Datacentrex, Inc.: Form 10-Q for the period ended Jun 30, 2025

This Quarterly Report on Form 10-Q (this “Quarterly Report”), including this Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product offerings geographically or through new marketing applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. In addition, even if our actual results are consistent with the forward-looking statements contained in this quarterly report, those results may not be indicative of results or developments in subsequent periods. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

• our ability to raise capital when needed and on acceptable terms and conditions;
• our ability to manage credit and debt structures from debt holders;
• our ability to generate revenues and manage the growth of our business;
• competitive pressures;
• general economic conditions;
• our ability to attract and retain management, and to integrate and maintain technical information and management information systems;
• our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market (“Nasdaq”); and
• compliance with laws and regulations, including those relating to corporate governance matters and tax matters, as well as any future changes to such laws and regulations.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. Investors, potential investors and other readers are urged to consider the above-mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results or performance.

OVERVIEW

Thumzup Media Corporation (“Thumzup” or “Company”) was incorporated on October 27, 2020, under the laws of the State of Nevada, and its headquarters is located in Los Angeles. The Company’s primary business is software as a service provider dedicated to connecting businesses with consumers and allowing the business to incentivize consumers to post about their experience on social media. Thumzup mission is to democratize social media marketing by connecting advertisers with non-professional people, who can be paid for their posts about products and services they love through its technology which utilizes a proprietary mobile app (the “App”). The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and is designed to connect advertisers with individuals who are willing to promote their products online.

The Thumzup App enables users to select a brand they want to post about on social media. Once the Thumzup user selects the brand and takes a photo (using the App), the App will post the photo and a caption to the user’s social media account(s). As of the date of this filing, Instagram is the Company’s initial social media platform that is being used, due to its wide acceptance and its great functionality using photographs. The Company expects to add other social media platforms in the future. For the advertiser, the Thumzup system enables brands to get real people to promote products to their friends, rather than displaying banner ads that consumers now mostly ignore, or contracting with expensive professional influencers. The Company has recorded nominal revenues during the three months ended June 30, 2025, and continues with the development of enhancements to its App and marketing efforts.

The Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, has elected to comply with certain reduced public company reporting requirements.

Recent Developments

American Ventures LLC Financial Advisory Agreement

On August 12, 2025, we entered into a Financial Advisory Agreement (the “American Ventures Advisory Agreement”) with American Ventures LLC, Series XVIII DOGE TREAS (the “Advisor”) pursuant to which the Advisor agreed to provide us with certain financial advisory services, including advising us on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, we agreed to issue the Advisor 750,000 shares (the “American Ventures Advisory Shares”) of common stock, which such shares of common stock are subject to Stockholder Approval (as defined in the American Ventures Advisory Agreement). The American Ventures Advisory Agreement may be terminated by either party upon five days prior written notice to the other party.

August 2025 Offering

On August 11, 2025, we entered into a placement agency agreement (the “August 2025 Dominari Agreement”) with Dominari Securities LLC (the “Dominari”) pursuant to which we agreed to issue and sell directly to certain investors (the “Investors”), in a best efforts offering (the “August 2025 Offering”), an aggregate of 5,000,000 shares of our common stock.

The closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to us were approximately $50 million, before deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. We currently intend to use the net proceeds received from the August 2025 Offering to explore the accumulation of cryptocurrencies and mining equipment, working capital and general corporate purposes.

Pursuant to the August 2025 Dominari Agreement, we paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025 Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable expenses, and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including reasonable fees and expenses of its legal counsel in the amount of $150,000. Additionally, we issued warrants (the “August 2025 Dominari Warrants”) to Dominari to purchase up to 350,000 shares of common at an exercise price of $10.00 per share. The August 2025 Dominari Warrant will be exercisable 180 days after the issuance date and has a term of exercise equal to five years from the date of issuance.

Amendment to Bylaws

To maintain compliance with the laws of the state of Nevada, on July 16, 2025, the Board of Directors approved an amendment (the “Amendment”) to our Amended and Restated Bylaws (the “Bylaws”). Pursuant to the Amendment, Section 2.5 of Article II of the Bylaws was amended to provide that except as limited by our Articles of Incorporation or by law, a director may be removed by the stockholders only at an annual meeting of stockholders or at a special meeting of stockholders called for such purpose and otherwise in conformity with the Bylaws, and only by the affirmative vote of the holders of two-thirds of the voting power of all the shares entitled to vote at such meeting.

Withdrawal of Designation of Series B Convertible Preferred Stock

On July 18, 2025, we filed a Withdrawal of Designation (the “Withdrawal of Designation”) with the Secretary of State of the State of Nevada and terminated the designation of our Series B Preferred Convertible Voting Stock, par value $0.001 per share (the “Series B Preferred Stock”). At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred Stock issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.

Series C Preferred Stock Offering and Related Transactions

Series C Offering

On June 30, 2025, as part of a registered direct offering (the “Series C Offering”), we agreed to sell, pursuant to a securities purchase agreement dated June 30, 2025, by and among us and the investors named therein, an aggregate of 108,336 shares of Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”), par value $0.001 per share, at a price of $60.00 per share for gross proceeds of $6,499,980. Each share of Series C Preferred Stock converts into 10 shares of common stock. The aggregate net proceeds to us from the Series C Offering were approximately $6.04 million after deducting placement agent fees and offering expenses payable by us.

In connection with the Series C Offering, on June 30, 2025, we entered into a Placement Agency Agreement (the “June 2025 Dominari Agreement”) with Dominari.

Pursuant to the June 2025 Dominari Agreement, we paid Dominari a cash fee equal to 6% of the gross cash proceeds received in the Series C Offering and a 1% non-accountable expense allowance. In addition, we issued to Dominari warrants to purchase up to 65,000 shares of common stock, such amount being equal to equal to 6% of the shares of common stock issuable upon conversion of the Series C Preferred Stock sold in the Series C Offering (the “June 2025 Dominari Warrants”). The June 2025 Dominari Warrants may be exercised on or after January 3, 2026, have an exercise price of $6.00 per share, are non-tradeable and expire on July 8, 2030.

Related Series C Transactions

In connection with the Series C Offering, Robert Steele, our Chief Executive Officer, agreed to sell 2,500,000 shares of common stock (the “Private Transaction Shares”) in a private transaction to certain accredited investors who were purchasers in the Series C Offering. The purchase price of the Private Transaction Shares was $0.50 per share and Mr. Steele received $1,250,000 in aggregate net proceeds from the sale of the Private Transaction Shares.

Additionally, pursuant to an Option Assignment Agreement dated June 19, 2025 (the “Option Assignment Agreement”), for $150,000, Hampton Growth Resources, LLC (the “Assignor”) sold an option to purchase 750,000 shares of our common stock at an exercise price of $0.30 per share (the “Option”) to certain accredited investors who participated in the Series C Offering (the “Assignees”). Mr. Andrew Haag, the brother of a member of our Board of Directors, Robert Haag, is a stockholder of the Company and the Managing Member of the Assignor. The Assignor agreed to purchase the Option for $125,000 from Mr. Daniel Lupinelli, a principal stockholder of the Company beneficially owing 14.47% of the outstanding common stock of the Company. Subsequent to the sale and assignment of the Option, the Assignees are expected to exercise the Option, purchasing 750,000 shares for the purchase price of $225,000, which will be paid to Mr. Lupinelli.

In relation to the aforementioned private transactions, we are obligated to file within 30 days, a registration statement on Form S-3 to register the resale of up to an aggregate of 3,250,000 shares of common stock, consisting of (i) the 2,500,000 Private Transaction Shares and (ii) 750,000 shares of common stock issuable upon the exercise in full of the Option.

Coinbase Master Loan Agreement

On May 12, 2025, the Company entered into that certain Master Loan Agreement (the “MLA”) with Coinbase Credit, Inc. (“Coinbase”) and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into transactions (each such transaction, a “Loan”) in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral (each as defined in the MLA). Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan, and Coinbase shall confirm such Loan by sending a confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase the Collateral with a market value at least equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA). See “Liquidity and capital resources – Coinbase Master Loan Agreement” herein.

Available Information:

Thumzup™ is located at 10557-B Jefferson Blvd, Culver City, CA 90232. Our telephone number is (800) 403-6150 and our Internet website address is www.thumzupmedia.com (http://www.thumzupmedia.com).

We file or furnish electronically with the U.S. Securities and Exchange Commission (“SEC”) Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make copies of these reports available free of charge through our investor relations website as soon as reasonably practicable after we file or furnish them with the SEC. These reports are also accessible through the SEC website at www.sec.gov (http://www.sec.gov). Information contained on or accessible through our website, www.thumzupmedia.com (http://www.thumzupmedia.com), is not incorporated into, and does not form a part of, this Quarterly Report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2025, AND 2024

The following table sets forth certain selected unaudited condensed consolidated statements of operations data for the three months ended June 30, 2025, and 2024.

24

Revenues

The Company generated revenues of $15 and $30 for the three months ended June 30, 2025, and 2024, respectively, a decrease of $15. The Company has prioritized expanding its footprint of listed businesses before focusing on converting them to paying clients.

Operating expenses

For the three months ended June 30, 2025, and 2024, the Company incurred operating expenses of $1,658,893 and $529,091, respectively, an increase of $1,129,802. The increase in operating expenses was caused by: marketing expenses increasing by $227,628 from $96,674 during the three months ended June 30, 2024, to $324,302 during the same period in 2025, general and administrative expenses increasing by $815,458 from $359,827 during the three months ended June 30, 2024, to $1,175,285 during the same period in 2025, depreciation and amortization expenses increasing by $19,201 from $22,925 during the three months ended June 30, 2024, to $42,126 during the same period in 2025, and an increase in research and development expenses of $67,515 from $49,665 during the three months ended June 30, 2024, to $117,180 during the same period in 2025.

Net Loss from operations

The Company realized a net loss from operations before income taxes of $1,658,878 and $529,061 for the three months ended June 30, 2025, and 2024, respectively, an increase of $1,129,817 for the reasons stated above in the section “Operating Expenses.”

Other income

For the three months ended June 30, 2025, and 2024, the Company had ($3,930) and $1,288 in interest (expense) and income, respectively. There was loss on the impairment on intangible assets (bitcoin) of $41,771 and $0 during the three months ended June 30, 2025, and 2024, respectively. Additionally, there was unrealized gains on intangible assets (bitcoin) of $511,339 and $0 during the three months ended June 30, 2025, and 2024, respectively.

Net Loss attributable to common stockholders

The Company realized a net loss attributable to common stockholders of $1,193,229 and $550,717 for the three months ended June 30, 2025, and 2024, respectively, an increase of $642,512 for the reasons stated above in the section “Operating Expenses.”

SIX MONTHS ENDED JUNE 30, 2025, AND 2024

The following table sets forth certain selected unaudited condensed consolidated statements of operations data for the six months ended June 30, 2025, and 2024.

25

Revenues

The Company generated revenues of $166 and $435 for the six months ended June 30, 2025, and 2024, respectively, a decrease of $269. The Company has prioritized expanding its footprint of listed businesses before focusing on converting them to paying clients.

Operating expenses

For the six months ended June 30, 2025, and 2024, the Company incurred operating expenses of $3,394,956 and $857,445, respectively, an increase of $2,537,511. The increase in operating expenses was caused by: marketing expenses increasing by $884,810 from $148,440 during the six months ended June 30, 2024, to $1,033,250 during the same period in 2025, general and administrative expenses increasing by $1,510,974 from $581,7555 during the six months ended June 30, 2024, to $2,092,729 during the same period in 2025, depreciation and amortization expenses increasing by $36,175 from $40,163 during the six months ended June 30, 2024, to $76,338 during the same period in 2025, and an increase in research and development expenses of $105,552 from $87,087during the six months ended June 30, 2024, to $192,639 during the same period in 2025.

Net Loss from operations

The Company realized a net loss from operations before income taxes of $3,394,790 and $857,010 for the six months ended June 30, 2025, and 2024, respectively, an increase of $2,537,780 for the reasons stated above in the section “Operating Expenses.”

Other income

For the six months ended June 30, 2025, and 2024, the Company had $21,678 and $1,288 in interest income, respectively. There was loss on the impairment on intangible assets (bitcoin) of $579,049 and $0 during the six months ended June 30, 2025, and 2024, respectively. Additionally, there was unrealized gains on intangible assets (bitcoin) of $624,745 and $0 during the six months ended June 30, 2025, and 2024, respectively.

Net Loss attributable to common stockholders

The Company realized a net loss attributable to common stockholders of $3,348,316 and $881,432 for the six months ended June 30, 2025 and 2024, respectively, an increase of $2,466,884 for the reasons stated above in the section “Operating Expenses.”

Liquidity and capital resources

As of June 30, 2025, and December 31, 2024, the Company had cash in the amount of $60,430 and $4,680,840, respectively. As of June 30, 2025, and December 31, 2024, the Company had stockholders’ equity of $1,823,045 and $4,767,261, respectively.

The Company’s accumulated deficit was $(13,040,024) and $(9,691,708) as of June 30, 2025, and December 31, 2024, respectively.

The Company used net cash in operating activities of $2,664,485 and $675,323 for six months ended June 30, 2025, and 2024, respectively.

Net cash used in investing activities for six months ending June 30, 2025, and 2024 was $2,157,718 and $126,665, respectively. During the six months ended June 30, 2025, we invested $2,001,246 and $156,471 in the purchase of intangible assets (bitcoin) and capitalized development costs, respectively. During the six months ended June 30, 2024, we invested $126,665 in capitalized development costs.

There was cash used in financing activities for the six months ended June 30, 2025, of $201,793, comprised of cash used to repurchase treasury stock of $298,207 and cash provided by a Coinbase BTC loan of $500,000. Net cash provided by financing activities was $941,226 for the six months ended June 30, 2024, comprised of $805,000 from the sale of preferred stock and $161,226 from the sale of common stock, net offering expenses of $25,000.

Capital Resources

As of June 30, 2025, we had cash on hand of $60,430. We currently have minimal sources of liquidity such as arrangements with credit institutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

Series A Preferred Stock

On September 21, 2022, we entered into a Securities Purchase Agreement with four accredited investors (the “Series A Securities Purchase Agreement”). Pursuant to the Series A Securities Purchase Agreement, the company sold 16,446 Shares of its Series A Preferred Convertible Voting Stock (the “Series A Preferred”) at a per share price of $45.00 per preferred share and received gross proceeds of $740,000.

On September 21, 2022, the Company filed with the Secretary of State of Nevada the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock, which was amended and restated on September 26, 2022 (the “Series A Certificate of Designation”).

Pursuant to the Certificate of Designations, the Company designated 1,000,000 shares of preferred stock as Series A Preferred. The Series A Preferred votes together with the common stock of the Company on an as-converted basis, provided that each holder of Series A Preferred shall be limited to voting the number of votes that is 9.99% of all shares entitled to vote, except as required by law.

Subject to the provisions of Section 4 of the Series A Certificate of Designation, each holder shall have the right, at any time and from time to time, at such holder’s option, to convert any or all of such holder’s shares of Series A Preferred into the number of shares of common stock as set forth herein. Each share of Series A Preferred initially converts into 15 shares of common stock (the “Conversion Rate”) at a reference rate of $3.00 per share of common stock (the “Reference Rate”) subject to adjustments set forth in Sections 4(g) and (h) of the Series A Certificate of Designation.

The holders of Series A Preferred shall be entitled to receive, in cash or in-kind at Company’s election, in an amount equal to $3.50 per share. If paid in kind, the dividend shall be in shares of Series A Preferred (the “Series A Dividend Shares”) valued at the $45.00 per share of Series A Preferred (the “Purchase Price”) unless the closing price of the common stock on the trading day prior to the issuance of the dividend is below the Reference Rate, in which case the Series A Dividend Shares shall be valued at the Purchase Price adjusted pursuant to the formula set forth in Section 3 of the Series A Certificate of Designations.

The Series A Preferred was offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act.

Under the Series A Certificate of Designations, at no time may all or a portion of the Series A Preferred be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the Holder at such time, the number of shares of Common Stock that would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the 1934 Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time (the “4.99% Beneficial Ownership Limitation”); provided, however, that, upon the holder providing the Company with sixty-one (61) days’ advance notice (the “4.99% Waiver Notice”) that the holder would like to waive Section 4(f) of the Series A Certificate of Designations with regard to any or all shares of common stock issuable upon conversion of the Series A Preferred, Section 4(f) will be of no force or effect with regard to all or a portion of the Series A Preferred referenced in the 4.99% Waiver Notice but shall in no event waive the 9.99% Beneficial Ownership Limitation.

Series B Preferred Stock

On March 5, 2024, the Company filed a Certificate of Designation (the “Series B Certificate of Designation”) with the Secretary of State of Nevada designating 40,000 shares of preferred stock as Series B Preferred Stock (“Series B Preferred”).

The Company recently raised $805,000 in a Series B Preferred offering during the period March - May 2024. Each share of Series B Preferred cost $50 and initially converts into 10 shares of common stock and pays a 10% dividend on a quarterly basis and has downside price protection. Once the company up-lists on a National Stock Exchange, the Series B Preferred converts at a 20% discount to the price of the offering in this S-1 and the downside price protections are eliminated. There is a call provision that goes into effect six (6) months from the listing on a National Exchange, that if the common stock trades at a 100% premium to the conversion price for 10 days or more, the Company can force the conversion of the Series B Preferred into common stock. The Company has agreed to pay the costs of Rule 144 legal opinions for the holders of the Series B Preferred.

Pursuant to the Series B Certificate of Designations, each holder of the Series B Preferred has the right, at any time and from time to time, at the shareholder’s option to convert any or all of such holder’s shares of Series B Preferred into the number of shares of Common Stock. Each share of Series B Preferred is initially convertible into 10 shares of common stock at a reference rate of $5.00 per share of Common Stock, subject to adjustments to set forth in the Series B Certificate of Designations.

Upon the Company’s up-listing to Nasdaq, the Series B Preferred became convertible at $4.00 per share and the downside price protections were eliminated. On March 29, 2025, certain call protection provisions in the Series B Preferred went into effect, providing that if the common stock trades at a 100% premium to the conversion price of the Series B Preferred for 10 days or more, the Company can force the conversion of the Series B Preferred into shares of common stock. The Company has agreed to pay the costs of Rule 144 legal opinions for the holders of the Series B Preferred.

The holders of Series B Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $1.25 per share per quarter. If paid in kind, the number of shares of common stock issued for the dividend shall be equal to the quotient of the dividend payable divided by the volume weighted average price on the dividend date. The Series B Preferred was offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act.

On July 18, 2025, we filed the Withdrawal of Designation with the Secretary of State of the State of Nevada and terminated the designation of our Series B Preferred. At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred Stock issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.

Series C Preferred Stock

On June 17, 2025, the Company filed a Certificate of Designation (the “Series C Certificate of Designation”) with the Secretary of State of Nevada designating 200,000 shares of preferred stock as Series C Preferred Stock. On June 30, 2025, the Company filed an Amended Series C Certificate of Designation which provides that except as otherwise required by the Nevada Revised Statutes, the holders of Series C Preferred Stock shall have no voting rights with respect to such shares.

The Series C Preferred Stock is functionally the same as our common stock except for the inclusion of either, at the election of the holder, a 4.99% or 9.99% beneficial ownership equity blocker and a liquidation preference in the event of a Liquidation Event (as defined in the Series C Certificate of Designation) so that before any amount shall be paid to the holders of any of shares of junior stock, the holders of the Series C Preferred Stock shall receive a number of shares of Series C Preferred Stock equal to the amount per share such holder would receive if such holder converted such Series C Preferred Stock into common stock immediately prior to the date of such payment.

General. The Series C Certificate of Designation for authorizes 200,000 shares of Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $60.00. Each share of Series C Preferred Stock is convertible into 10 shares of our common stock, subject to certain adjustments. The initial conversion price of the Series C Preferred Stock is $6.00 per share of common stock.

Exchange Listing. There is no trading market available for the Series C Preferred Stock. We do not intend to list or quote the Series C Preferred Stock on any securities exchange or nationally recognized trading system.

Ranking. The Series C Preferred Stock ranks junior to the Series A Preferred and Series B Preferred, but ranks senior to our common stock and any preferred stock issued after the Series C Preferred Stock. In the event of the merger or consolidation of the Company with or into another entity, the Series C Preferred Stock shall maintain its relative rights, powers, designations, privileges and preferences provided for in the Series C Certificate of Designation. In the event of a liquidation of the Company, the holders of Series C Preferred Stock will share in the distribution of our net assets on an as-converted basis.

Voting. Except as otherwise required by the Nevada Revised Statutes, the holders of Series C Preferred Stock shall have no voting rights with respect to such shares.

On July 8, 2025, in connection with the Series C Offering, we sold an aggregate of 108,333 shares of Series C Preferred Stock, convertible into 1,083,333 shares of our common stock, at $60.00 per share (each share of Series C is convertible into 10 shares of common stock) on a best-efforts basis for aggregate gross proceeds of $6,499,980 prior to deducting placement agent fees and offering expenses payable by us. The net proceeds to us from the Series C Offering were approximately $6.04 million after deducting placement agent fees and offering expenses payable by us. There is currently no established public market for the Series C Preferred Stock, and we do not expect a market to develop. The Series C Preferred Stock contains a beneficial ownership limitation, pursuant to which a holder may not convert the Series C Preferred Stock into common stock to the extent that, after such conversion, the holder (together with its affiliates) would beneficially own more than either 4.99% or 9.99% of our outstanding common stock, as initially elected by the holder.

Robert Steele Private Transactions

On July 8, 2025, simultaneously with the closing of the Series C Offering, Mr. Robert Steele, the Company’s Chief Executive Officer, agreed to sell 2,500,000 shares of common stock (the “Private Transaction Shares”) to certain accredited investors who participated in the Series C Offering. The purchase price of the Private Transaction Shares was $0.50 per share and Mr. Steele received $1,250,000 in aggregate net proceeds from the sale of the Private Transaction Shares. We have agreed to register the resale of the Private Transaction Shares with the Securities and Exchange Commission within 30 days of the closing of the offering of the Private Transaction Shares.

American Ventures LLC Financial Advisory Agreement

On August 12, 2025, we entered into the American Ventures Advisory Agreement with the Adivsor, pursuant to which the Advisor agreed to provide us with certain financial advisory services, including advising us on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, we agreed to issue the Advisor the American Ventures Advisory Shares, which such shares of common stock are subject to Stockholder Approval.

August 2025 Offering

On August 11, 2025, we entered into the August 2025 Dominari Agreement with Dominari, pursuant to which we agreed to issue and sell directly to the Investors in the August 2025 Offering, an aggregate of 5,000,000 shares of our common stock.

The closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to us were approximately $50 million, before deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. We currently intend to use the net proceeds received from the August 2025 Offering to explore the accumulation of cryptocurrencies and mining equipment, working capital and general corporate purposes.

Pursuant to the August 2025 Dominari Agreement, we paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025 Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable expenses, and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including reasonable fees and expenses of its legal counsel in the amount of $150,000. Additionally, we the August 2025 Dominari Warrants to Dominari to purchase up to 350,000 shares of common at an exercise price of $10.00 per share. The August 2025 Dominari Warrant will be exercisable 180 days after the issuance date and has a term of exercise equal to five years from the date of issuance.

Option Assignment

On July 8, 2025, simultaneously with the closing of the Series C Offering, pursuant to the Option Agreement, the Assignor sold the Option to the Assignees. The sale price of the Option was $150,000. Mr. Andrew Haag, the brother of Mr. Robert Haag, a member of our Board of Directors, is a stockholder of the Company and the Managing Member of the Assignor. The Assignor had previously purchased the Option for $125,000 from Mr. Daniel Lupinelli, a principal stockholder of the Company beneficially owing 14.47% of the outstanding Common Stock of the Company as of June 16, 2025. Within 30 days of the closing of the Option sale, the Company has agreed to register within 30 days, the resale of the underlying shares of common stock issuable upon the full exercise of the Option.

Coinbase Master Loan Agreement

On May 12, 2025, the Company entered into that certain MLA with Coinbase and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into Loans in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral. Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan (which terms may be amended by mutual agreement of the parties), including (i) the Digital Asset (as defined in the MLA) or currency of any Cash to be lent, (ii) the quantity of the Digital Asset or Cash to be lent, (iii) the Loan Fee Rate (as defined in the MLA) to be paid by the Company to Coinbase, (iv) the type and amount of fees to be charged (if any), (v) the type and amount of Collateral to be transferred by the Company to Coinbase, (vi) the day on which the Loan is to commence, (vii) whether the Loan is for a fixed term or open, and if for a fixed term the term and maturity date of the Loan, and (viii) any additional terms, and Coinbase shall confirm such Loan by sending a confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase Collateral with a market value at least equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA).

The Company has agreed to pay Coinbase a loan fee (the “Loan Fee”) owed on each Loan, and Coinbase shall pay the Company any fee or amount owed, if applicable. Any Loan Fee payable hereunder will be calculated daily based on a 365-day year for the actual number of days a Loan is open, by reference to the Loaned Assets outstanding on each day under a Loan, based on the Loan Fee Rate and subject to the terms of the MLA. Additionally, Coinbase will be entitled to receive all Distributions (as defined in the MLA) made on or in respect of the Loaned Digital Assets (as defined in the MLA) which are not otherwise received by Coinbase, to the full extent it would be so entitled if the Loaned Digital Assets had not been lent to the Company.

Pursuant to the terms of the MLA, each of the Company and Coinbase have agreed that promptly upon (and in any event within five business after) demand by either party, the other party will furnish the demanding party with its most recent audited and unaudited financial statements and any other financial statements mutually agreed upon by the Company and Coinbase, and subject to certain conditions. The MLA additionally contains certain customary events of default, including but not limited to (i) if the Company fails to transfer any Loaned Assets to Coinbase upon termination of the Loan as required by the MLA, (ii) if Coinbase fails to transfer any Collateral to the Company upon termination of the Loan as required by the MLA, (iii) if an insolvency event occurs with respect to either the company or Coinbase, (iv) if either party notifies the other of its inability to or its intention not to perform its obligations pursuant to the MLA or otherwise disaffirms, rejects or repudiates any of its obligations pursuant to the MLA, and (v) If any representation made by either party in respect of the MLA or any Loan or Loans pursuant to the MLA is incorrect or untrue in any material respect during the term of any Loan made pursuant to the MLA. If such Events of Default occur, the Coinbase will have the right to, among others and in addition to any other remedies provided in the MLA (a) purchase a like amount of Loaned Digital Assets (“Replacement Digital Assets”) in a commercially reasonable manner, (b) to sell any Collateral in a commercially reasonable manner, (c) freeze or otherwise suspend access to the Collateral, Accounts and/or certain accounts and (d) to apply and set off the Collateral and any proceeds thereof against the payment of the purchase price for such Replacement Digital Assets and any amounts due to Coinbase pursuant to the MLA.

Shareholder Action by Majority Consent – April 2025

On April 29, 2025, holders of a majority of the outstanding voting securities of the Company approved the following actions by majority consent: (i) electing five directors to serve until our next annual meeting of Stockholders or until their successor is duly elected and qualified; (ii) approving the Company’s 2025 Equity Incentive Plan (the “2025 Plan”) and the reservation of up to 2,000,000 shares of the Company’s Common Stock, par value $0.001 (the “Common Stock”) for issuance thereunder, subject to certain conditions; (iii) ratifying the appointment of Haynie & Company as our independent registered public accounting firm for the fiscal year ending December 31, 2025; (iv) approving, on an advisory basis, the compensation paid to our named executive officers; (v) approving the issuance of securities in one or more non-public offerings where the maximum discount at which securities will be offered will be equivalent to a discount of 20% below the market price of our common stock, as required by and in accordance with Nasdaq Marketplace Rule 5635(d); and (vi) approving any change of control that could result from the potential issuance of securities in the non-public offerings following effectiveness of Action No. 5, as required by and in accordance with Nasdaq Marketplace Rule 5635(b). The foregoing actions will become effective no sooner than 20 days after a definitive Information Statement has been distributed to the shareholders of the Company.

Contractual Obligations

Our contractual obligations are included in our notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report. To the extent that funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings. No assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

Inflation

The Company’s results of operations have not been affected by inflation and management cannot predict the impact, if any, inflation might have on its operations in the future.

Cybersecurity

Risk Management and Strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.

Oversee Third-party Risk

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.

Risks from Cybersecurity Threats

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.

Known Trends, Events and Uncertainties

The Company is subject to risks and uncertainties common to companies in the technology and social media industry, including but not limited to, development by competitors of new products and applications, dependence on key personnel, protection of proprietary technology, and the ability to secure additional capital to fund operations. In addition, the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflict between Israel and Hamas, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. For a further discussion of factors that may affect future operating results see the sections entitled “Risk Factors.”

Other than as discussed above and elsewhere in this report, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e)) (the “Exchange Act”). Based on the foregoing evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in its reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management, including our principal executive officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2025, based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 Framework). Based on this evaluation, our principal executive officer and principal financial officer have concluded that our internal controls over financial reporting as of June 30, 2025, were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in internal controls over financial reporting during the three and six months ended June 30, 2025.

Inherent Limitations of the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

The following description of risk factors includes any material changes to risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Quarterly Report. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report.

Our indebtedness could adversely affect our financial health and prevent us from fulfilling our debt obligations.

In May 2025, we entered into the MLA with Coinbase and Coinbase, Inc. pursuant to which Coinbase may lend us certain digital assets or cash. As of the date of this Quarterly Report, we have received $500,000 under the MLA and the principal amount outstanding as of the date of this Quarterly Report is $500,000. The borrowings under the Master Loan are collateralized by approximately $1.25 million of bitcoin as of the date of this Quarterly Report.

Our indebtedness could, among others:

• increase our vulnerability to general adverse economic and industry conditions;
• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
• place us at a competitive disadvantage compared to our competitors that have less debt;
• result in greater interest rate risk and volatility;
• limit our ability to borrow additional funds; and
• make it more difficult for us to satisfy our obligations with respect to our debt, including our obligation to repay the MLA under certain circumstances, or refinance our indebtedness on favorable terms or at all.

In addition, if the value of bitcoin declines precipitously, the value of our collateral under the MLA would also decline. In such case, we could be required to provide Coinbase with additional collateral. If we are unable to do so, we could default under the MLA, which could have a material adverse effect on our operations, liquidity, financial condition, and results of operations.

Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory, and other factors. We will be unable to control many of these factors, such as economic conditions. We cannot be certain that we will continue to have sufficient capital to allow us to pay the principal and interest on our outstanding debt and meet any other obligations. If we do not have enough money to service our debt, we may be required, but unable to refinance all or part of our existing debt, sell assets, borrow money, or raise equity on terms acceptable to us, if at all, and Coinbase could sell any collateral in a commercially reasonable manner and freeze certain of our accounts, among other measures.