,170,903 shares issued and outstanding at December 31, 2024 and 2023, respectively. | 2491 | 849 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 421538 | 422332 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (426518) | (432039) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (2488) | (8858) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Stockholders' Deficit** | $764 | $932 |

---

The accompanying notes are an integral part of these financial statements.

**MGT CAPITAL INVESTMENTS, INC.**

**STATEMENTS OF OPERATIONS**

**(Dollars in thousands, except per-share amounts)**

---

| | | |
|:---|:---|:---|
|  | For the years ended December 31, | For the years ended December 31, |
|  | 2024 | 2023 |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp;Bitcoin mining | $143 | $75 |
| &nbsp;&nbsp;&nbsp;Hosting services | 179 | 324 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 322 | 399 |
| **Operating expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 395 | 476 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1051 | 1356 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1446 | 1832 |
| **Operating loss** | (1124) | (1433) |
| **Other non-operating income (expense)** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (303) | (91) |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant derivative liability | 4150 | (2685) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | 2976 | (249) |
| &nbsp;&nbsp;&nbsp;Loss on settlement of derivative |  | (302) |
| &nbsp;&nbsp;&nbsp;Lease incentive loss |  | (184) |
| &nbsp;&nbsp;&nbsp;Accretion of debt discount | (199) | (1269) |
| &nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  | 70 |
| &nbsp;&nbsp;&nbsp;Gain on settlement of debt | 15 | 10 |
| &nbsp;&nbsp;&nbsp;Other income | 6 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-operating income (expense) | 6645 | (4700) |
| &nbsp;&nbsp;&nbsp;**Net income (loss)** | $5521 | $(6133) |
| **Per-share data** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted, net income (loss) per share | $0.00 | $(0.01) |
| &nbsp;&nbsp;&nbsp;Basic and diluted, weighted average number of common shares outstanding | 1278102597 | 761862958 |

---

The accompanying notes are an integral part of these financial statements.

**MGT CAPITAL INVESTMENTS, INC.**

**STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

**(Dollars in thousands, except per-share amounts)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Preferred Stock | Preferred Stock | Common Stock | Common Stock | | | |
|  | Shares | Amount | Shares | Amount | Additional Paid-In<br>Capital | Accumulated<br>Deficit | Total Stockholders'<br>Deficit |
| **Balance at January 1, 2023** | &nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; - | 703770903 | $704 | $421468 | $(425906) | $(3734) |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 91400000 | 91 | 370 |  | 461 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 34000000 | 34 | 374 |  | 408 |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into Common Stock |  |  | 20000000 | 20 | 120 |  | 140 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | $(6133) | $(6133) |
| **Balance at December 31, 2023** | - | $- | 849170903 | $849 | $422332 | $(432039) | $(8858) |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability |  |  | 103500000 | 104 | (41) |  | 63 |
| &nbsp;&nbsp;&nbsp;Issuance of shares in respect of lease agreement |  |  | 62000000 | 62 | 214 |  | 276 |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into Common Stock |  |  | 126000000 | 126 | 287 |  | 413 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock in connection with exchange agreement |  |  | 600000000 | 600 | (571) |  | 29 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock in connection with note exchange agreement |  |  | 750000000 | 750 | (713) |  | 37 |
| &nbsp;&nbsp;&nbsp;Issuance of Preferred Stock in connection with exchange agreement | 650000 | 1 |  |  | 30 |  | 31 |
| &nbsp;&nbsp;&nbsp;Net income | - | - | - | - | - | 5521 | 5521 |
| **Balance at December 31, 2024** | 650000 | $1 | 2490670903 | $2491 | $421538 | $(426518) | $(2488) |

---

The accompanying notes are an integral part of these financial statements.

**MGT CAPITAL INVESTMENTS, INC.**

**STATEMENTS OF CASH FLOWS**

**(Dollars in thousands, except per-share amounts)**

---

| | | |
|:---|:---|:---|
|  | For the Years Ended December 31, | For the Years Ended December 31, |
|  | 2024 | 2023 |
| **Cash Flows From Operating Activities** |  |  |
| Net income (loss) | $5521 | $(6133) |
| &nbsp;&nbsp;&nbsp;**Adjustments to reconcile net loss to net cash used in operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 194 | 260 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | 211 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of property and equipment |  | (70) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant derivative liability | (4150) | 2685 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of derivative liability | (2976) | 249 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on settlement of derivative |  | 302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on lease incentive |  | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accretion of debt discount | 199 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of note discount |  | 1269 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on settlement of debt | 15 | (10) |
| &nbsp;&nbsp;&nbsp;**Change in operating assets and liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (28) | (17) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible digital assets |  | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 163 | 394 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable - related party | 30 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 276 | 129 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liability |  | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit | - | 45 |
| **Net cash used in operating activities** | (547) | (710) |
| **Cash Flows From Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of stock under lease agreement | 420 | 340 |
| &nbsp;&nbsp;&nbsp;Repayment of loan payable |  | (200) |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable, related party |  | 15 |
| &nbsp;&nbsp;&nbsp;Proceeds from loans payable | 125 | 25 |
| **Net cash provided by financing activities** | 545 | 180 |
| Net change in cash and cash equivalents | (2) | (530) |
| Cash and cash equivalents, beginning of year | 8 | 538 |
| Cash and cash equivalents, end of year | $6 | $8 |
| **Supplemental disclosure of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $92 | $28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income tax | $- | $- |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants and extinguishment of related warrant derivative liability | $63 | $461 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock in respect of lease agreement | 276 | - |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock in connection with exchange agreement | 29 | - |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock in connection with note exchange agreement | $37 | $140 |
| &nbsp;&nbsp;&nbsp;Issuance of Preferred Stock in connection with exchange agreement | 31 | - |
| &nbsp;&nbsp;&nbsp;Conversion of convertible note into common stock | $413 | $- |

---

The accompanying notes are an integral part of these financial statements.

**MGT CAPITAL INVESTMENTS, INC.**

**NOTES TO THE FINANCIAL STATEMENTS**

**(Dollars in thousands, except share and per–share amounts)**

**Note 1. Organization and Basis of Presentation**

**<u>Organization and Business</u>**

MGT has historically operated in the Bitcoin mining and hosting industry. During the year ended December 31, 2024, the Company's operations consisted primarily of hosting services for third-party miners and self-mining activities at its facility in Georgia. Revenue was derived from hosting fees paid by customers under lease arrangements and from the mining of Bitcoin using Company-owned machines.

As of December 31, 2024, the Company owned 35 Antminer S19 Pro miners providing approximately 3 Ph/s in hash power for self-mining. The Company's mining activity also included the use of approximately 115 third-party-owned miners that management considered abandoned. The Company offered third-party owners of miners a hosting service whereby MGT operated and maintained miners for a fixed monthly fee. All miners, both Company-owned and hosted, were housed in a modified shipping container on property owned by the Company in Georgia.

The Company's business model was dependent on the economics of digital asset mining, including the price of Bitcoin, electricity costs, and access to competitive hosting arrangements. As of December 31, 2024, management remained focused on optimizing hosting capacity and managing liquidity while evaluating opportunities to expand or reposition operations.

Subsequent to year-end, the Company has experienced significant changes in its operations and leadership, including the expiration of its largest hosting arrangement, the cessation of self-mining activities, the sale of its Georgia facility, and changes in executive management. As a result, the Company currently does not have active revenue-generating operations and is engaged in a strategic review of its business direction. See Note 14 – Subsequent Events for additional detail.

**<u>Basis of presentation</u>**

The accompanying financial statements for the years ended December 31, 2024 and 2023 have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and applicable rules and regulations of the United States Securities and Exchange Commission ("SEC").

**<u>Inflation</u>**

Electricity and other prices are vulnerable to inflation which may increase the Company's mining costs and operating expenses.

**Note 2. Going Concern and Management's Plans**

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2024, the Company had incurred significant operating losses since inception and continues to generate losses from operations. As of December 31, 2024, the Company had an accumulated deficit of $426,518. As of December 31, 2024, MGT's cash and cash equivalents were $6.

Subsequent, to December 31, 2025, the Company has had substantial operational and management changes as detailed in Note 14 – Subsequent Events and will require additional funding to re-establish and grow its operations. New leadership is overseeing strategic and financing initiatives and there can be no assurance however that the Company will be able to raise additional capital when needed to support these efforts, or at terms deemed acceptable, if at all.

Since January 2022, the Company has secured working capital through the issuance of a convertible note, the sale of equity and warrants, the sale of assets and related party notes.

Such factors raise substantial doubt about the Company's ability to sustain operations for at least one year from the issuance of these financial statements. The accompanying financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3. Summary of Significant Accounting Policies**

**<u>Use of estimates and assumptions and critical accounting estimates and assumptions</u>**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair value of warrants issued, the fair value of conversion features, and the valuation allowance for deferred tax assets. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

**<u>Cash and cash equivalents</u>**

The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. The Company's combined accounts were $6 and $8 as of December 31, 2024 and 2023, respectively. Accounts are insured by the FDIC up to $250 per financial institution. The Company has not experienced any losses in such accounts with these financial institutions. As of December 31, 2024 and 2023, the Company had $0 and $0, respectively, in excess over the FDIC insurance limit.

**<u>Accounts Receivable</u>**

Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management's evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. As of December 31, 2024 and December 31, 2023, we did not believe we needed to reserve for any doubtful accounts, respectively.

**<u>Cryptocurrencies</u>**

Cryptocurrencies, (including bitcoin and bitcoin cash) are included in current assets in the accompanying balance sheets. Any cryptocurrencies purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company's revenue recognition policy disclosed in this note.

Cryptocurrencies held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured.

In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

Any purchases of cryptocurrencies by the Company are included within investing activities in the accompanying statements of cash flows, while cryptocurrencies awarded to the Company through its mining activities are included within operating activities on the accompanying statements of cash flows. The sales of cryptocurrencies are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the statements of operations. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting.

Halving – The Bitcoin blockchain and the cryptocurrency reward for solving a block is subject to periodic incremental halving. Halving is a process designed to control the overall supply and reduce the risk of inflation in cryptocurrencies using a Proof-of-Work consensus algorithm. At a predetermined block, the mining reward is cut in half, hence the term "Halving." A Halving for bitcoin occurred in April 2024, with a revised reward payout of 3.125 Bitcoin per block. Many factors influence the price of Bitcoin and potential increases or decreases in prices in advance of or following a future halving is unknown.

The following table presents the activities of digital currencies for the years ended December 31, 2024 and 2023:

---

| | |
|:---|:---|
| **Digital currencies at January 1, 2023** | 11 |
| Additions of digital currencies from mining | 75 |
| Realized loss on sale of digital currencies | 3 |
| Sale of digital currencies | (89) |
| **Digital currencies at December 31, 2023** | $- |
| Additions of digital currencies from mining | 143 |
| Realized loss on sale of digital currencies | 8 |
| Sale of digital currencies | (151) |
| **Digital currencies at December 31, 2024** | $- |

---

**<u>Property and Equipment</u>**

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes over their estimated useful lives, which range from one to ten years when placed in service. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

**<u>Leases</u>**

The Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.

**<u>Derivative Instruments</u>**

Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the "host contract"), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company's statements of operations.

**<u>Impairment of long-lived assets</u>**

Long-lived assets are reviewed for impairment whenever facts or circumstances either internally or externally may suggest that the carrying value of an asset may not be recoverable, should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

**<u>Segment Reporting</u>**

Operating segments are defined as components of an enterprise about which separate financial information is available that are evaluated regularly by management. During 2024, the Company operated in the Digital Currency Blockchain segment with our mining facility located in the United States. The Company also provided hosting services in the United States. The Company had employees only in the United States and viewed its operations as one operating segment, as management reviewed financial information on a consolidated basis when making decisions regarding resource allocations and assessing performance.

**<u>Revenue recognition</u>**

*Cryptocurrency mining*

The Company recognizes revenue under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, ("ASC 606"). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

● Step 1: Identify the contract with the customer

● Step 2: Identify the performance obligations in the contract

● Step 3: Determine the transaction price

● Step 4: Allocate the transaction price to the performance obligations in the contract

● Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

● Variable consideration

● Constraining estimates of variable consideration

● The existence of a significant financing component in the contract

● Noncash consideration

● Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company earns Bitcoin mining revenue from two primary sources: the operation of its owned miners and the operation of third-party owned miners that the Company has concluded are subject to abandonment. The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company's enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the Blockchain. The terms of the agreement provide that neither party can dispute settlement terms after thirty-five days following settlement. The Company's fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin Blockchain (in a process known as "solving a block") is an output of the Company's ordinary activities. The provision of providing such computing power is the only performance obligation in the Company's agreements with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. In 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, prior to the issuance of ASU 2023-08 and management has exercised significant judgment in determining the appropriate accounting treatment for the current year. The Company has completed its evaluation of ASU 2023-08 and determined that the standard is not expected to have a material impact on its financial statements.

*Hosting Revenues*

We receive revenues from third parties renting capacity at our facility and from hosting miners owned by others. The Company recognized $179 and $324 from these sources during the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, two customers accounted for 91% and 99%, respectively of hosting revenue. After a hosting agreement expires, the Company no longer recognizes hosting revenue for the related miners.

**<u>Gain (Loss) on Modification/Extinguishment of Debt</u>**

In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss. For the year ended December 31, 2024 the Company recorded a gain of $15 from the settlement of debt and extinguishment of convertible debt as non-operating income in the statements of operations.

**<u>Income taxes</u>**

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company's assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management's opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

**<u>Income (loss) per share</u>**

Basic income (loss) per share is calculated by dividing net income (loss) applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is calculated by dividing the net income (loss) attributable to common shareholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of unvested restricted shares, convertible debt stock warrants, stock options, convertible debt, warrants, and convertible preferred stock are not reflected in diluted net income (loss) per share because their inclusion would not have resulted in additional dilution, based on the impact of the change in derivative liability and related adjustments to net income for the period.

Accordingly, the computation of diluted loss per share for the year ended December 31, 2023 excludes 1,202,410,574 shares issuable upon the exercise of outstanding warrants and 621,691,357 shares issuable upon the conversion of convertible notes payable. There were no outstanding financial instruments that would result in a dilution as of December 31, 2024.

**<u>Fair Value Measure and Disclosures</u>**

ASC 820 "Fair Value Measurements and Disclosures" provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

● Level 1 Quoted prices in active markets for identical assets or liabilities.

● Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

● Level 3 Significant unobservable inputs that cannot be corroborated by market data.

As of December 31, 2023, the Company had a Level 3 financial instrument related to the derivative liability from the conversion feature of convertible debt and the issuance of warrants. This Level 3 financial instrument terminated and expired on November 1, 2024, when the company restructured its outstanding notes and warrants and the Company had no Level 3 financial instruments outstanding at December 31, 2024.

**<u>Management's evaluation of subsequent events</u>**

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, other than what is described in Note 14 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

**<u>Recent accounting pronouncements</u>**

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements, other than those disclosed below.

In August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06, *"Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815 – 40)"* ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU's amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company adopted ASU 2020-06 effective January 1, 2024. The adoption of this standard did not have a material impact on the Company's financial statements.

On November 27, 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*. ASU 2023-07 enhances segment disclosure requirements for public entities by requiring disclosure of significant segment expenses and other segment items, an explanation of how management uses the measure of segment profit or loss, and interim-period segment disclosures consistent with annual reporting. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 effective January 1, 2024. The adoption did not have a material impact on the Company's financial statements or related disclosures, as the Company operates as a single reportable segment

On December 13, 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. The ASU's amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. The Company has not elected early adoption of ASU 2023-08 and does not anticipate the adoption will have impact on its financial statements.

**Note 4. Accounts Receivable**

Accounts receivable balance of $45 and $17 at December 31, 2024 and 2023, respectively, consisted primarily of receivables in respect of electricity for hosting.

**Note 5. Property and Equipment** 

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of | As of |
|  | December 31, <br>2024 | December 31, <br>2023 |
| Land | $55 | $55 |
| Computer hardware and software | 10 | 10 |
| Bitcoin mining machines | 70 | 70 |
| Infrastructure | 1185 | 1185 |
| Containers | 403 | 403 |
| &nbsp;&nbsp;&nbsp;Property and equipment, gross | 1723 | 1723 |
| Less: Accumulated depreciation | (1010) | (816) |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $713 | $907 |

---

The Company recorded depreciation expense of $194 and $260 for the years ended December 31, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023, the Company recorded gains on sale of property and equipment of $0 and $70, respectively

**Note 6. Notes Payable**

*September 2022 Note*

On September 12, 2022, the Company entered into a securities purchase agreement, pursuant to which the Company received $1,335 in exchange for the issuance of a secured convertible promissory note (the "September 2022 Note") in the principal amount of $1,500 with an original issue discount of $165. Any time prior to a change of control transaction, the September 2022 Note is convertible into 30% of the outstanding shares of the Company's common stock on the conversion date on a post-conversion basis (the "Conversion Shares"). The September 2022 Note matures December 31, 2023 and bears interest at a rate of 6% per annum. The September 2022 Note provides for customary events of default, the occurrence of which would result in 110% the principal and other accrued amounts outstanding under the September 2022 Note to become immediately due and payable, with the interest rate increasing to 12%. On December 19, 2023, the Company exchanged the September 2022 Note for a new note (see below).

At inception the Company recorded a debt discount of $1,500 and non-cash interest as accretion of debt discount of $5,324. There was no accretion of debt discount recorded during the year ended December 31, 2024 in connection with the September 2022 Note. During the year ended December 31, 2023, the Company recorded accretion of debt discount of $1,262.

*December 2023 Note*

On December 19, 2023, the Company exchanged the September 2022 Note for a new note (the "December 2023 Note") with substantially the same terms with the exception of a maturity date of December 31, 2024 and with a conversion feature based on a 40% of the Company's common stock in a fully diluted basis. The Company accounts for liability classified conversion features and warrants at fair value. As all components of the September 2022 Note are accounted for at fair value both before and after the modification, any changes in the fair value was reflected in earnings. The Company analyzed for the cash flows of the plain debt pre and post modifications and concluded that the changes in cash flows were less than 10% and hence modification accounting was applied. The Company amortized the debt discount using the effective interest method of the modified debt. The principal balance of the December 2023 Note was $1,579, has a debt discount of $257, and bears interest at a rate of 6% per annum. On November 1, 2024, the Company exchanged the December 2023 Note for a new note (the "November 2024 Note"), in the principal amount of $1,620 with an interest of 8% per annum and a maturity date of December 31, 2025 and 750,000,000 shares of common stock (see below).

Additionally, the Company issued to the lender three series of warrants (collectively, the "Warrants"). Each of the Series of Warrants is exercisable into 60% of the Conversion Shares and has a term of three years. The Warrants have exercise prices as follows:

● Series X Warrant, the lower of $0.02 and 120% of the closing price on the date of exercise ;

● Series Y Warrant, the lower of $0.04 and 150% of the closing price on the date of exercise ; and

● Series Z Warrant, the lower of $0.06 and 200% of the closing price on the date of exercise.

During the year ended December 31, 2024 and 2023, the Company recorded accretion of debt discount of $199 and $7 in respect of the December 2023 Note.

The Company has previous warrants outstanding whereby it cannot conclude that it has enough authorized and unissued shares to satisfy the settlement requirements for those already outstanding warrants. As a result, the equity environment would be considered tainted, and the conversion feature and the attached warrants are treated as derivative liabilities.

On July 25, 2023, the lender converted $65 of the September 2022 Note into 20,000,000 shares of Common Stock with a fair value of $140. As a result of the conversion of the $65 of the September 2022 Note, net of $43 of debt discount and the settlement of $118 of the related derivative liability, the Company recorded $10 as a gain on the settlement of debt.

In addition to the conversion, the Company issued 36,000,000 warrants to purchase shares of Common Stock, with exercise prices of $0.0083, $0.0104, $0.0138 each for 12,000,000 warrants. The warrants are exercisable at any time and have a three-year exercise period. As the Company has previous warrants outstanding whereby it cannot conclude that it has enough authorized and unissued shares to satisfy the settlement requirements for those already outstanding warrants. As a result, the equity environment would be considered tainted, and the conversion feature and the attached warrants are treated as derivative liabilities.

*November 2024 Note*

On November 1, 2024, the Company exchanged the December 2023 Note for a new note (the "November 2024 Note"), in the principal amount of $1,620 with an interest of 8% per annum and a maturity date of December 31, 2025 and 750,000,000 shares of common stock. In case of an event of default under the New Secured Exchange Note, interest shall accrue at the lesser of (i) a rate of 12% per annum or (ii) the maximum amount permitted by law, and once the event of default is cured, the interest rate shall revert to 8% per annum. Furthermore, under the terms of the New Secured Exchange Note, an event of default may result, at the holder's election, in the accelerated maturity of the note, in which case 110% of the principal of and accrued and unpaid interest on the note will automatically become due and payable.

On November 1, 2024, the lender also exchanged all outstanding warrants to purchase 2,043,808,450 shares of common stock for 600,000,000 shares of common stock and 650,000 shares of Series D Preferred Stock. As a result of the exchange, the Company recognized a $4,150 reduction in the fair value of the related warrant derivative liability immediately prior to settlement. The Company determined the fair value of the instruments exchanged as of November 1, 2024. The fair value of the common stock was based on the closing market price of $0.0001 per share on the exchange date. The fair value of the Series D Preferred Stock was estimated using an market based approach that considered its current price of the common stock and then applying the conversion ratio as stipulated in the agreement and then applying a dilution in the fair value. The warrants surrendered were valued immediately prior to the exchange using the Black-Scholes option-pricing model, with key inputs including an expected volatility of 301%, risk-free interest rates of 4.23% to 4.32%, expected terms of 0.86 to 1.72 years, and dividend yield of 0%. Following completion of the exchange, no warrants remained outstanding.

*Derivative Liability*

The Company valued the derivative liability relating to the embedded conversion feature using the Monte Carlo Simulation Method because of the unknown stock price at the future time of conversion. The Monte Carlo Simulation was calculated using the following assumptions:

---

| | |
|:---|:---|
|  | December 31, <br>2023 |
| Stock price | $0.003 |
| Term (years) | 1.00 |
| Annual volatility | 108.59% |
| Annual expected return | 10.24% |
| Discount rate | 4.79% |
| Dividend yield | 0% |

---

The Company's activity in its convertible debt related derivative liability was as follows for the years ended December 31, 2023 and 2024

---

| | |
|:---|:---|
| Balance of derivative liability at January 1, 2023 | $3223 |
| Settlement of derivative liability at debt conversion | (128) |
| Change in fair value of derivative liability | 249 |
| Balance of derivative liability at December 31, 2023 | $3344 |
| Settlement of derivative liability at exchange | (368) |
| Change in fair value of derivative liability | (2976) |
| Balance of derivative liability at December 31, 2024 | $- |

---

Key valuation inputs used at the November 1, 2024 settlement date were consistent with those disclosed above: stock price $0.0001 per share, strike $0.007 – $0.05, risk-free rate 4.23 – 4.32 %, expected volatility ≈ 301 %, expected term 0.86 – 1.72 years, and dividend yield 0 %. Upon completion of the warrant exchange, the derivative liability was fully extinguished.

As of December 31, 2024, the fair value of the derivative liability was $0 and for the year ended December 31, 2024 the Company recorded a change in fair value of derivative liability of $2,976 from the settlement of debt related to the derivative liability as non-operating income in the statements of operations. As of December 31, 2023, the fair value of the derivative liability was $3,344 and for the year ended December 31, 2023 the Company recorded a loss of $249 from the change in fair value of derivative liability as non-operating income in the statements of operations.

*Warrant Derivative Liabilities*

As noted above, all the outstanding warrants as of November 1, 2024 were exchanged by the lender resulting in a gain on settlement from the exchange.

As of December 31, 2023, the fair value of the warrant derivative liabilities was $4,253 and for the year ended December 31, 2023 the Company recorded a loss of $2,685 from the change in fair value of derivative warrant liability as non-operating income in the statements of operations. The Company valued the warrant derivative liabilities other than the warrants issued as part of the debt financing using the Black-Scholes option pricing model using the following assumptions as of December 31, 2023: 1) stock price of $0.003, 2) exercise prices of $0.03 - 0.12, 3) remaining lives of 2.05 – 2.56 years, 4) dividend yields of 0%, 5) risk free rates of 4.01 – 4.23%, and 6) volatility of 157.7 – 312.4 %. The Company valued the warrant derivative liability relating to warrants issued in the 2022 debt financing using the binomial lattice model because of the variable exercise price with the following assumptions as of December 31, 2023: 1) stock price of $0.004, 2) remaining life of 1.70 years, 3) dividend yield of 0%, 4) risk free rate of 4.23%, and 5) volatility of 344.4%.

The valuation at the November 1, 2024 exchange date incorporated the following assumptions: stock price $0.0001 per share; strike prices $0.007 – $0.05 per share; risk-free interest rates 4.23 – 4.32 %; expected volatility 301 %; expected terms 0.86 – 1.72 years; dividend yield 0 %. The resulting aggregate fair value of the warrants exchanged was $59,642, as calculated by the Company's valuation specialist. All warrant derivative liabilities were eliminated upon completion of the exchange.

The Company's activity in its derivative liabilities was as follows for the year ended December 31, 2024:

---

| | |
|:---|:---|
| Balance of warrant derivative liabilities at January 1, 2023 | $1727 |
| Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions | (157) |
| Change in fair value of warrant liability | 2685 |
| Balance of warrant derivative liabilities at December 31, 2023 | $4253 |
| Transfer out upon conversion of convertible notes and warrants with embedded conversion provisions | (809) |
| Transfer in due to issuance of warrants with embedded conversion features | 706 |
| Change in fair value of warrant liability | (4150) |
| Balance of warrant derivative liabilities at December 31, 2024 | $- |

---

The Company recorded change in fair value of warrant liability in the amount of $4,150 for the year ended December 31, 2024. The Company recorded loss from the change in fair value of the warrant liability in the amount of $2,685 for the year ended December 31, 2023.

Fluctuations in the Company's stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company's balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company's derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company's expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Fair Value** |
| Liabilities |  |  |  |  |
| Derivative liability | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; - |
| Warrant derivative liability | $- | $- | $- | $- |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Level 1** | **Level 2** | **Level 3** | **Fair Value** |
| Liabilities |  |  |  |  |
| Derivative liability | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $3344 | $3344 |
| Warrant derivative liability | $- | $- | $4253 | $4253 |

---

**Note 7. Loans Payable**

As part of a payment to the City of LaFayette, the bank erroneously created a note payable in the amount of $200 in respect of the payment instead of drawing funds from the Company's account at the bank. The note bore no interest and did not have a maturity date. The note was settled with funds from the Company's account on January 3, 2023.

During the year ended December 31, 2023, entered into a non-convertible loan with a lender in the amount of $25. The loan bears interest at an annual rate of 12% and the maturity date was November 19, 2024. On March 6, 2024, the lender provided the Company with an additional non-convertible loan in the amount of $125. The loan bears interest at an annual rate of 12% and the maturity date is March 5, 2025. On April 30, 2024, the lender provided the Company with an additional non-convertible loan in the amount of $50. The loan bears interest at an annual rate of 12% and the maturity date is April 30, 2025. On November 1, 2024, the lender consolidated and exchanged such notes, including interest owed into a new promissory note with an aggregate outstanding balance of $242. This new Promissory note bears interest at an annual rate of 8% and the maturity date is December 31, 2025. During the year ended December 31, 2024, the Company recorded interest expense in the amount of $0.3 with respect to these loans.

*Loans Payable – Related Party*

On August 1, 2023 an executive loaned the Company $15. The loan bears interest at an annual rate of 4.43%. A maturity date has not yet been set. During the year ended December 31, 2024 and 2023, the Company recorded $0.6 and $0.3, respectively of interest expense in respect of this loan.

**Note 8. Leases**

The Company is not a party to any leases. As a result, the Company did not record rent expense for the years ended December 31, 2024 and 2023. The lease liability disclosed on the balance sheets are the loss on lease incentive recorded in April 2023 (See Note 10).

**Note 9. Common Stock, Preferred Stock and Warrants**

**<u>Common stock</u>**

*Common Stock Issuances*

On June 21, 2024, 3,346,420 warrants with an embedded conversion feature were exercised on a cashless basis for the issuance of 103,500,000,000 shares of common stock.

During the year ended December 31, 2024, the Company issued 126,000,000 shares of common stock in respect of the partial conversion of the December 2023 Note. These shares were valued at $178 upon issuance.

During the year ended December 31, 2024, the Company issued 62,000,000 shares of common stock in respect of the Lease Agreement. These shares were valued at $372 upon issuance.

On November 1, 2024, the lender exchanged all outstanding common stock purchase warrants for 600,000,000 shares of common stock and 650,000 shares of Series D Preferred Stock. These common and Series D preferred stock were valued at $29 and $31, respectively upon issuance.

On November 1, 2024, the company issued 750,000,000 shares of common stock in connection with restructuring its convertible note. These shares were valued at $36 upon issuance.

**<u>Preferred Stock</u>**

In January 2019, the Company's Board of Directors approved the authorization of 10,000 shares of Series B Preferred Stock with a par value of $0.001 and a Stated Value of $100 each ("Series B Preferred Shares"). The holders of the Series B Preferred Shares shall be entitled to receive, when, as, and if declared by the Board, out of funds legally available for such purpose, dividends in cash at the rate of 12% of the Stated Value per annum on each Series B Preferred Share. Such dividends shall be cumulative and shall accrue without interest from the date of issuance of the respective share of the Series B Preferred Shares. Each holder shall also be entitled to vote on all matters submitted to stockholders of the Company and shall be entitled to 55,000 votes for each Series B Preferred Share owned at the record date for the determination of stockholders entitled to vote on such matter or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited. In the event of a liquidation event, any holders of the Series B Preferred Shares shall be entitled to receive, for each Series B Preferred Shares, the Stated Value in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders. The Series B Preferred Shares are not convertible into shares of the Company's common stock. No shares of Series B Preferred Shares have been issued or are outstanding.

In April 2019, the Company's Board of Directors approved the authorization of 200 Series C Preferred Shares with a par value of $0.001 ("Series C Preferred Shares"). The holders of the Series C Preferred Shares have no voting rights, receive no dividends, and are entitled to a liquidation preference equal to the stated value. At any time, the Company may redeem the Series C Preferred Shares at 1.2 times the stated value. Given the right of redemption is solely at the option of the Company, the Series C Preferred Shares are not considered mandatorily redeemable, and as such are classified in shareholders' equity on the Company's balance sheet. No shares of Series C Preferred Shares are outstanding.

On October 31, 2024, the Company's Board of Directors approved the authorization, issuance and designation of 1,000,000 shares of the Company's preferred stock as "Series D Convertible Preferred Stock," par value $0.001 per share (the "Series D Preferred Stock"). The material features of the Series D Preferred Stock are as follows:

● Holders of Series D Preferred Stock are not entitled to vote, except as otherwise expressly provided by law;

● With respect to any dividends or other distributions, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;

● With respect to any assets of the Company upon a liquidation, dissolution or winding up of the Company, the Series D Preferred Stock ranks in parity to the Common Stock, on an as-converted basis;

● Shares of Series D Preferred Stock are not redeemable;

● Shares of Series D Preferred Stock are convertible or exchangeable by holder into shares of Common Stock, at any time such Common Shares are authorized but unissued, on a one-for-one thousand (1-for-1000) basis ; and

● Shares of Series D Preferred Stock are transferrable or assignable without the prior written consent of the Company.

On November 1, 2024, following the restructuring of our convertible notes and the extinguishment of all outstanding warrants, the lender received 650,000 shares of Series D Preferred Stock.

**<u>Warrants</u>**

During the period from January 1, 2024 through November 1, 2024, 226,800,000 warrants were issued as a result of the partial conversion of convertible debt and 617,944,296 warrants were issued are a result of an adjustment to the number of X, Y and Z warrants as a result of the terms of the agreement.

During the year ended December 31, 2023, 8,868,360 warrants were exercised on a cashless basis for the issuance of 80,000,000 shares of common stock. Upon cashless exercise, the Company calculated the fair value of derivative liability on warrants of $44, compared it to the fair value of 80,000,000 shares of $346 and recorded a loss on extinguishment of $302. The Company valued the warrant derivative liability using the Black-Scholes option pricing model using the following assumptions on the date of exercise: 1) stock price of $0.0023-0.01, 2) exercise price of $0.05, 3) remaining life of 2.2-3.1 years, 4) dividend yield of 0%, 5) risk free rate of 3.76-4.37%, and 6) volatility of 171.4-309.3%.

As noted in Note 6, on November 1, 2024, all outstanding warrants were exchanged for common stock and preferred stock. As a result, the extinguishment of the warrant liabilities was recognized as a gain from settlement of warrant liabilities. There were no outstanding warrants as of December 31, 2024.

The following table summarizes information about shares issuable under warrants outstanding during the year ended December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Warrant<br> shares<br> outstanding | \*Weighted<br> average<br> exercise price | \*Weighted <br>average <br>remaining life | Intrinsic <br>value |
| Outstanding and exercisable at January 1, 2023 | 682563502 | $&nbsp;&nbsp;&nbsp;&nbsp;0.06 | 3.18 | $&nbsp;&nbsp;&nbsp;&nbsp; - |
| Issued | 551515432 |  |  |  |
| Exercised | (31668360) | 0.05 | - | - |
| Outstanding and exercisable at December 31, 2023 | 1202410574 | $0.03 | 2.75 | $- |
| Issued | 844744296 |  |  |  |
| Exercised | (3346420) | 0.05 |  |  |
| Exchanged | (2043808450) | 0.01 | - | - |
| Outstanding and exercisable at December 31, 2024 | - | $- | - | $- |

---

---

| | |
|:---|:---|
| (\*) | Of the 844,744,296 warrants issued during the year ended December 31, 2024 and 0 warrants outstanding and exercisable at December 31, 2024, the weighted average exercise price and weighted average remaining life was not included for 844,744,296 and 0 warrants, respectively, because their exercise price is variable. Of the 551,515,432 warrants issued during the year ended December 31, 2023 and 1,202,410,574 warrants outstanding and exercisable at December 31, 2023, the weighted average exercise price and weighted average remaining life was not included for 551,515,432 and 1,119,044,442 warrants, respectively, because their exercise price is variable. See Note 6 for the exercise prices of Series X, Y, and Z warrants. The Series X, Y, and Z warrants terminated with the Company's convertible note exchange on November 1, 2024. |

---

**Note 10. Commitments and Contingencies**

**<u>Bitcoin Production Equipment and Operations</u>**

On March 16, 2023, the Company entered into a partnership agreement (the "Partnership Agreement") and a property lease agreement (the "Lease Agreement", and together with the Partnership Agreement, collectively, the "Agreement") with another cryptocurrency mining company ("Tenant"). Pursuant to the Lease Agreement, the Company agreed to lease to Tenant portions of the Company's six acre mining facility in Lafayette, GA in increments of up to 10 spaces that are 40 feet in length and eight feet in height each ("Spaces"), together with related utilities access including electricity of up to one megawatt ("MW") per Space, for deploying mining equipment, in exchange for rental payments of $5 per Space per month (provided the Spaces are powered) and payment of the electricity costs and deposit requirements arising from the Spaces. In connection with the Lease Agreement, Tenant agreed to make an initial deposit of $229 for the initial electricity deployment for five MW.

Pursuant to the Partnership Agreement, the Company agreed to issue Tenant 500,000 shares its common stock per month for each rented Space (the "Monthly Issuances"), and to also issue an additional number of shares of common stock annually equal to 100% of the Monthly Issuances for the applicable year (the "Annual Issuances," and together with the Monthly Issuances, collectively, the "Issuances"). Further, pursuant to the Partnership Agreement, the Company provided Tenant with the option (the "Option") to lend MGT up to $1 million evidenced by a convertible promissory note that is convertible into 25% of the Company's outstanding common stock, assuming all $1 million is lent, on a pro-forma, post-issuance basis (the "Note"), together with an accompanying warrant to purchase 60% of the shares of common stock underlying the Note (the "Warrant"). The terms of the Note and Warrant would be substantially similar to the September 2022 Note and accompanying warrants that were issued by the Company along with that note. If the Option is exercised, the parties may elect to substitute the $1 million purchase price, in whole or in part, with equipment and infrastructure improvements to enable the Company to have access to up to an additional 10 MWs of electricity to the facility's currently available electrical power capacity. The Company's facility currently has electrical capacity of up to 10 MW. The Agreement has a term of 24 months.

The Company considered the terms of the Option under ASC 815 and concluded that the Option is a non-option embedded derivative with no initial fair value and would not require bifurcation from the host contract. ASC 606 states that consideration payable to a customer should be recorded as a direct reduction to the transaction price. Therefore, the Company determined the transaction should be accounted for on a net basis, and the fair value of the equity should be recorded as a direct deduction from rental revenue. The Company determined that the share issuances would be treated as lease incentives and ASC 842-10-30-5 requires lease incentives to be recorded as a reduction of fixed payments when determining lease payments. The Company concluded that the equity portion of the agreement should be recorded at fair value on the grant date. Upon recording the equity at fair value at the time of issuance and taking into consideration that revenue should be reduced by the fair value of equity, the Company determined that the fair value of the equity exceeds the total cash to be received based on the fair value of the contract at the date of issuance, resulting in a contract loss at inception.

---

| | | | |
|:---|:---|:---|:---|
| **Total lease payments to be received** |  |  | $920000 |
| **Total shares** |  | **FMV on grant date** |  |
| 184000000 | x | 0.006 | 1104000 |
| **Loss at Inception** |  |  | $(184000) |

---

The Company applied the guidance under ASU 2021-05 and determined that it would be appropriate to account for the entire loss at commencement and recognize that loss as a future equity commitment. The loss is based on the difference between the amount of cash to be received under the contract and the fair value of the stock to be issued under the contract. As the lease actually commenced on April 1, 2023, the Company began accounting for the lease on that date. At lease inception, the Company recorded a lease incentive loss of $184 and recorded an operating lease liability in the corresponding amount. The lease liability will be reduced over the lease term period in conjunction with the issuance of the shares. During the year ended December 31, 2024, the Company received $420, issued 62 million shares of common stock and reduced the lease liability by $96.

**<u>Legal proceedings</u>**

We are not engaged in any material legal proceedings. However, in the normal course of business, we may from time to time be named as a party to legal claims, actions and complaints, including matters involving employment, intellectual property others. Although we anticipate that we will continue to incur legal fees in the coming periods to defend our intellectual property rights, we do not believe that there are any claims or actions pending against us currently, the ultimate disposition of which could have a material adverse effect on our results of operation, financial condition or cash flows.

**<u>Electricity Contract</u>**

MGT's prior electricity agreement with the City of LaFayette expired on September 30, 2021. Following the agreement's expiration, the Company and City of LaFayette continued operating on a month-to-month basis.

**Note 11. Employee Benefit Plans**

The Company maintains defined contribution benefit plans under Section 401(k) of the Internal Revenue Code covering substantially all qualified employees of the Company (the "401(k) Plan"). Under the 401(k) Plan, the Company may make discretionary contributions of up to 100% of employee contributions. During the years ended December 31, 2024 and 2023, the Company made contributions to the 401(k) Plan of $3 and $1, respectively.

**Note 12. Related Party Transactions**

 

The crypto exchange used by the Company to monetize its self-mined Bitcoin experienced difficulties beginning in early 2023 and was ultimately shut down. The Company was unable to find a suitable replacement given its low transaction frequency and small trade volumes. As a consequence, the Company uses a personal brokerage account/crypto wallet of its CEO to effect the sales of its mined Bitcoin. These transactions occur approximately monthly and are executed and documented to provide no cost to the Company and no benefit to our CEO. This has been remedied as of October 25, 2024 and the Company now has its own account/crypto wallet.

*Accounts Payable – Related Party*

During the year ended December 31, 2023, a former executive paid consultants reimbursable by the Company in the amount of $20, which remained outstanding as of December 31, 2024. In the second quarter of 2024, the same former executive also paid legal fees reimbursable by the Company in the amount of $25. As of December 31, 2024, the total amount of $45 remains outstanding.

**Note 13. Income Taxes**

Significant components of deferred tax assets were as follows:

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| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2023 |
| U.S. federal tax loss carry–forward | $18952 | $18656 |
| U.S. State tax loss carry–forward | 446 | 382 |
| Equity based compensation | 8567 | 8567 |
| Fixed assets, intangible assets and goodwill | (51) | (51) |
| Accruals |  | 2 |
| Long-term investments | (7) | (7) |
| Total deferred tax assets | 27907 | 27549 |
| Less: valuation allowance | (27907) | (27549) |
| Net deferred tax asset | $- | $— |

---

As of December 31, 2024, the Company had the following tax attributes:

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| | | |
|:---|:---|:---|
|  | **Amount** | **Begins to<br> expire** |
| U.S. federal net operating loss carry–forwards | $90246 | Fiscal 2024 |
| U.S. State net operating loss carry–forwards - Georgia | 9715 | Unlimited |

---

The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2024, and 2023 is as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2023 |
| Expected Federal Tax | -21.0% | -21.0% |
| State income taxes (net of federal benefit) | 1.2% | -1.2% |
| Permanent adjustments | 26.3% | 15.5% |
| True up of prior year deferred tax assets | 0.0% | 0.0% |
| Change in state tax rate | 0.0% | 0.0% |
| Expiration of tax attributes | 0.0% | 0.6% |
| Change in valuation allowance | -6.5% | 6.1% |
| Effective tax rate | 0.0% | 0.0% |

---

As it is not more likely than not that the resulting deferred tax benefits will be realized, a full valuation allowance has been recognized for such deferred tax assets. For the year ended December 31, 2024, the valuation allowance increased by $358. Federal and state laws impose substantial restrictions on the utilization of tax attributes in the event of an "ownership change," as defined in Section 382 of the Internal Revenue Code. As of December 31, 2024, the Company performed a high-level review of its changes in ownership and determined that a change of control event likely occurred under Section 382 of the Internal Revenue Code and the Company's net operating loss carryforwards are likely to be limited.

The Company has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities.

Tax positions that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain.

The Company files income tax returns in the U.S. federal jurisdiction, and Georgia jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non–U.S. income tax examinations by tax authorities for years before 2018.

**Note 14. Subsequent Events**

The Company has evaluated subsequent events through the date these financial statements were issued and determined the following are material:

*Operational and Management Changes*

● In March 2025, the lease agreement with the Company's largest hosting customer expired, and the Company also ceased its remaining self-mining operations.

● On May 13, 2025, the Company sold its facility located at 2076 Foster Miller Drive, LaFayette, Georgia to CSRE Properties LLC for $1,350,000 . The Company used a portion of the proceeds to repay outstanding debt and accrued liabilities.

● On June 1, 2025, the Company appointed Jonathan Pfohl as Chief Financial Officer. Mr. Pfohl entered into an employment agreement providing for a salary of $5,000 per month plus reimbursement of business expenses, terminable on ten (10) business days' notice.

● On June 25, 2025, Paul Taylor resigned as Chief Executive Officer, and the Company appointed Mr. Pfohl to the additional position of Interim Chief Executive Officer.

*Capital Structure and Corporate Actions*

● On July 9, 2025, the Company's Board of Directors and the holders of a majority of the voting power approved an amendment to increase the Company's authorized common shares from 2.5 billion to 10 billion and authorized a reverse stock split of the outstanding common stock at a ratio between 1-for-100 and 1-for-500 , with the exact ratio and timing to be determined by the Board. These actions became effective on August 27, 2025, when the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State.

● On September 22, 2025, the Company and Project Nickel LLC entered into a Second Exchange Note Agreement. Project Nickel agreed to exchange the outstanding principal balance of $1,220,240 on a Secured Exchange Note originally issued November 1, 2024. In consideration, Project Nickel received (i) a new Secured Convertible Promissory Note dated September 22, 2025, in the principal amount of $1,220,240 , bearing interest at 8 % per annum and maturing December 31, 2027 , and (ii) 500,000,000 shares of common stock. The new note is convertible into common shares at $0.001 per share. Under the terms of the New Secured Exchange Note, in the event of default, interest shall accrue at the lesser of (i) 12% per annum or (ii) the maximum rate permitted by applicable law. Upon cure of the default, the interest rate shall revert to the original rate of 8% per annum. Additionally, an event of default may, at the holder's election, trigger an acceleration of the note's maturity, in which case 110% of the then-outstanding principal amount, together with all accrued and unpaid interest, shall become immediately due and payable.

● Also on September 22, 2025, the Company issued 650,000,000 shares of common stock upon conversion of 650,000 shares of Series D Preferred Stock held by Project Nickel. The converted shares represented all outstanding Series D Preferred Stock. The issuance was exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended.

● On September 23, 2025, the Company issued (i) 100,000,000 shares of common stock to its Interim Chief Executive Officer and Chief Financial Officer, Jonathan M. Pfohl, (ii) 100,000,000 shares of common stock to another employee, and (iii) 500,000,000 shares of common stock to Director Michael Onghai in exchange for or waiver of $56,000 in outstanding director fees as of December 31, 2024.

No other subsequent events requiring disclosure were identified

## Ex-31

**Exhibit 31**

**CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002**

I, Jonathan M. Pfohl, certify that:

1. I have reviewed this annual report on Form 10–K of MGT Capital Investments, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| November 10, 2025 | By: | */s/ Jonathan M. Pfohl* |
|  |  | Jonathan M. Pfohl |
|  |  | Interim Chief Executive Officer & Chief Financial Officer |

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## Ex-32

**Exhibit 32**

**CERTIFICATION PURSUANT TO SECTION 906**

**OF THE SARBANES–OXLEY ACT OF 2002**

In connection with the Annual Report of MGT Capital Investments, Inc. (the "Company") on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or
 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
 respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| November 10, 2025 | By: | */s/ Jonathan M. Pfohl* |
|  |  | Jonathan M. Pfohl |
|  |  | Interim Chief Executive Officer & Chief Financial Officer |

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