Z Squared Inc.: Form 10-Q for the period ended Jun 30, 2026

Basis of MD&A Discussion

On April 24, 2026 (the “Closing” or the “Closing Date”), Z Squared Inc. (the “Company”), formerly known as Coeptis Therapeutics Holdings, Inc., completed the business combination contemplated by the Agreement and Plan of Merger, dated as of April 25, 2025 (as amended, the “Merger Agreement”), by and among the Company, CP Merger Sub Inc., a Wyoming corporation and wholly owned subsidiary of the Company (“Merger Sub”), and the company then-named Z Squared, Inc., a Wyoming corporation (such, transactions, the “Merger”). At the effective time of the merger, Merger Sub merged with and into the company then-named Z Squared, Inc., which survived the merger as a wholly owned subsidiary of the Company and was renamed Z Squared OpCo Inc. In connection with the Merger, the Company changed its corporate name from “Coeptis Therapeutics Holdings, Inc.” to “Z Squared Inc.”

Throughout this Quarterly Report on Form 10-Q, (this “Report”), other than the accompanying unaudited condensed consolidated financial statements (which use terms as defined therein), the Company and its business after the Merger (consisting of the registrant, Old Z Squared and its subsidiaries and GEAR Therapeutics, Inc.) are from time to time referred to as “we,” “us” or “our”; the Company and its business prior to the Merger (consisting of the registrant together with its then-subsidiaries Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., Coeptis Pharmaceuticals, LLC, SNAP Biosciences, Inc., and GEAR Therapeutics, Inc.) are from time to time referred to as “Coeptis”; and the company named Z Squared, Inc. its business prior to the Merger is referred to as “Old Z Squared.”

Immediately prior to and in connection with the Merger, Coeptis effected a reorganization of its legacy biopharmaceutical operations, pursuant to which substantially all of the assets and liabilities comprising Coeptis’ biopharmaceutical business (other than those related to GEAR Therapeutics, Inc.) were assigned or contributed to Coeptis’ newly formed wholly-owned subsidiary, Coeptis Holdings, Inc. (“CHI”), in exchange for the issuance to Coeptis of 100% of the common stock in CHI, and the CHI common stock received by Coeptis was, immediately prior to the Merger, distributed on a pro rata basis to Coeptis’ shareholders of record existing as of January 2, 2026 (the “Spin-Out”).

Further, effective upon the closing of the Merger, pursuant to the Asset-For-Share Exchange Agreement between Old Z Squared and BSG Series CM, LLC, a South Carolina limited liability company (“BSG”), dated June 24, 2025 (as amended, the “Exchange Agreement”), BSG contributed, transferred, assigned and conveyed to the Company a fleet of approximately 9,800 ASIC mining machines (consisting primarily of Bitmain Antminer L7 and L9 units and ElphaPex DG1+ units) (the “Mining Assets”) and, in consideration therefor, the Company issued to BSG 43,877,497 shares of its common stock (the “Asset-for-Share Exchange”). Immediately after the Merger, BSG became our controlling shareholder, owning approximately 80% of our outstanding shares.

Prior to the closing of the Merger and the Spin-Out, the Company conducted its operations through its direct and indirect subsidiaries SNAP Biosciences, Inc. and GEAR Therapeutics, Inc. (each majority owned), and Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., and Coeptis Pharmaceuticals, LLC (each wholly owned). As discussed above and in Notes 4, 16 and 17 to the accompanying condensed consolidated financial statements, on April 24, 2026 the Company effected the Spin-Out of Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., Coeptis Pharmaceuticals, LLC, and the Company’s 73% interest in SNAP Biosciences, Inc., and accordingly those entities are no longer subsidiaries of the Company. Following the closing of the Merger and the Spin-Out, the Company’s consolidated subsidiaries consist of Z Squared, Inc. (the Wyoming corporation that survived the Merger as a wholly-owned subsidiary of the Company) and its subsidiaries, and GEAR Therapeutics, Inc. (which was not part of the Spin-Out and remains a majority-owned subsidiary of the Company).

In connection with the Spin-Out, the Company retained its subsidiary GEAR Therapeutics, Inc. (“GEAR”), in consideration for the Company’s issuance or 1,000,000 shares of its common stock to CHI and (ii) granted CHI a limited-time option to acquire all of the outstanding equity interests of GEAR (the “GEAR Option”). Under the GEAR Option, CHI may, at its sole discretion, elect to purchase GEAR for a price equal to the fair market value of GEAR at the time of exercise. Fair market value is to be mutually agreed by the parties or, failing agreement, determined by a mutually acceptable independent valuation expert. The GEAR Option becomes exercisable on October 24, 2026, and remains exercisable for a period of twenty-four (24) months thereafter. The exercise price may be paid, at CHI’s election, in cash, in shares of the Company’s common stock, or in a combination of cash and shares. See Note 16 to the accompanying condensed consolidated financial statements for further information.

Pursuant to the Option Agreement, dated April 24, 2026, among Coeptis, CHI, and GEAR, entered into immediately prior to the Spin-Out, we are subject to certain negative covenants with respect to GEAR that restrict us from taking certain significant actions without the prior written consent of CHI, including liquidating or dissolving GEAR, amending its governing documents, issuing or redeeming GEAR’s equity, taking certain actions with respect to GEAR’s subsidiaries, entering into agreements with affiliates or agreements that are non-terminable by us or that are subject to payment or penalty upon termination, changing GEAR’s line of business, permitting GEAR to incur or guarantee any indebtedness, making loans or advances to GEAR, or selling, licensing, or encumbering GEAR’s assets.

The accompanying unaudited condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 31, 2026 and 2025 represent the historical financial statements of Old Z Squared prior to the Merger and the Company, including the assets of Coeptis that were retained after the Merger and the Mining Assets acquired in connection with the Merger. Because the Merger was accounted for as a reverse acquisition, the accompanying unaudited condensed consolidated financial statements represent a continuation of the financial statements of Old Z Squared. The historical equity of Old Z Squared has been retroactively adjusted to reflect the shares of the Company’s common stock issued to the securityholders of Old Z Squared in the Merger, and share and per-share amounts for periods prior to the closing of the Merger have been restated accordingly. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Old Z Squared as of and for the years ended December 31, 2025 and 2024 and the notes thereto, the unaudited condensed consolidated financial statements of the Company as of March 31, 2026 and for the three month periods ended March 31, 2026 and 2025, the unaudited pro forma condensed combined financial information of the Company as of March 31, 2026 and for the three months ended March 31, 2026 and the year ended December 31, 2025, which are included in the Company’s Current Report on Form 8-K/A filed with the SEC on June 1, 2026. The condensed consolidated balance sheet as of December 31, 2025 was derived from Old Z Squared’s audited financial statements.

Investors are cautioned that the Company’s historical financial information presented in this Quarterly Report is not, for the reasons described above, comparable to the financial information that was presented in prior period periodic reports filed with the SEC and may not be indicative of the Company’s future financial results of operations or financial condition. For additional information regarding the Merger and related transactions, see Notes 4, 16 and 17 to the accompanying condensed consolidated financial statements included elsewhere in this Report.

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to our future results, business strategy, plans and objectives, the expected benefits and timing of the Paradox transaction and any other potential acquisitions or expansion initiatives, our ability to successfully integrate the operations acquired in the Merger, the development and commercialization of artificial intelligence and high-density compute infrastructure, power generation and data center capacity, future capital requirements and financing plans, mining economics and performance, and anticipated results of operations, financial condition and cash flows. Assumptions relating to forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. When used in this Report, the words “estimate,” “project,” “intend,” “believe,” “expect,” “anticipate,” “plan,” “may,” “will,” “should,” “would,” “could,” “potential,” “future” and similar expressions are intended to identify forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of those assumptions could prove inaccurate, and we may not realize the results contemplated by such forward-looking statements. Management decisions are subjective in many respects and susceptible to interpretations and periodic revisions based on actual experience and business developments, the impact of which may cause us to alter our business strategy or capital expenditure plans that may, in turn, affect our results of operations. In light of the significant uncertainties inherent in the forward-looking information included in this Report, you should not regard the inclusion of such information as our representation that we will achieve any strategy, objective or other plan. The forward-looking statements contained in this Report speak only as of the date of this Report as stated on the front cover, and we have no obligation to update publicly or revise any of these forward-looking statements, except as required by applicable law. These and other statements that are not historical facts are based largely on management’s current expectations and assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements. These risks and uncertainties include, among others, those relating to: (i) the recently completed business combination (the “Merger”) with Z Squared, Inc., a Wyoming corporation, accounted for as a reverse acquisition, and the related spin-out of substantially all of our historical biopharmaceutical operations other than those conducted through GEAR Therapeutics, Inc.; (ii) the integration of the operations, accounting, treasury, custody and reporting systems of Z Squared into our existing reporting infrastructure and the change in our management team and board of directors; (iii) the volatility of cryptocurrency prices, mining economics (including hash rate, network difficulty, energy costs and transaction fees) and regulatory developments affecting crypto assets and crypto asset mining; (iv) our dependence on Minting Dome Inc. under the Master Services Agreement for substantially all of our mining operations; (v) our planned expansion into artificial intelligence and high-density compute infrastructure, power generation and data center development, and our limited operating history in those business lines; (vi) the pending acquisition of Paradox Data, LLC (including the related-person aspects of that transaction), the possibility that the transaction may not close on the contemplated terms or timeline or at all, and the risks that the Union County Campus may not achieve the contemplated capacity milestones or returns; (vii) the non-binding nature of the amended Skycore letter of intent and the uncertainty that any transaction with Skycore or with other potential acquisition targets will be pursued or consummated; (viii) our ability to raise the substantial additional capital that will be required to fund development of artificial intelligence and high-density compute infrastructure, data center development and power generation capabilities on acceptable terms, or at all; (ix) dilution to existing stockholders from the Merger, equity issuances under our incentive plans, outstanding warrants and any preferred stock or other securities issued in connection with the Paradox transaction or future financings or acquisitions; (x) the residual risks associated with our continuing interest in GEAR Therapeutics, Inc.; and (xi) the risks and uncertainties described under the caption “Risk Factors” in Part II, Item 1A of this Report, in the “Risk Factors” section of our Current Report on Form 8-K filed with the SEC on April 30, 2026, in the Company’s Registration Statement on Form S-4 (File No. 333-288329) declared effective by the Securities and Exchange Commission on December 23, 2025, and in our subsequent filings with the Securities and Exchange Commission.

Objective

The objective of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide users of our financial statements with the following:

• A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
• Useful context to the financial statements; and
• Information that allows assessment of the likelihood that past performance is indicative of future performance.

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements for the three and six month periods ended June 30, 2026 and 2025, included in Part I, Item 1 of this Report.

Company History

The Company was originally incorporated in the British Virgin Islands on November 27, 2018 under the name Bull Horn Holdings Corp. On October 27, 2022, Bull Horn Holdings Corp. domesticated from the British Virgin Islands to the State of Delaware. On October 28, 2022, in connection with the closing of the Company’s prior business combination with Coeptis Therapeutics, Inc., the Company changed its corporate name from Bull Horn Holdings Corp. to “Coeptis Therapeutics Holdings, Inc.” On April 24, 2026, in connection with the closing of the Merger and related transactions described above and in Notes 4, 16 and 17 to the accompanying condensed consolidated financial statements, the Company changed its corporate name from “Coeptis Therapeutics Holdings, Inc.” to “Z Squared Inc.”

Overview and Outlook

Our current revenue generating operations consist of cryptocurrency mining. Following the completion of the Merger and the Spin-Out on April 24, 2026, the Company’s principal business consists of crypto asset mining focused on the generation of Dogecoin and Litecoin through merged mining using Scrypt-algorithm ASIC hardware across six third-party facilities located in North Carolina, South Carolina, and Iowa. and growth opportunities and are currently focused on potential acquisitions of sites and power infrastructure assets to enable our planned artificial intelligence and high-density compute infrastructure, data center development and power generation capabilities.

The Company is party to a Master Services Agreement, dated July 26, 2025 (as amended, the “MSA”), with Minting Dome, pursuant to which Minting Dome is our exclusive provider of hosting services, electrical power, site infrastructure, remote monitoring, maintenance, and related operational support for all of our crypto asset mining operations. We own the mining hardware, while Minting Dome controls the day-to-day operations of the hardware and the details and manner of performing the services. See Part II, Item 1A, Risk Factors—Risks Related to Our Business—We are dependent on Minting Dome for our mining operations under a Master Services Agreement that grants Minting Dome substantial operational control and imposes significant restrictions on us, and the loss or impairment of this relationship could limit our access to our operating infrastructure and materially adversely affect our business, financial condition and results of operations.” We are currently evaluating the cost structure of our cryptocurrency mining operations and studying ways to limit the volatility of costs in our cryptocurrency mining operations.

During the quarter ended June 30, 2026, shortly following the Merger, our management team and board of directors have shifted our strategic growth focus toward the potential acquisition and development of artificial intelligence and high-density compute infrastructure, data centers and power generation capabilities. As part of this strategy, we are currently exploring or pursuing strategic expansion into related activities including (i) power generation, intended to provide cost-effective and stable energy supply for the Company’s mining operations and digital infrastructure initiatives and, where economically advantageous, sales of power into wholesale electricity markets; (ii) data center development, intended to support the Company’s digital infrastructure initiatives and, where market conditions warrant, to provide colocation services to third-party customers; and (iii) high-density compute infrastructure, intended to serve customers requiring graphics processing unit and other specialized compute capacity for artificial intelligence, machine learning, or similar workloads. Our activities in this area were in the early development stage during the three and six months ended June 30, 2026. We do not currently own or control and have not developed any site that is suitable for the foregoing expansion activities, have not obtained the permits that are or may be required and we have no hosting, colocation, or capacity agreements with customers. The Paradox transaction, described below, has not closed as of the date of this Report. We have limited or no operating history in artificial intelligence and high-density compute infrastructure, data center development or power generation, and there can be no assurance that we will implement this strategy successfully or at all. For a discussion of the risks associated with these expansion business lines, see Part II, Item 1A of this Report under “Risk Factors.”

On July 31, 2026, we entered into a Membership Interest Purchase Agreement with Paradox Infrastructure LLC (“Paradox”) to acquire 100% of the outstanding membership interests of Paradox Data, LLC, expanding a previously announced June 18, 2026 binding letter of intent that had contemplated a majority interest acquisition. The transaction is structured entirely as an equity issuance with no cash consideration or debt financing. At closing, we will issue Series A Convertible Preferred Stock with an aggregate stated value of $5.0 million, which is convertible into shares of our common stock at a fixed price of $7.45 per share, and up to an additional $20.0 million of Series A Convertible Preferred Stock that may be issued in the future upon achievement of specified development milestones at Paradox Data’s Union County Campus in El Dorado, Arkansas. The first milestone is tied to the initial energization of AI compute capacity at the existing site. The remaining milestones are linked to the achievement of aggregate site capacity thresholds of 50 MW, 100 MW, and 150 MW. Each of these capacity-based milestones is generally earned in two installments upon (i) receipt of binding requests for electric service for the incremental capacity and (ii) the subsequent energization of that capacity. Milestone payment obligations do not expire and remain outstanding until satisfied or waived. Paradox Data’s Campus currently has an electric service arrangement providing for up to approximately 8 MW. Closing is subject to customary conditions and is expected to occur within 30 days of signing, subject to an outside date of September 30, 2026 (extendable under certain circumstances to December 31, 2026). Our Chief Technology Officer holds an indirect interest in the seller and certain affiliates, and the transaction was approved by the Audit Committee and Board of Directors as a related-person transaction. See Note 19 to the accompanying condensed consolidated financial statements for addition information about the Paradox acquisition.

On July 9, 2026, the Company and the sellers of Skycore Digital LLC (“Skycore”) entered into a First Amendment to the binding letter of intent originally entered into on April 28, 2026, effective as of June 30, 2026 (the “LOI”). Pursuant to the First Amendment, the drop-dead date under the LOI was extended from June 30, 2026 to January 15, 2027, and may be further extended by mutual written agreement of the parties; the $500,000 break-up fee previously payable by the Company under the LOI was eliminated in its entirety; the exclusivity provisions of the LOI were terminated, and discussions between the parties are now non-exclusive; and the LOI, as amended, is non-binding except for certain surviving provisions relating to confidentiality, governing law, and dispute resolution, such that no party has any obligation to negotiate, execute definitive documentation, or consummate the Skycore Acquisition, and any party may terminate discussions at any time without liability.

There can be no assurance that the Paradox transaction will be consummated on the terms currently contemplated or at all or that any transaction with Skycore will be pursued or entered into. For a discussion of these proposed transactions and the risks associated with them, see Part II, Item 1A of this Report under “Risk Factors.”

Segments

Computing Infrastructure Segment

We operate as a single operating segment and a single reportable segment, Computing Infrastructure, which comprises our crypto asset mining operations, conducted through our wholly owned subsidiary, Z Squared OpCo Inc., together with our planned expansion into artificial intelligence and high-density compute infrastructure, data center development, and power generation. Our mining operations generate revenue through the mining of Dogecoin and Litecoin using merged mining and Scrypt-algorithm ASIC hardware, hosted across six third-party facilities located in North Carolina, South Carolina, and Iowa pursuant to a Master Services Agreement with Minting Dome Inc. These operations commenced on April 24, 2026, the Closing Date of the Merger. Our expansion into artificial intelligence and high-density compute infrastructure, data center development, and power generation is being pursued principally through the acquisition and conversion of existing sites and power infrastructure assets, and remained in a development stage during the three and six months ended June 30, 2026. Our efforts in this area include the Paradox Agreement described in Note 3 to the accompanying condensed consolidated financial statements, as well as non-binding and binding letters of intent with respect to other potential site acquisitions, including the Skycore LOI and the Paradox LOI described in Note 17. We do not expect these activities to generate revenue in the near term, and our ability to develop this business is subject to significant risks and uncertainties, including our ability to secure adequate financing, power capacity, and site control on acceptable terms. See “Our Results of Operations” below for a discussion of our financial results, and Note 18 to the accompanying condensed consolidated financial statements for segment information.

Following the Merger, we continue to conduct residual biopharmaceutical operations through our majority-owned subsidiary, GEAR Therapeutics, Inc., which we do not intend to advance further. These activities do not constitute a separate operating segment, as discrete financial information regarding them is not regularly reviewed by our chief operating decision maker. The following provides background on these retained operations.

In May 2021, Coeptis entered into two exclusive option agreements (the “CD38 Agreements”) relating to separate technologies designed to improve the treatment of CD38-related cancers (e.g., multiple myeloma, chronic lymphocytic leukemia, and acute myeloid leukemia) with Vy-Gen-Bio, Inc. (“Vy-Gen”), a majority-owned subsidiary of Vycellix, Inc., a Tampa, Florida-based private, immuno-centric discovery life science company focused on the development of transformational platform technologies to enhance and optimize next-generation cell and gene-based therapies, including T-cell and Natural Killer (NK) cell-based cancer therapies.

In connection with the Vy-Gen relationship and the Coeptis’ ownership in the two product candidates described above, in December 2021 Coeptis and Vy-Gen entered into a co-development and steering committee agreement. The co-development and steering committee agreement provides for the governance and economic agreements between the Company and Vy-Gen related of the development of the two Vy-Gen drug product candidates and the revenue sharing related thereto, including each company having a 50% representation on the steering committee and each company receiving 50% of the net revenues related to the Vy-Gen product candidates. Details of the co-development and steering committee agreement are summarized in the Company’s Current Report on Form 8-K dated December 27, 2021, including Exhibits 4.1 and 4.2 thereto.

In March 2025, Coeptis reached an agreement with Vy-Gen to successfully license the exclusive worldwide development and commercialization rights to the GEAR™ (Gene Edited Antibody Resistant) Cell Therapy Platform, representing a first-in-class approach to modifying potent cancer-targeting immune cells to optimize the likelihood of deep remission in patients with hematologic malignancies and other cancers. Coeptis had previously held limited co-development rights to GEAR.

Our Results of Operations

Revenue. We generate revenue from our crypto asset mining operations, conducted through our wholly owned subsidiary, Z Squared OpCo Inc., which mines Dogecoin and Litecoin through merged mining using Scrypt-algorithm ASIC hardware across six third-party facilities located in North Carolina, South Carolina, and Iowa. These operations commenced on April 24, 2026, the closing date of the Merger. We have not yet achieved profitability, and there remains uncertainty regarding our ability to generate sufficient revenue to cover our operating expenses and fund our business plan without additional capital.

Cost of Revenue. Cost of revenue consists of the direct costs of our mining operations, including electricity and power usage, hosting fees payable to Minting Dome Inc. under our master services agreement, mining pool fees, and depreciation of our ASIC mining fleet. We expect cost of revenue to fluctuate based on crypto asset prices, network difficulty, and the terms of our hosting arrangements.

Cost of Operations. Cost of operations consists primarily of professional services fees related to the Merger and our pending acquisitions, stock-based compensation associated with awards granted under our 2025 Incentive Compensation Plan, and salaries and related costs for personnel. Cost of operations also includes amortization of co-development rights, realized losses on the sale or exchange of crypto assets, unrealized losses arising from the remeasurement of the crypto assets we hold, and general and administrative and selling and marketing expenses. Professional services fees and stock-based compensation together represented substantially all of our cost of operations for the three and six months ended June 30, 2026. We expect that our general and administrative expenses will increase in the future as we build out corporate infrastructure to support our crypto asset mining operations and our planned expansion into artificial intelligence and high-density compute infrastructure. We also anticipate that we will continue to incur significant accounting, audit, legal, regulatory, compliance, insurance, and investor relations expenses associated with operating as a public company following the Merger.

Amortization. Amortization expense consists of amortization of co-development rights and the capitalized milestone fee recognizing full transfer of the license agreement to GEAR. Management determined a two year useful life for the asset at the Closing Date of the reverse acquisition. The accompanying amortization expense reflects the period from the Closing Date to June 30, 2026.

Impairment. In June 2026, the Company determined that continued investment in development activities related to the co-development rights was not warranted at that time. This determination constituted a triggering event under ASC 360-10-35, Property, Plant, and Equipment – Subsequent Measurement, requiring the Company to test the co-development rights for recoverability. Management determined that the carrying amount of the GEAR-related rights was not fully recoverable and estimated the fair value of the rights to be approximately $450,000 based on the amount management expects to recover through a sale or licensing transaction. See Note 8 for further discussion.

Crypto Asset Losses. We recognize realized losses on the sale or exchange of crypto assets and unrealized losses arising from the remeasurement of crypto assets held at the end of each reporting period. These amounts will fluctuate with the market prices of Dogecoin and Litecoin and with the timing and volume of the crypto assets we sell or exchange, and we expect them to vary from period to period.

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Old Z Squared had no operations during the three and six months ended June 30, 2025, and our crypto asset mining operations commenced on April 24, 2026, the closing date of the Merger. Accordingly, the results discussed below reflect approximately 68 days of operations, no comparative amounts are presented for the 2025 periods, and period-over-period percentage changes are not meaningful. For the same reason, our results for the six months ended June 30, 2026 are substantially identical to our results for the three months then ended, differing only by $30 of general and administrative expenses incurred prior to the commencement of operations. The discussion below therefore addresses both periods together, and references to amounts apply to both periods except as otherwise noted.

Revenue

We generated total revenue of $1,583,485, consisting of $1,393,010 from Dogecoin mining and $190,475 from Litecoin mining, representing 88% and 12% of total revenue, respectively. Because we mine Dogecoin and Litecoin through merged mining, both revenue streams are produced by the same deployed hash rate, and the relative contribution of each is a function of the block rewards and market prices of the two crypto assets during the period rather than of any allocation of our mining fleet between them.

Cost of Revenue

Cost of revenue consists of electricity and power usage, hosting fees payable to Minting Dome Inc. under our master services agreement, mining pool fees, and other costs directly attributable to the generation of cryptocurrency rewards. Depreciation of our ASIC mining fleet is stated separately.

Cost of revenue, exclusive of depreciation, was $2,191,923, or 138% of total revenue, and depreciation was $1,157,509, resulting in total cost of revenue of $3,349,432, or 211% of total revenue. Our direct mining costs exceeded our mining revenue before giving effect to depreciation of our mining fleet.

Cost of Operations

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Total cost of operations was $12,028,653 for the three months ended June 30, 2026 and $12,028,683 for the six months then ended. Professional services expense of $4,195,588 and stock-based compensation expense of $7,033,939 together represented approximately 93% of our total cost of operations.

Professional services expense. Professional services expenses consisted of fees incurred in connection with the Merger, pending acquisitions, and other legal, accounting and other consulting fees incurred during normal course of business. We do not expect to incur professional services fees at this level in future periods to the extent these transactions are completed, although we expect to continue to incur significant professional fees associated with operating as a public company.

Stock based compensation expense. Stock based compensation expense of $7,033,939 related to awards granted under our 2025 Incentive Compensation Plan. As of June 30, 2026, there was $2,428,328 of unrecognized compensation cost related to unvested RSU awards, which we expect to recognize over a weighted-average period of 1.23 years, and $3,661,733 of unrecognized compensation cost related to unvested stock option awards, which we expect to recognize over a weighted-average period of 0.12 years.

Amortization expense of $118,664 was computed based on management’s estimated two year useful for the GEAR platform, reflecting the period from the Closing Date to June 30, 2026. The GEAR platform consists of co-development rights acquired in the reverse acquisition and the capitalized milestone fee upon full license transfer, in the amounts of $425,000 and $450,000, respectively. Upon the Company’s determination that further development of the co-development rights was not warranted at that time, the Company recognized a $306,336 impairment loss, resulting in a carrying value of $450,000 for the co-development options. Salary expense of $272,852 for the period from April 24, 2026 through June 30, 2026 and is not indicative of a full quarter of personnel costs. We recognized a realized loss of $74,611 on the exchange of crypto assets and an unrealized loss of $45 on crypto assets held at June 30, 2026.

Loss from Operations

Loss from operations was $13,794,600 for the three months ended June 30, 2026 and $13,794,630 for the six months then ended June 30, 2026.

Other Expense

Total other expense, net was $145 for both periods, consisting of interest expense of $226 partially offset by other income of $81. These amounts were not material to our results of operations.

Provision for Income Taxes

We recorded no provision for or benefit from income taxes for the three and six months ended June 30, 2026, despite incurring a loss before income taxes of $13,794,745 and $13,794,775, respectively. We have recorded a full valuation allowance against our net deferred tax assets because, based on the available evidence, we do not believe it is more likely than not that these assets will be realized.

Net Loss

Net loss was $13,794,745 for the three months ended June 30, 2026 and $13,794,775 for the six months ended June 30, 2026. Of these amounts, $13,722,495 and $13,722,525, respectively, were attributable to common stockholders, and $72,250 in each period was attributable to non-controlling interests in GEAR. Net loss per share attributable to common stockholders, basic and diluted, was $0.28 and $0.29 for the three and six months ended June 30, 2026, respectively.

Liquidity and Capital Resources

At June 30, 2026, the Company had cash of $15,492,446, compared to cash of $1,402 at December 31, 2025. At June 30, 2026, we had working capital of $13,499,233, consisting of current assets of $15,525,787 and current liabilities of $2,026,554. We had no outstanding debt, as the convertible promissory note issued during the three months ended June 30, 2026, along with accrued interest, was converted into shares of our common stock. See Note 10.

Our cash increased during the period as a result of $15,418,839 of proceeds from the issuance of common stock under the Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”). The SEPA has been fully utilized, and no further capital is available to us under that arrangement. Any additional capital would need to be raised through a new equity or debt financing arrangement.

We have evaluated our liquidity and capital resources and believe that our existing cash and cash equivalents are sufficient to fund our presently planned operating and capital requirements for at least twelve months from the date the condensed consolidated financial statements included in this Quarterly Report are issued.

Over the medium-term, our strategy to expand into artificial intelligence and high-density compute infrastructure, data center development and power generation is likely to require substantial additional capital for site acquisition and land control; utility deposits and interconnection work; substations and electrical distribution; transformers, switchgear, and backup power systems; cooling infrastructure; fiber and networking; buildings or modular data center infrastructure; security, fire suppression, and monitoring systems; engineering, permitting, and construction; and commissioning and initial site operations, among other things. The amount and timing of these capital requirements will depend on the pace and scope of execution of this strategy, including the timing of site conversions, equipment procurement, and the closing of pending acquisitions. We expect that we will need to raise additional capital through equity or debt financing, or a combination thereof, to fund the full execution of this strategy, and there can be no assurance that such capital will be available on favorable terms, or at all. Our inability to raise sufficient capital could result in delaying, scaling back, or discontinuing some or all aspects of these initiatives, but we do not currently expect this strategy to affect our ability to fund our revenue-generating existing operations over the next twelve months.

In assessing our future cash requirements, we note that a substantial portion of our operating costs during the period was settled other than in cash. Of our total cost of operations of $12,028,683 for the six months ended June 30, 2026, $3,552,213 was settled through the issuance of shares of common stock to service providers, $7,033,939 represented stock-based compensation, and $1,508,488 of operating expenses was paid using crypto assets received as mining revenue. In addition, our accounts payable and accrued expenses increased by $1,382,047 and $524,387, respectively, which includes the $450,000 milestone payment described above. We expect a greater proportion of our operating costs to be settled in cash in future periods.

Cash Flows

Operating Activities. Net cash used in operating activities was $202,795 for the six months ended June 30, 2026, compared to our net loss of $13,794,775 for the same period. The difference was principally attributable to non-cash adjustments, including $3,552,213 of shares issued for non-employee services, $7,033,939 of stock-based compensation, $1,157,509 of depreciation of mining equipment, $306,336 of impairment loss related to the co-development rights, and $118,664 of amortization of co-development rights, together with $1,508,488 of operating expenses paid using crypto assets and net increases in accounts payable and accrued expenses of $1,456,434. Because so substantial a portion of our operating costs was settled other than in cash, our net cash used in operating activities for the period is not indicative of the costs, and potential cash requirements, of our operations in future periods.

Investing Activities. We had no cash flows from investing activities for the six months ended June 30, 2026. Our mining fleet, which had a net carrying value of $11,281,391 at June 30, 2026, was received as a non-cash capital contribution recorded at $12,438,900 rather than acquired for cash. The milestone fee related to the license transfer to GEAR, in the amount of $450,000, was supplemented as a non-cash disclosure in the condensed consolidated statement of cash flows as it had not been paid as of June 30, 2026.

Financing Activities. Net cash provided by financing activities was $15,693,839 for the six months ended June 30, 2026, consisting of $15,418,839 of proceeds from the issuance of common stock under the SEPA and $275,000 of proceeds from a note payable. The note payable, together with $226 of accrued interest, was subsequently converted into shares of our common stock.

Critical Accounting Estimates

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, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management evaluates these estimates on an ongoing basis. Actual results could differ materially from these estimates under different assumptions or conditions. The Company considers an accounting estimate to be “critical” if (i) the estimate requires assumptions to be made that were uncertain at the time the estimate was made and (ii) different estimates that the Company reasonably could have used, or changes in those estimates that are reasonably likely to occur, could have a material effect on the Company’s financial position, results of operations, or cash flows. The following accounting estimates were critical to the historical financial statements of Coeptis Therapeutics Holdings, Inc. and its subsidiaries presented in this Quarterly Report:

Goodwill and Intangible Assets. Goodwill represents the excess of consideration transferred over the fair value of identifiable net assets acquired and arose in connection with the Company’s April 24, 2026 Merger, accounted for as a reverse acquisition under ASC 805-40, with OpCo treated as the accounting acquirer. As of June 30, 2026, the Company’s goodwill balance was $106,932,241.

In accordance with ASC 350-20, goodwill is not amortized but is tested for impairment at least annually, and more frequently if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying value (a “triggering event”). The identification of reporting units, the assessment of whether a triggering event has occurred, and, if applicable, the determination of a reporting unit’s fair value each require significant management judgment and are subject to ongoing evaluation.

Management has determined that the Company operates as a single reporting unit, Computing Infrastructure, as of June 30, 2026, comprising the Company’s cryptocurrency mining operations, its data, computing and AI infrastructure operations, and the residual biopharmaceutical operations retained by the Company following the closing of the Merger. This determination required judgment regarding the level at which discrete financial information is available and reviewed by segment management, and the extent to which any operating segments share economic characteristics. The Company’s reporting units for goodwill impairment testing purposes under ASC 350-20 are determined independently of, and are not required to correspond on a one-to-one basis with, the Company’s reportable segment presented in accordance with ASC 280. All of the Company’s goodwill is allocated to the single Computing Infrastructure reporting unit. As the Company’s data, computing and AI infrastructure business remains in a development stage, management will continue to evaluate whether this business constitutes a separate reporting unit requiring a discrete allocation of goodwill, which could result in the identification of additional reporting units in future periods.

Management monitors a range of qualitative factors in assessing whether a triggering event has occurred under ASC 350-20-35-3C, including macroeconomic and industry conditions, cost factors, the Company’s overall financial performance, trends in the Company’s share price and market capitalization, and other entity-specific developments, including the Company’s ongoing expansion into artificial intelligence and high-density compute infrastructure. This evaluation is performed at each reporting period and involves significant judgment.

Based on this evaluation, management determined that a triggering event occurred during the second quarter of 2026 as a result of the decline in the Company’s stock price and market capitalization following the Merger, and performed a quantitative Step 1 goodwill impairment test for the Cryptocurrency Mining reporting unit as of June 30, 2026. Using the Company’s market capitalization as an indicator of the reporting unit’s fair value, management concluded that fair value exceeded carrying value, and no impairment was recorded.

Property and Equipment - Estimated Useful Lives of Mining Equipment. Property and equipment, consisting primarily of ASIC miners used in the Company’s crypto asset mining operations, was recorded at BSG’s carrying amount as of the date of transfer, determined in accordance with U.S. GAAP, which represents its cost basis for purposes of subsequent depreciation, and is depreciated on a straight-line basis over the estimated useful life of the underlying assets. As of June 30, 2026, mining equipment, net, represented $11,281,391.

Management estimates the useful life of its ASIC mining fleet to be two years. This estimate requires significant judgment, as it is driven primarily by technological obsolescence rather than physical wear and tear. In determining the appropriate useful life, management considers:

• The rate of improvement in hash rate efficiency and power consumption of newly released mining hardware, which affects the point at which existing equipment becomes uneconomical to operate;
• Network difficulty trends for the Dogecoin and Litecoin networks, which affect the profitability of a given unit of hash rate over time;
• Observed secondary market resale values and liquidity for used ASIC equipment of comparable age and specification; and
• Useful lives disclosed by other publicly traded crypto asset mining companies for comparable equipment, which range from approximately two to five years.

A change in any of these factors could result in a change in the estimated useful life of the Company’s mining equipment. A shortened useful life would accelerate depreciation expense in future periods, while an extended useful life would reduce depreciation expense but could also serve as an indicator requiring evaluation of whether the carrying value of the equipment is recoverable under ASC 360. Management periodically reassesses the appropriateness of this estimate, including in connection with its ongoing evaluation of potential impairment indicators affecting long-lived assets, and any change in estimate is accounted for prospectively in accordance with ASC 250.

Fair Value of Warrant Liabilities. The Company classifies its former Public Warrants and Private Placement Warrants as derivative liabilities measured at fair value on a recurring basis, with changes in fair value recognized in the condensed consolidated statements of operations. Both classes are valued using a Black-Scholes valuation model and are classified within Level 3 of the fair value hierarchy. The former Public Warrants ceased to meet the requirements for continued listing during the period and are no longer publicly traded; because a quoted market price is no longer available, they were transferred from Level 1 to Level 3 and are now valued using a model that incorporates the issuer call provision. The Private Placement Warrants are valued using a model that excludes the call provision, as those warrants are not subject to it while held by their initial holders. The primary unobservable input is the expected volatility of the Company’s common stock. As of June 30, 2026, the Warrants were valued at a de minimis amount, reflecting an exercise price substantially in excess of the price of the Company’s common stock. Changes in the expected volatility, the risk-free interest rate, or the underlying stock price could result in materially different fair value measurements. See Note 9 to the condensed consolidated financial statements.

Fair Value of Investments in Privately-Held Companies. The Company holds investments in equity securities of privately-held companies, recorded as investments on the condensed consolidated balance sheets at a carrying value of $320,543 at June 30, 2026. The Company applies the measurement alternative under ASC 321, recording these investments at cost less impairment, with adjustments for observable price changes in orderly transactions involving similar securities. The Company assesses these investments for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The assessment of whether impairment exists involves significant management judgment, including with respect to the financial condition and near-term business prospects of the investee, the duration and extent to which the fair value of the investment may have been less than cost, and the existence of observable transactions involving comparable securities. Changes in these judgments could result in materially different impairment conclusions. See Note 7 to the condensed consolidated financial statements.

Share-Based Compensation. The Company estimates the fair value of granted option awards under ASC 718-10 using a Black-Scholes option pricing model, which requires inputs that involve management judgment, including share price, exercise price, expected volatility, the risk-free interest rate, and the expected term. For awards containing market-based vesting conditions, fair value is estimated using a Monte Carlo simulation model, which simulates potential future share-price paths to determine the probability and timing of the vesting condition being satisfied. Expected volatility is estimated based on the volatility of the Company. The fair value of restricted stock units is determined based on the fair value of the Company’s common stock on the grant date. Changes in the assumptions used could result in materially different stock-based compensation expense. See Note 12 to the condensed consolidated financial statements.

Going Concern. As described in Note 2 to the condensed consolidated financial statements, management evaluates at each reporting period whether conditions or events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. Management has concluded that the Company’s existing cash and cash equivalents are sufficient to fund its presently planned operating and capital requirements for at least twelve months from the date the condensed consolidated financial statements are issued, and accordingly that substantial doubt does not exist. That conclusion involves significant management judgment with respect to, among other things, the Company’s projected cash flows, the anticipated amount and timing of operating and capital expenditures, and the pace at which management executes on planned initiatives. Separately, full execution of the Company’s artificial intelligence and high-density compute infrastructure strategy will require substantial additional capital beyond the Company’s current cash resources, which management expects to raise through equity or debt financing; there can be no assurance such capital will be available on favorable terms, or at all. Changes in those projections, plans, or capital availability could result in materially different conclusions regarding the Company’s ability to continue as a going concern in future periods.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this Item.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2026, the end of the period covered by this Report. In conducting that evaluation, the Company’s principal executive officer and principal financial officer reviewed the Company’s historical disclosure controls and procedures as in effect during the period covered by this Report. Based on that evaluation, and subject to the inherent limitations of any system of controls described below, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026.

Changes in Internal Control over Financial Reporting

In connection with the Merger, completed on April 24, 2026, the operations of the Company, including the Mining Assets acquired in connection with the Merger, now constitute substantially all of our business. Management’s evaluation of disclosure controls and procedures as of the end of the period therefore reflects the post-combination control environment, including the integration of the accounting acquirer’s processes into the registrant’s disclosure controls and procedures. Prior to the Merger, Old Z Squared, the accounting acquirer was a private company and had not been subject to the internal control over financial reporting requirements under the Exchange Act. Following the closing of the Merger, management has been integrating the financial reporting processes and control environment of Old Z Squared with that of the registrant and designing and implementing internal controls appropriate for a public company reflecting our current business, including the accounting, treasury, custody, and operational systems of Old Z Squared and its subsidiaries - including those relating to crypto asset custody, hash rate measurement, energy procurement, mining revenue recognition, and reporting of holdings of crypto assets - into our internal control over financial reporting framework. These integration and implementation activities constitute changes in the registrant’s internal control over financial reporting during the quarter ended June 30, 2026 and, given the nature and complexity of the Merger and related transactions and the change in the Company’s principal business, these efforts may require further changes to our internal control over financial reporting framework in future periods.

Except for the changes resulting from the Merger and related transaction, there were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company notes, however, that the Merger and the Spin-Out, each completed on April 24, 2026 and described in Note 4 to the accompanying condensed consolidated financial statements, will materially affect the Company’s internal control over financial reporting in subsequent periods. The Company is in the process of integrating, and the Company expects to make significant changes to that framework as a result of the Transactions and the change in the Company’s principal business. The Company will report on the status of those changes in its subsequent periodic reports.

Inherent Limitations on the Effectiveness of Controls

The Company’s management, including its current co-principal executive officers and current principal financial officer, does not expect that the Company’s disclosure controls and procedures or its internal control over financial reporting will prevent or detect all errors and all fraud. Any system of controls, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, the design of any control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations of any system of controls, no evaluation of controls can provide absolute assurance that all control issues and all instances of fraud, if any, have been detected.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in the “Risk Factors” section of the Company’s Current Report on Form 8-K files with the SEC on April 30, 2026 (the “Merger 8-K”), the “Risk Factors” section of the Company’s Registration Statement on Form S-4 (File No. 333-288329) declared effective by the Securities and Exchange Commission on December 23, 2025 (the “Registration Statement”), and as further updated by the risk factors set forth below. There have been material changes to the risk factors disclosed in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report”) as a result of (i) the completion on April 24, 2026 of the Merger and related transactions, each as described elsewhere in this Report and in Notes 4, 16 and 17 to the accompanying condensed consolidated financial statements; (ii) the resulting change in the Company’s principal business from the biopharmaceutical and technology business conducted by Coeptis Therapeutics Holdings, Inc. and its subsidiaries to the crypto asset mining business now conducted through Z Squared and its subsidiaries; (iii) the change in the Company’s management team and board of directors; and (iv) certain new and pending strategic transactions and capital structure matters described below.

Incorporation by Reference of Risk Factors from the Merger 8-K and Registration Statement.

The risk factors set forth in the “Risk Factors” section of the Merger 8-K (beginning on page 18 thereof) and the Registration Statement (beginning on page 41 thereof) are incorporated by reference in their entirety into this Report, as updated herein, except that the risk factors set forth under the caption “Risks Related to Coeptis” in the Registration Statement that relate to the biopharmaceutical and technology businesses conducted through the Spin-Out Subsidiaries are no longer applicable to the Company, as those operations have been distributed to the Company’s stockholders in connection with the Spin-Out. Risks relating to the Company’s continuing interest in GEAR Therapeutics, Inc. (which was not part of the Spin-Out) remain applicable.

The risk factors set forth below supplement, update, and (to the extent inconsistent) supersede the risks disclosed in the 2025 Annual Report, the Merger 8-K and the Registration Statement.

Risks Related to Our Business

We are dependent on Minting Dome for our mining operations under a Master Services Agreement that grants Minting Dome substantial operational control and imposes significant restrictions on us, and the loss or impairment of this relationship could limit our access to our operating infrastructure and materially adversely affect our business, financial condition and results of operations.

All of our crypto asset mining operations are conducted exclusively under a Master Services Agreement dated July 26, 2025 (as amended, the “MSA”) with Minting Dome Inc. (“Minting Dome”). Under the MSA, Minting Dome is our sole and exclusive provider of hosting services, electrical power, site infrastructure, remote monitoring, maintenance, and related operational support across all of our facilities. We own the mining hardware, but the MSA expressly provides that Minting Dome has sole responsibility for supervising, controlling, and directing the details and manner of performing the services, and that we have no right to instruct, supervise, control, or direct those details. Services are provided pursuant to high-level statements of work and our general direction, but operational methods remain under Minting Dome’s control.

The MSA further restricts our practical ability to oversee or influence day-to-day operations. Our physical access to the miners is limited: we must provide at least 72 hours’ prior notice, be accompanied by a Minting Dome representative, refrain from interfering with operations, and obtain Minting Dome’s written approval, which it may withhold, delay, or condition in its sole discretion to protect security and operational integrity. Minting Dome also has sole discretion over the selection of its personnel and contractors and may freely subcontract any of its obligations. The MSA contains an exclusivity covenant that prohibits us from engaging any other provider for the same or similar services during the term. In addition, the applicable statement of work permits Minting Dome to increase its fees upon 15 days’ prior written notice in the event of increases in its operational costs or expenses, and we are required to reimburse reasonable out-of-pocket expenses.

The initial term of the MSA is three years from its effective date, with no automatic renewal provision stated in the agreement. If the MSA is terminated (including for our non-payment or other defaults), is not renewed at the end of the term, or if Minting Dome is unable or unwilling to perform its obligations for any reason, we would lose access to our entire operating infrastructure and would be unable to continue mining operations. Even short of termination, Minting Dome’s broad operational discretion, combined with our limited access and control rights and the exclusive nature of the arrangement, means that decisions regarding the method and manner of hosting, maintenance, uptime management, cost structure, and related activities are largely outside our direct control. Any failure by Minting Dome to perform adequately, any increase in its costs or fees, any exercise of its discretion in a manner adverse to our interests, or any dispute regarding operational matters could materially and adversely affect our uptime, hash rate, costs, and overall results of operations.

Because we currently have no alternative hosting, power, or infrastructure arrangements in place, the concentration of operational control and the contractual restrictions described above create a single point of failure for our entire business. Any adverse development in our relationship with Minting Dome, including changes in its financial condition, operational capabilities, priorities, or willingness to continue the arrangement on existing or acceptable terms, could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our relationship with Minting Dome has involved related-party considerations, which could give risk to perceptions of conflicts of interest.

Michelle Burke, who previously served as Co-Chief Executive Officer and a director of the Company while simultaneously serving as Chief Executive Officer and a director of Minting Dome, resigned from all positions with the Company effective May 22, 2026. Notwithstanding her resignation, the MSA remains in effect. Any actual or perceived conflicts arising from the historical dual roles, residual commercial relationship, or any future disputes under the MSA could adversely affect the relationship and our operations and could give rise to negative market perceptions about the alignment of interests between our management team and our shareholders.

BSG Series CM, LLC, the entity from which we acquired our entire mining fleet, was our controlling stockholder immediately after the business combination and is a named defendant in SEC enforcement proceedings.

Pursuant to the Exchange Agreement, BSG Series CM, LLC (“BSG”) contributed approximately 9,800 ASIC miners to us in exchange for a substantial equity interest, in a transaction that was accounted for as a related party transaction between entities under common control. Immediately following the closing of the Merger on April 24, 2026, BSG beneficially owned approximately 80% of our outstanding common stock. On or about April 30, 2026, BSG distributed those shares pro rata to its members. An affiliate of BSG is a named defendant in Securities and Exchange Commission v. David Feingold, et al., Case No. 1:25-cv-20436-DPG (S.D. Fla.), and is subject to regulatory monitoring and oversight pursuant to court orders. Although BSG no longer beneficially owns shares, our historical relationship with BSG, the low cost basis of the shares distributed to its former members, and the ongoing enforcement action could expose us to reputational harm, regulatory inquiries, or adverse court orders affecting the shares or our capital structure.

Risks Related to the Completed Business Combination and Changes in Our Business

The Company’s historical financial statements filed with prior periodic reports and other SEC filings do not reflect its current business and are not indicative of its future results.

The condensed consolidated financial statements included in this Report have been prepared under the reverse acquisition method of accounting pursuant to ASC 805-40. Old Z Squared is the accounting acquirer and the accounting predecessor. Accordingly, the historical financial statements presented herein are those of Old Z Squared and its consolidated subsidiaries, and not the historical biopharmaceutical operations of Coeptis Therapeutics Holdings, Inc. Prior to the closing of the Business Combination on April 24, 2026, Old Z Squared had limited operating history and essentially no material mining operations. The Company’s primary operating assets—the fleet of approximately 9,800 ASIC miners—were contributed by BSG Series CM, LLC only upon closing of the Merger pursuant to the Amended and Restated Asset-For-Share Exchange Agreement. As a result, the historical financial statements of the accounting acquirer do not reflect a meaningful period of crypto asset mining operations and are not indicative of the Company’s future results of operations, financial position, or cash flows.

In connection with the Merger, substantially all of the legacy biopharmaceutical assets and operations of Coeptis (other than GEAR Therapeutics, Inc.) were spun out to Coeptis Holdings, Inc. Those disposed operations are not reflected in the continuing financial statements of the Company. Investors should not rely on the historical financial statements of either the pre-Merger Coeptis or the pre-contribution Old Z Squared entity as indicative of the Company’s ongoing crypto asset mining business or its future performance.

The Company has a new management team with limited experience operating the Company as a public company in the crypto asset mining business.

Following the closing of the Merger, the Company’s executive officer team and board of directors were substantially replaced. The new executive officers are drawn principally from the management of Z Squared, which was a privately-held company prior to the Merger. Although the new management team has experience in the crypto asset mining industry, the team has limited experience operating as the management of a publicly-traded company subject to the reporting, governance, and compliance requirements of the Securities Exchange Act of 1934, the rules and regulations of the SEC, the listing standards of The Nasdaq Stock Market, and the Sarbanes-Oxley Act. The integration of the new management team into the Company’s existing public-company reporting infrastructure, including its disclosure controls and procedures and internal control over financial reporting, may take time and may give rise to material weaknesses, deficiencies, or compliance failures that could adversely affect the Company’s ability to satisfy its reporting obligations on a timely basis, the accuracy of its financial reporting, and the trading price of its common stock.

The Merger and related transactions were complex and involved significant changes in our business, assets, capital structure, and management, which may give rise to unknown liabilities, regulatory challenges, or other unanticipated risks.

The Merger completed on April 24, 2026 was structured as a reverse acquisition for accounting purposes and involved multiple concurrent steps, including the contribution of substantially all of our operating mining assets by BSG Series CM, LLC pursuant to an asset-for-share exchange, the spin-out of substantially all of the legacy biopharmaceutical assets and operations of Coeptis Therapeutics Holdings, Inc. (other than our retained interest in GEAR Therapeutics, Inc.), a complete change in our principal business from biopharmaceutical development to crypto asset mining, and a substantial replacement of our executive management team and board of directors. These transactions fundamentally altered our assets, liabilities, capital structure, internal controls, reporting systems, and risk profile.

Because of the complexity and substantially simultaneous nature of these changes, we may face unknown or contingent liabilities, which may include regulatory inquiries, accounting adjustments, tax consequences, or other unanticipated issues arising from the pre-Merger history of the Company, the contributed mining assets, the spin-out, or the integration of new systems and personnel. Any such liabilities, challenges, or unanticipated consequences could divert management attention, result in additional costs or restatements, expose us to regulatory or litigation risk, or otherwise materially and adversely affect our business, financial condition, results of operations, and the market price of our common stock.

The Company’s internal control over financial reporting may be inadequate as a result of the Transactions, the change in management, and the change in business.

The Company’s existing system of internal control over financial reporting was designed primarily for the biopharmaceutical and technology business conducted by Coeptis Therapeutics Holdings, Inc. and its subsidiaries prior to the Merger. As a result of the Transactions, the change in the Company’s principal business, the change in management, and the integration of Z Squared’s accounting, treasury, custody, and operational systems (including those relating to crypto asset custody, hash rate measurement, energy procurement, and mining revenue recognition), the Company expects to make significant changes to its internal control over financial reporting in the periods following the closing of the Transactions. The Company may identify material weaknesses or significant deficiencies in its internal control over financial reporting as a result of these changes. Any failure to maintain effective internal control over financial reporting could result in material misstatements in the Company’s financial statements, loss of investor confidence, restrictions on the Company’s ability to access the capital markets (including its eligibility to use shelf registration statements on Form S-3), and adverse effects on the trading price of the Company’s common stock.

Substantial doubt about the Registrant’s ability to continue as a going concern, as identified in the Annual Report, continues to apply, and Old Z Squared’s historical financial statements have also reflected substantial doubt about its ability to continue as a going concern.

The Annual Report and the registrant’s audited financial statements for the year ended December 31, 2025 contained an explanatory paragraph from the registrant’s independent registered public accounting firm expressing substantial doubt about its ability to continue as a going concern. As disclosed in the Registration Statement, Old Z Squared’s historical financial statements have similarly reflected substantial doubt about Old Z Squared’s ability to continue as a going concern. Neither the Merger nor the Spin-Out, individually, has eliminated those concerns. The Company’s ability to continue as a going concern depends on its ability to achieve and sustain profitability in its crypto asset mining business, generate cash flow from operations, and access the capital markets on acceptable terms. There is no assurance that the Company will be able to do so.

Risks Related to Potential Strategic Transactions and Strategic Shifts in Our Business

We may not complete the acquisition of Paradox Data, LLC, and even if completed it may not deliver the expected benefits.

On July 31, 2026, we entered into a Membership Interest Purchase Agreement to acquire 100% of the membership interests of Paradox Data, LLC, including its Union County Campus in El Dorado, Arkansas. Closing remains subject to customary and transaction-specific conditions, including completion of pre-closing asset and real-property transfers, release of liens, negotiation and execution of a building leaseback, and other deliverables. Although closing is targeted within 30 days of signing, the outside date is September 30, 2026 (extendable under specified circumstances to December 31, 2026). There can be no assurance that all conditions will be satisfied or waived, or that the acquisition will close on the contemplated timeline or at all.

Even if the acquisition closes, the existing electric service arrangement with Entergy Arkansas provides for energy service of up to approximately 8 MW. Our ability to expand capacity depends on factors largely outside our control, including the timing and outcome of interconnection requests and Requests for Service, utility processes, permitting, construction and equipment lead times, availability and cost of on-site generation, and the ability to secure necessary development capital. We currently have no binding customer commitments for capacity at the site. Failure to obtain required approvals, delays in interconnection or construction, cost overruns, or an inability to attract offtake could prevent us from achieving meaningful expansion beyond the existing 8 MW.

The contingent portion of the consideration (up to an additional $20 million of Series A Convertible Preferred Stock) is payable upon achievement of specified development milestones: initial energization of AI compute capacity at the existing site, followed by aggregate capacity thresholds of 50 MW, 100 MW, and 150 MW (generally earned in installments upon binding requests for service and subsequent energization). These milestone payment obligations do not expire. There can be no assurance that any or all of these milestones will be achieved on the expected timeline or at all. Failure to achieve the milestones would reduce the total consideration paid but would also mean the site does not deliver the scale of artificial intelligence and high-density compute capacity to meet our long-term expansion objectives.

The issuance of Series A Convertible Preferred Stock (both the $5 million issued at closing and any milestone shares) will result in dilution to existing stockholders. The preferred stock also carries an 8.0% annual dividend (payable in cash or in kind at our election). Conversion of the preferred stock is fixed at $7.45 per share; conversion of milestone preferred is based on a variable formula tied to then-current market prices (subject to Nasdaq Minimum Price rules and other adjustments). Because the conversion price of the milestone preferred is variable, a decline in the market price of our common stock prior to a milestone achievement date could result in a greater number of shares being issued and therefore greater dilution. Conversion is also subject to beneficial-ownership limitations and a 19.99% cap (unless stockholder approval under Nasdaq rules is obtained). In addition, our Chief Technology Officer holds an indirect interest in the seller and certain affiliates entitled to receive a portion of the milestone consideration. Although the transaction was approved by our Audit Committee and Board as a related-person transaction, the existence of this interest could present actual or perceived conflicts and may affect the perception of the transaction among investors..

We may not complete other pending or potential acquisition opportunities, including the previously announced Skycore transaction.

We have also previously entered into a binding letter of intent regarding a potential acquisition of Skycore Digital LLC. We have since made material amendments to that binding letter of intent, including extension of the drop-dead date to January 15, 2027, the elimination of the $500,000 break-up fee that would be payable by us and termination of all exclusivity, no-shop, non-solicitation, and related obligations. As a result, neither party is currently bound by exclusivity or a break-up fee, and the transaction remains subject to negotiation of definitive agreements, due diligence, and the satisfaction of any closing conditions that may be agreed to, and may not be consummated on the contemplated terms, or at all. We may pursue additional acquisition or investment opportunities in the digital infrastructure and power sectors. Any such transactions involve significant risks, including integration difficulties, overpayment, assumption of unknown liabilities, dilution, and the diversion of management attention. There can be no assurance that any pending or future acquisition will be completed or will achieve the anticipated strategic or financial benefits.

The Company faces meaningful execution and integration risk from the Merger and the pending strategic transactions described above.

Concurrent integration of the Merger, the Spin-Out, the pending Paradox transaction, and any other strategic transactions undertaken by the Company will place significant demands on management’s time and attention, operational and financial systems, and capital resources. Failure to successfully integrate these transactions could prevent the Company from realizing the anticipated benefits, divert management’s attention from existing operations, result in unforeseen liabilities or operational disruptions, and materially adversely affect the Company’s business, financial condition, and results of operations.

Our expansion into artificial intelligence infrastructure and data centers is subject to significant risks and uncertainties, and we have limited operating history in these businesses.

Our current strategy envisages expanding beyond our existing digital asset mining operations into the development and operation of artificial intelligence (“AI”) and high-density compute infrastructure, data centers and power generation capabilities. This expansion strategy depends on our ability to identify, acquire, and successfully control and convert energized power sites into facilities capable of supporting modern AI and high-density compute computing workloads. We have limited or no operating history in commercial data center development, high-density immersion cooling deployments, utility-scale interconnection processes, or securing long-term AI customer offtake. As a result, our ability to execute this strategy successfully is unproven. We also have limited or no operating history in the related power generation and data center development activities, nor the management expertise, capital resources, regulatory relationships, supplier relationships, and operational capabilities required to compete in these businesses, which differ materially from those required in the Company’s crypto asset mining business. The Company may be unable to develop the necessary expertise internally, hire and retain qualified personnel with relevant experience, secure required regulatory approvals and counterparty relationships, or commit the levels of capital required to make any of these business lines successful.

Successful expansion requires timely access to additional power capacity through utility interconnections, regulatory and permitting approvals, construction and equipment procurement on acceptable timelines and costs, availability of development capital, and the ability to attract binding customer commitments. Many of these factors are outside our control. Delays in interconnection queues, utility constraints, permitting challenges, construction cost overruns, supply-chain issues for specialized cooling or power equipment, or an inability to secure sufficient capital could prevent us from achieving our goals of operating data centers, achieving targeted capacity levels or render projects uneconomic.

Even if we successfully develop capacity, demand for AI infrastructure is highly competitive and can shift rapidly based on technology changes, customer capital spending, and broader market conditions. We currently generate no material revenue from AI infrastructure, data center, or power generation activities, and there can be no assurance that we will be able to convert developed capacity into profitable contracts or that any such contracts will materialize on the scale or terms we anticipate. Failure to execute our expansion strategy, or to do so on a cost-effective and timely basis, could materially and adversely affect our business, financial condition, results of operations, and the value of our common stock.

Our management team has limited experience developing, and no experience operating, commercial AI data centers.

Our executive team has limited experience developing high-density AI or data center infrastructure and no prior experience operating commercial AI data centers. While our Chief Technology Officer has relevant technical background in high-density immersion-cooled infrastructure and related compute systems, the broader management team’s primary experience is in digital asset mining, capital markets, finance, and real estate rather than the development, interconnection, construction, or ongoing operation of AI-ready data center facilities. Our management’s limited experience, coupled with our lack of operating history, in this business increases the risk that we may encounter unexpected challenges in project execution, cost control, technical performance, customer acquisition, or day-to-day operations, any of which could adversely affect our ability to successfully expand into AI infrastructure.

AI and high-density compute infrastructure, data center development, and power generation are capital-intensive activities that may require the Company to raise substantial additional capital on terms that are unfavorable or unavailable.

The development of AI and high-density compute infrastructure, data center development, and power generation capabilities requires substantial capital investment for site acquisition, construction or build-out, equipment procurement, regulatory and permitting compliance, and ongoing operations. Power generation facilities and data centers, in particular, are characterized by long development cycles and significant capital commitments before revenue is generated. The Company may be required to raise substantial additional capital through equity issuances (which would dilute existing stockholders), debt financings (which would impose servicing obligations and restrictive covenants), project finance arrangements (which may pledge specific assets and constrain operational flexibility), joint ventures, or other arrangements. There can be no assurance that such capital will be available to the Company on acceptable terms, or at all. If the Company is unable to access sufficient capital, the Company may be required to scale back, delay, or abandon planned expansion into these activities, which could materially adversely affect the Company’s business, financial condition, and results of operations.

The Company’s planned power generation business is subject to extensive federal and state regulatory requirements and exposure to volatile energy and commodity markets.

The development, ownership, and operation of power generation facilities in the United States are subject to extensive federal regulation by the Federal Energy Regulatory Commission (“FERC”) and the North American Electric Reliability Corporation (“NERC”), state regulation by public utility commissions, and a complex framework of environmental laws and regulations administered by the U.S. Environmental Protection Agency and state environmental agencies. Operation of generation assets within organized wholesale electricity markets, including the markets operated by ERCOT and other regional transmission organizations and independent system operators, exposes the Company to additional regulatory and market participation requirements. The Company’s planned power generation business will also be subject to material commodity-price exposure (including with respect to natural gas, fuel oil, and other inputs), wholesale electricity price volatility, transmission constraints, curtailment risk, weather-driven supply and demand imbalances, and forced-outage and equipment-failure risk. Any failure to obtain or maintain required regulatory approvals, comply with applicable environmental laws, or manage commodity-price and market-participation risks could materially adversely affect the Company’s power generation operations and the broader business.

The Company’s planned data center development business faces significant site, construction, permitting, and customer-acquisition risk, and competes against well-capitalized incumbents.

The development of data center facilities involves site identification and acquisition, securing adequate and reliable electric power capacity (which in many U.S. markets requires multi-year utility interconnection queues), water access for cooling, fiber and network connectivity, local and state permitting (including environmental review, water-use approvals, and zoning), construction of substantial physical infrastructure, and the procurement and integration of cooling, power distribution, fire suppression, and physical and cyber security systems. The Company’s data center development efforts will compete against established hyperscale cloud providers, dedicated colocation and data-center operators, and other digital infrastructure companies, many of which have substantially greater capital resources, longer operating histories, established customer relationships, dedicated development teams, and existing positions in scarce power and connectivity markets. The Company may not be able to secure adequate sites, power capacity, or financing on competitive terms, may experience cost overruns or construction delays, may be unable to attract sufficient hosting customers at acceptable pricing, and may face declining demand or pricing pressure as a result of overbuild in the industry.

The Company’s planned expansion into AI infrastructure, including data center development and operation, is dependent on continued strong demand for AI and machine learning compute capacity, access to scarce specialized hardware, and the ability to compete with established providers.

The Company’s plans and efforts to expand into AI and high-density compute infrastructure are intended to serve customers requiring graphics processing unit (“GPU”), tensor processing unit, and other specialized compute capacity for AI, machine learning, scientific computing, and similar workloads. This business line is subject to a number of specific risks, including: (i) the level and durability of customer demand for high-density compute capacity, which is presently driven substantially by demand for AI and machine learning training and inference workloads and may decline or become more cyclical as the market matures; (ii) access to specialized hardware, which is currently constrained by the supply chain and allocation policies of a small number of dominant suppliers; (iii) the technical requirements of high-density compute hosting (including high power densities, liquid cooling, and high-bandwidth networking), which differ materially from the requirements of crypto asset mining and conventional data center hosting and may require the Company to retrofit or purpose-build facilities to support such workloads; (iv) the credit risk, contract negotiating leverage, and customer concentration risk associated with large hyperscale and artificial-intelligence-focused customers; and (v) competition from established AI and high-density compute hosting providers and the hyperscale cloud providers, many of which have greater scale, longer-standing customer relationships, and existing access to scarce hardware. The Company may not be able to compete effectively in this business line, and the financial returns from the business line may be lower than anticipated or may not be realized.

Concurrent pursuit of crypto asset mining and the development of AI and high-density compute infrastructure, data centers and power generation capabilities may strain the Company’s management, capital, and operational resources.

The Company’s current plans contemplate building expanding beyond crypto asset mining into integrated AI and high-density compute infrastructure, data center development and power generation capabilities. While these activities are intended to be complementary in certain respects (for example, owned power generation can supply mining and data center operations, and existing mining infrastructure may, in certain cases, be repurposable for high-density compute hosting), the simultaneous pursuit of multiple distinct business lines will require the Company to allocate management attention, capital, and operational resources across competing demands. The Company’s failure to set appropriate priorities, allocate capital efficiently, identify and retain qualified personnel for each business line or activity, develop the operational capabilities needed to support multiple activities, or execute on each business plan could prevent the Company from achieving its strategic objectives in its current line of business or its planned activities and could materially adversely affect the Company’s business, financial condition, and results of operations.

Risks Related to Our Capital Requirements and Capital Structure

Future sales of substantial amounts of our common stock, including shares distributed by BSG to its former members, could adversely affect the market price.

A large number of shares issued in the Business Combination were distributed by BSG to its members on April 30, 2026. Those shares remain subject to contractual lock-up and leak-out restrictions under the Asset-For-Share Exchange Agreement. The expiration or modification of those restrictions, or sales by other large holders, could result in significant resale volume and depress the market price of our common stock.

Nasdaq may delist our securities from trading on its exchange.

Our common stock is listed on the Nasdaq Global Market. To maintain that listing we must continue to meet Nasdaq’s continued-listing requirements, including, among others, a minimum bid price of $1.00 per share and a minimum Market Value of Listed Securities (“MVLS”) of $50 million (or such other threshold as may apply under the applicable Nasdaq listing standards). We previously received a Nasdaq deficiency notice regarding the minimum bid price requirement and subsequently regained compliance. There can be no assurance that we will continue to satisfy the minimum bid price, MVLS, or any other continued-listing requirement. If we fail to meet these standards, Nasdaq could delist our securities. A delisting would likely have a negative effect on the price of our securities, reduce liquidity, and could impair investors’ ability to sell or purchase our securities when they wish to do so. In addition, if our securities are delisted and are not eligible for listing on another national securities exchange, they may be quoted only on an over-the-counter market, which could further reduce liquidity and subject us to additional trading restrictions, including possible characterization as a “penny stock.”

Holders of the Company’s common stock have experienced and may continue to experience significant dilution.

In connection with the closing of the Merger, the Company issued an aggregate of 43,877,497 shares of common stock to the former stockholders of Z Squared, increasing the Company’s outstanding shares of common stock from 6,553,996 at March 31, 2026 to 51,431,493 at May 12, 2026 and was 53,000,397 at June 30, 2026. This represents substantial dilution to the holders of the Company’s common stock prior to the Merger. Additional dilution may result from (i) the conversion of any Convertible Preferred Stock issued in connection with the potential Paradox or SkyCore acquisitions, (ii) the issuance of common stock under the Company’s 2025 Incentive Compensation Plan and any other equity plans of the Company, (iii) the exercise of outstanding warrants (including legacy Public Warrants and Private Placement Warrants outstanding since the initial public offering of Coeptis (i.e., the legal entity surviving the Merger) in November 2020), (iv) the exercise of outstanding stock options, and (v) the issuance of common stock in connection with any future financings, acquisitions, or strategic transactions. The market price of the Company’s common stock could decline as a result of any such dilution or anticipated dilution.

Existing material warrants of the Company’s predecessor remain outstanding and may dilute holders of the Company’s common stock.

As of June 30, 2026, the Company had outstanding (i) 375,000 public warrants exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at an exercise price of $230.00 per share, issued in connection with the November 2020 initial public offering of Bull Horn Holdings Corp., the registrant’s predecessor (the “Public Warrants”), and (ii) 187,500 private placement warrants exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at the same exercise price, issued to the sponsor and underwriters in that initial public offering (the “Private Placement Warrants”). Each of the Public Warrants and the Private Placement Warrants will expire by their terms in October 2027. Although the exercise prices currently exceed the trading price of the Company’s common stock, any future increase in the trading price above the exercise price could result in exercises and consequent additional dilution.

Risks Related to Tax and Regulatory Matters

The Company’s ability to utilize its net operating loss carryforwards may be substantially limited as a result of the Merger.

As of December 31, 2025, the Company (then Coeptis Therapeutics Holdings, Inc.) had significant net operating loss carryforwards for U.S. federal and state income tax purposes. The Merger constituted an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company’s ability to use its pre-Merger net operating loss carryforwards and certain other tax attributes to offset future taxable income will be substantially limited under Section 382, which could result in increased future tax liability and reduced cash flow. In addition, as discussed in the Registration Statement and in Notes 16 and 17, the Spin-Out was intended to be treated as a distribution under Section 301 of the Code, and any amount in excess of the Company’s earnings and profits will be applied against and reduce a holder’s basis in its common stock, with any amount in excess of basis treated as gain. The ultimate tax characterization of the Spin-Out, the related basis allocation, and the limitations on use of net operating loss carryforwards are subject to factual determinations and the application of complex tax rules, and the actual tax consequences to the Company and its stockholders may differ from those described in the Registration Statement.

The Company’s continued holding of GEAR Therapeutics, Inc. exposes the Company to regulatory, clinical, and intellectual property risks associated with the biopharmaceutical industry that are inconsistent with the Company’s principal business of crypto asset mining.

The Company’s interest in GEAR Therapeutics, Inc. (“GEAR”) was not included in the Spin-Out and continues to be held by the Company following the Merger. As a result, the Company remains exposed to the regulatory, clinical, intellectual property, competitive, and capital-requirements risks associated with the biopharmaceutical industry, as further described under the captions “Risks Related to Coeptis – Related to the Development and Regulatory Approval of Our Product Candidates” and “Risks Related to Coeptis – Risks Related to Regulation” in the Registration Statement, to the extent those risks apply to the operations of GEAR. These residual biopharmaceutical risks are inconsistent with the Company’s principal business of crypto asset mining and may result in the Company allocating management attention and capital to operations that are not aligned with the Company’s primary strategic focus. At the same time, the Company’s ability to significantly alter GEAR’s operations may be limited by the covenants in the Option Agreement, as more fully described in this Report under

The applicable filer status of the Company under SEC rules may change in future periods, which could increase the Company’s compliance costs and the timing requirements of its periodic reports.

The Company is currently a non-accelerated filer and smaller reporting company under Rule 12b-2 of the Securities Exchange Act of 1934. If the aggregate worldwide market value of the Company’s common equity held by non-affiliates as of the last business day of the Company’s second fiscal quarter exceeds applicable thresholds in future periods, the Company may become an accelerated filer or large accelerated filer and may cease to qualify as a smaller reporting company. Such a change in filer status would, among other things, accelerate the Company’s periodic-report filing deadlines, impose auditor attestation requirements on the Company’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, and increase the Company’s compliance costs.

Additional Considerations.

The risk factors described above and incorporated by reference herein are not exhaustive. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, may also materially adversely affect the Company’s business, financial condition, and results of operations.