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

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.

Cautionary Note Regarding Forward Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this report are forward-looking statements. The forward-looking statements in this report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. In some cases, you can identify these forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements include, but are not limited to, statements concerning the following:

• Our ability to raise capital is necessary to sustain our anticipated operations and implement our business plan,
• Our ability to implement our business plan,
• Our ability to generate sufficient cash to survive,
• The degree and nature of our competition,
• The lack of diversification of our business plan,
• The general volatility of the capital markets and the establishment of a market for our shares,
• Disruption in the economic and financial conditions primarily from the impact of past terrorist attacks in the United States, threats of future attacks, police, and military activities overseas and other disruptive worldwide political and economic events and environmental weather conditions, and
• Our ability to implement our bitcoin treasury strategy and its effects on our business.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 28, 2025. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable and the information included in this report is accurate, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

Overview

Healthcare Operations

KindlyMD is a patient-first healthcare and healthcare data company redefining value-based care and patient-centered medical services. Formed in 2019, the Company leverages data analysis to deliver evidence-based, personalized solutions in order to reduce opioid use, improve health outcomes faster, and provide algorithmic guidance on the use of alternative medicine in healthcare.

We collect and analyze valuable data on alternative treatments as well as biopsychosocial factors to provide better health outcomes faster. This results in valuable data for patients, the company, and the company’s investors as we aim to become a leading source of evidence-based assessment and treatment data in the fight for patients against the opioid epidemic and as we strive to be a leader in redefined value-based care.

The Company’s unique value proposition is to provide a patient-focused healthcare experience that integrates traditional medical evaluation and management with mental health integration and compliant alternative medicine education and inclusion. We focus on creating personalized care plans for each individual that get people back to work and life faster, reduce opioid use, and have high patient satisfaction. The Company believes these methods to be superior in managing the root cause of symptoms and improving health outcomes faster. The company’s competitive advantage lies in its integrated approach to health care services combined with a deep commitment to capturing and utilizing patient data to drive informed, evidence-based care decisions to achieve better health outcomes.

Its specialty outpatient clinical services are reimbursed by Medicare, Medicaid, and commercial insurance contracts as well as offered on a fee-for-service basis. The Company offers outpatient and telemedicine evaluation and management of, but not limited to pain, functional medicine, cognitive behavioral therapy, recovery support services, overdose education efforts, peer support, limited urgent care, preventative medicine, medically managed weight loss, and hormone therapy.

The Company providers are experts in de-prescribing and using alternatives to opioids, such as medical cannabis, Ketamine infusion therapy, and other prescription and non-prescription alternatives.

The Company is most successful when patients report positive health outcomes and high satisfaction as a result of our care.

Bitcoin Holdings

The Company also acquires and holds bitcoin that has been purchased with the proceeds of its warrant exercises. Since May 12, 2025, the Company has purchased 21 bitcoin.

The Company’s Bitcoin strategy will generally involve, from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin and (ii) acquiring bitcoin with our liquid assets that exceed working capital requirements. The Company intends to fund further bitcoin acquisitions primarily through issuances of common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock.

The Company views its bitcoin holdings as long-term holdings and expects to continue to accumulate bitcoin in the future. It has not set any specific target for the amount of bitcoin it seeks to hold and will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin. This overall strategy will also contemplate that the Company may (i) enter into additional capital raising transactions that are collateralized by its bitcoin holdings, and (ii) consider pursuing strategies to create income streams or otherwise generate funds using its bitcoin holdings.

The Company’s additional operational focus on acquiring and holding bitcoin and its new vision to adopt a Bitcoin treasury strategy began on May 12, 2025, through its proposed merger with Nakamoto Holdings Inc. (“Nakamoto”), a Bitcoin-native holding company.

Recent Developments

Nakamoto Holdings, Inc. Merger Agreement

On May 12, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, the Company’s newly formed, wholly-owned subsidiary Kindly Holdco Corp., a Delaware corporation (“Merger Sub”), Nakamoto Holdings Inc., a Delaware corporation (“Merger Partner” or “Nakamoto”), and Wade Rivers, LLC, a Wyoming limited liability company (“Wade Rivers”).

Pursuant to the Merger Agreement, Merger Sub will be merged with and into Nakamoto, with Nakamoto surviving as a wholly owned subsidiary (the “Surviving Corporation”) of KindlyMD (the “Merger”). Upon consummation of the Merger on the terms and subject to the conditions set forth in the Merger Agreement, the holders of Nakamoto Class A and Class B common stock (other than shares held in treasury or by dissenting stockholders) will receive an aggregate 22.3 million shares of the outstanding common stock, par value $0.001 per share (the “Company Common Stock”), based on a price per share of $1.12. Shares of Merger Sub’s common stock will be converted into shares of common stock of the Surviving Corporation. No fractional shares will be issued; instead, cash will be paid in lieu of fractional shares.

Concurrently with the execution of the Merger Agreement, the Company entered into subscription agreements (collectively, the “Initial Subscription Agreements”) with certain investors (the “Initial Subscribers”) in an aggregate amount of approximately $511.7 million, pursuant to which the Company agreed to issue, and the Subscribers agreed to purchase, shares of Company Common Stock at a purchase price of $1.12 per share and/or pre-funded warrants to purchase shares of Company Common Stock (the “Pre-Funded Warrants”), in a private placement (the “Initial PIPE Financing”). The PIPE Financing will be issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Additionally, the Company entered into a Secured Convertible Debenture Purchase Agreement (the “Debenture Purchase Agreement”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors (the “Convert Investor”), under which the Company agreed to sell and issue to the Convert Investor a secured convertible debenture (the “Convertible Debenture”) in aggregate principal amount of $200.0 million (the “Principal Amount”) in exchange for cash or bitcoin equal to 96% of the Principal Amount (the “Debt Financing”). The Company expects to close the Debt Financing in connection with the Merger, subject to customary closing conditions. The Convertible Debenture will be issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Additionally, on June 19, 2025, the Company subsequently entered into additional subscription agreements, (the “Additional Subscription Agreements” and, together with the Initial Subscription Agreements, the “Subscription Agreements”), with certain new and/or existing investors (the “Additional Subscribers” and, together with the Initial Subscribers, the “Subscribers”) in an aggregate amount of $51.5 million. Under these Additional Subscription Agreements, the Company agreed to issue and sell to the Additional Subscribers shares of Company Common Stock at a purchase price of $5.00 per share in a private placement on substantially similar terms as the Initial Subscription Agreements (the “Additional PIPE Financing” and, together with the Initial PIPE Financing, the “PIPE Financings”). The Additional PIPE Financing will each be issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

The Merger Agreement and the transactions contemplated by the Merger Agreement, along with the PIPE Financing and the Debt Financing, are collectively referred to herein as the “Transactions”. The board of directors of the Company (the “Board”) on May 12, 2025, has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) determined that the PIPE Financing and the Debt Financing are fair to and in the best interests of the Company and its stockholders (iii) approved and declared advisable the Merger Agreement and the Transactions, including the Merger, (iii) authorized and approved the execution, delivery and performance by the Company of the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement and the consummation of the Transactions, including the Merger, the PIPE Financing and the Debt Financing, upon the terms and subject to the conditions set forth in the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement, respectively, (iv) recommended the adoption of the Merger Agreement by the stockholders of the Company, (v) recommended the adoption of the issuance of the Company Common Stock pursuant to the Subscription Agreements and Debenture Purchase Agreement by the stockholders of the Company and (vi) recommended each of the adoption of the Governance Proposal, The New Equity Incentive Plan Proposal, the Convertible Share Issuance Proposal and the Marketing Agreement Share Issuance Proposal (each as defined herein). On May 18, 2025, holders of a majority of the issued and outstanding shares of Company Common Stock delivered to the Company a written shareholder consent in connection with the Merger Agreement, in accordance with Section 16-10a-704 of the Utah Revised Business Corporations Act and the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, to adopt and approve the following Proposals:

(1) The Merger Proposal — to approve and adopt the Merger Agreement and the transactions contemplated thereby, pursuant to which Merger Sub will merge with and into Nakamoto, with Nakamoto continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger Proposal”);

(2) The PIPE Proposal — to approve and adopt the Subscription Agreements with the Subscribers in an aggregate amount of approximately $511.7 million, pursuant to which the Company agreed to (A) issue, and such Subscribers agreed to purchase, shares of Company Common Stock at a purchase price of $1.12 per share and/or pre-funded warrants to purchase shares of Company Common Stock, in a private placement (the “PIPE Shares”) and (B) use commercially reasonable efforts to register the resale of PIPE Shares with the Securities and Exchange Commission (the “SEC”) within 30 days after closing of the Merger Agreement, seek effectiveness as soon as practicable, and maintain effectiveness until the earlier of (i) the Subscribers no longer holding the PIPE Shares, (ii) all PIPE Shares being freely tradable, or (iii) three years from effectiveness (the “PIPE Proposal”);

(3) The Share Issuance Proposal — to approve and adopt the issuance of an aggregate of 477,678,286 shares of Company Common Stock at a price per share of $1.12 per share of Company Common Stock, of which 22,321,143 shares of Company Common Stock will be issued to the stockholders of Nakamoto and 455,357,143 shares of Company Common Stock will be issued to the Subscribers to comply with: (A) Section 5635(a) of the Nasdaq Rules; (B) Section 5635(b) of the Nasdaq Rules; and (C) Section 5635(d) of the Nasdaq Rules (the “Share Issuance Proposal”);

(4) The Governance Proposal — to approve and adopt (A) the Second Amended and Restated Articles of Incorporation of the Company (the “Amended Articles”) to, among other things, (i) increase the number of authorized shares of Company Common Stock to 10,000,000,000, (ii) classify the Board so that there are three classes of directors, designated as Class I, Class II, and Class III, with each class consisting, as nearly as may be practicable, of one-third of the total members of the Board, with each class serving staggered 3-year terms, (iii) prohibit actions by written consent of the shareholders of the Company, (iv) permit the Board to change the name of the Company in its sole discretion, and (v) provide that the sole and exclusive forum for certain actions relating to the Company shall be the United States District Court for the District of Utah and any Utah State court sitting in Salt Lake County, State of Utah of the United States of America and (B) the Second Amended and Restated Corporate Bylaws of the Company (the “Amended Bylaws”) to, among other things, (i) remove the provisions prohibiting classes of directors with staggered terms, (ii) state that directors will be elected to serve three-year terms, (iii) impose a minimum and maximum number of directors who may serve on the Board, (iv) establish advance notice requirements relating to business to be brought before the annual meeting of the shareholders of the Company, including director nominees, (v) establish requirements relating to calling special meetings and the conduct at such special meetings by the shareholders of the Company, and (vi) prohibit actions by written consent of the shareholders of the Company (the “Governance Proposal”);

(5) The New Equity Incentive Plan Proposal — to approve and adopt the Company’s 2025 Equity Incentive Plan and the material terms thereunder (the “New Equity Incentive Plan”) that will be go into effect immediately prior to the closing of the Merger Agreement and related transactions to comply with Section 5635(c) of the Nasdaq Rules, which requires stockholder approval for the issuance of securities when a stock option or purchase plan is to be established, pursuant to which stock may be acquired by officers, directors, employees, or consultants (the “New Equity Incentive Plan Proposal”);

(6) The Convertible Debt Issuance Proposal — to approve and adopt the issuance of shares of Company Common Stock to YA II PN, Ltd., a Cayman Islands exempted limited company (the “Convert Investor”) pursuant to the terms of that certain Debenture Purchase Agreement, to comply with Nasdaq Rule 5635(d) (the “Convertible Debt Issuance Proposal”); and

(7) The Marketing Agreement Share Issuance Proposal — to approve and adopt the issuance of up to an aggregate of 600,000,000 shares of Company Common Stock at a price per share of $1.12 per share of Company Common Stock, in accordance with the Master Marketing Services Agreement, dated May 12, 2025 (the “Marketing Agreement”) by and between Nakamoto and BTC, Inc., a Delaware corporation (“BTC Inc”), which will be assigned to and assumed by KindlyMD from Nakamoto at the closing of the Merger Agreement pursuant to the Assignment and Assumption Agreement with Novation by and between KindlyMD, Nakamoto, and BTC (the “Assignment Agreement”), to comply with Nasdaq Rules 5635(a), 5635(b), and 5635(d) (the “Marketing Agreement Share Issuance Proposal”).

The Board on June 19, 2025, unanimously (i) determined that the Additional PIPE Financing is fair to and in the best interests of the Company and its stockholders, (ii) approved and declared advisable the Additional PIPE Financing, (iii) authorized and approved the execution, delivery and performance by the Company of the Additional Subscription Agreements, upon the terms and subject to the conditions set forth in the Additional Subscription Agreements, and (iv) recommended the adoption of the issuance of the Company Common Stock pursuant to the Additional Subscription Agreements. On June 19, 2025, holders of a majority of the issued and outstanding shares of Company Common Stock delivered to the Company a written shareholder consent, in accordance with Section 16-10a-704 of the Utah Revised Business Corporations Act and the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, to adopt and approve the following proposals (the “June Proposals”):

(1) The Additional PIPE Proposal — to approve and adopt the Additional Subscription Agreements with the Additional Subscribers in an aggregate amount of approximately $51.5 million, pursuant to which the Company agreed to (A) issue, and such Additional Subscribers agreed to purchase, shares of Company Common Stock at a purchase price of $5.00 per share in a private placement (the “Additional PIPE Shares”) and (B) use commercially reasonable efforts to register the resale of Additional PIPE Shares with the SEC within 30 days after closing of the Merger Agreement, seek effectiveness as soon as practicable, and maintain effectiveness until the earlier of (i) the Additional Subscribers no longer holding the Additional PIPE Shares, (ii) all additional PIPE Shares being freely tradable, or (iii) three years from effectiveness (the “Additional PIPE Proposal”); and

(2) The Additional Share Issuance Proposal — to approve and adopt the issuance of an aggregate of 10,300,000 shares of Company Common Stock at a price per share of $5.00 per share of Company Common Stock to the Additional Subscribers to comply with: (A) Section 5635(a) of The Nasdaq Stock Market’s Listing Rules (the “Nasdaq Rules”); (B) Section 5635(b) of the Nasdaq Rules, as applicable ; and (C) Section 5635(d) of the Nasdaq Rules (the “Additional Share Issuance Proposal”).

The adoption of the May Proposals and approval of the Merger and related Transactions by the Company’s stockholders required the affirmative vote or consent by the holders of a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote thereon. On May 18, 2025, holders of approximately 50.76% of the outstanding voting power of the Company, which collectively on May 18, 2025 held of record and beneficially owned 3,708,163 shares of Company Common Stock (the “May 18 Majority Stockholders”), delivered a written consent approving and adopting in all respects the Proposals (the “Written Consent”). As a result, no further action by any stockholder of the Company is required under applicable law or the Merger Agreement (or otherwise) to adopt the Merger Agreement or approve the Merger and related Transactions, or adopt and approve any of the Proposals, and the Company will not be soliciting your vote for or consent to the Proposals and will not call a stockholders’ meeting for purposes of voting on the adoption of the Proposals, including the Merger Agreement and the approval of the transactions contemplated by the Merger Agreement.

The adoption of the June Proposals and approval of the Additional PIPE Issuance and related transactions by the Company’s stockholders required the affirmative vote or consent by the holders of a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote thereon. On June 19, 2025, stockholders which collectively on June 19, 2025 held of record and beneficially owned 3,813,927 shares of Company Common Stock representing approximately 50.14% of the aggregate voting power of the then-issued and outstanding shares of Company Common Stock (the “June 19 Majority Stockholders”), delivered a written consent approving and adopting in all respects the June Proposals (the “June Written Consent”).

The Merger Agreement contains certain termination rights for the parties, including (i) by mutual written consent; (ii) by either party if the Merger shall not have been consummated by November 14, 2025; (iii) by either party if a permanent injunction has been issued or other law has been enacted prohibiting or making illegal the Merger; (iv) by either party if the required Kindly stockholder approval is not obtained within seven business days after signing; (v) by Kindly if (A) Nakamoto has breached its representations or covenants in a way that causes a condition to closing to fail or, (B) if prior to receipt of Nakamoto stockholder approval, Nakamoto effected a Merger Partner Board Recommendation Change; (vi) by Nakamoto if (A) Kindly has breached its representations or covenants in a way that causes a condition to closing to fail or, (B) if prior to receipt of Kindly stockholder approval, Kindly effected a Public Company Board Recommendation Change; (vii) by either party upon certain material breaches of the other party; (viii) by either party upon receipt of a Superior Proposal prior to receipt of the applicable stockholder approval and subject to certain obligations; and (ix) by Nakamoto if Kindly enters into bankruptcy, receivership or other similar proceedings. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain circumstances, Kindly may be required to pay Nakamoto a termination fee of $2.5 million, plus the aggregate amount of proceeds received by Kindly in respect of any exercises of any Public Company Warrants. Nakamoto may be required to pay Kindly a termination fee of $2.5 million.

On July 22, 2025, the Company has filed a Notice of Stockholder Action by Written Consent and Information Statement on Schedule 14C (the “Information Statement”) with the Securities and Exchange Commission that contains more detailed information on the proposed Merger, the Merger Agreement and the Ancillary Agreements. The foregoing description of the Merger Agreement, as well as the Initial Subscription Agreements, Additional Subscription Agreements, Debenture Purchase Agreement, and other Ancillary Agreements, do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, copies of which are filed as Annexes to the Information Statement that has been mailed to all shareholders of record.

Warrant Exercises

Since May 12, 2025 through the close of business on August 4, 2025, the Company has issued 1,511,320 shares of its common stock pursuant to the exercise of warrants by warrant holders (with 18 of those shares being issued after July 1, 2025). Through the close of business on August 4, 2025, the Company has received a total of $9,216,534 from the exercise of these warrants.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table sets forth key components of our results of operations during the three months ended June 30, 2025 and 2024, both in dollars and as a percentage of our revenues:

19

Revenues

The Company earned $231,726 in reimbursements from insurance payers during the three months ended June 30, 2025, representing a 153.1% increase compared to the $91,553 earned during the three months ended June 30, 2024.

Revenues decreased by $230,530, or 36.1%, to $408,527 for the three months ended June 30, 2025, from $639,057 for the three months ended June 30, 2024. The decrease in revenues is primarily attributed to a decrease in cash-pay patient care service pricing and the closing of our Bountiful location.

Operating Expenses

Operating expenses increased by $1,123,768 or 67.0%, to $2,800,018 for the three months ended June 30, 2025, from $1,676,250 for the three months ended June 30, 2024. The increase in operating expenses is primarily attributable to the following:

1. Salaries and wages increased by $854,001, or 106.4%, to $1,656,288 for the three months ended June 30, 2025, from $802,287 for the three months ended June 30, 2024. The increase in salaries and wages is primarily attributed to stock as compensation and additional contracting labor as we expand our operations in medical services after our IPO, additional support as a public company.

2. General and administrative expenses increased by $677,513, or 152.6%, to $1,121,482 for the three months ended June 30, 2025, from $443,969 for the three months ended June 30, 2024. The increase in general and administrative expenses is primarily attributed to increased legal fees, investor and public relations, increased insurance for directors and officers as a publicly traded company and marketing and advertising costs.

3. Research and development decreased by $342,310, or 100.0%, to $4 for the three months ended June 30, 2025, from $342,314 for the three months ended June 30, 2024. The decrease in research and development is primarily attributed to a decrease in the enterprise data management project as the Company focuses resources on the upcoming merger.

Other Expense

Net other expense decreased by $260,164, or 92.1%, to $22,296 for the three months ended June 30, 2025, from $282,460 for the three months ended June 30, 2024. The decrease in net other expense is primarily attributable to the following:

1. Other income increased by $12,997, or 94.0%, to $26,825 for the three months ended June 30, 2025, from $13,828 for the three months ended June 30, 2024. This increase is primarily attributable to interest income from the exercise of warrant funds and subsequent increase in cash.

2. Interest expense decreased by $314,782, or 98.8%, to $3,668 for the three months ended June 30, 2025 from $318,450 for the three months ended June 30, 2024. This decrease in interest expense is primarily attributed to a reduction of notes payable and amortization of debt discounts.

3. Unrealized loss on digital assets was $39,019 for the three months ended June 30, 2025 representing a 100% increase from $0 for the three months ended June 30, 2024. This increase in unrealized digital assets is attributed to the purchase of 21 bitcoin during the three months ended June 30, 2025.

4. Loss on extinguishment of debt decreased by $38,889, or 100.0%, to $0 for the three months ended June 30, 2025 from $38,889 for the three months ended June 30, 2024. The decrease in the loss on extinguishment of debt is primarily attributed to the notes payable from the prior year that the Company repaid in full Consequently, the corresponding derivative liability was extinguished and the Company recognized a loss on extinguishment of debt.

5. The fair value of derivative liability decreased by $61,051, or 100.0%, to $0 for the three months ended June 30, 2025 from $61,051 for the three months ended June 30, 2024. This elimination in fair value of derivative liability is primarily attributed to the repayment and settlement of notes payable in connection with our IPO.

Net Loss

As a result of the cumulative effect of the factors described above, our net loss was $2,413,787 for the three months ended June 30, 2025, compared to a net loss of $1,319,653 for the three months ended June 30, 2024.

Net loss per share increased by $0.09, or 34.6%, to $(0.35) for the three months ended June 30, 2025, compared to $(0.26) for the three months ended June 30, 2024. KindlyMD management strives to look for opportunities to optimize revenue by increasing sales, improving margins, and controlling ongoing operating expenses.

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table sets forth key components of our results of operations during the six months ended June 30, 2025 and 2024, both in dollars and as a percentage of our revenues:

Revenues

The Company earned $316,999 in reimbursements from insurance payers during the six months ended June 30, 2025, representing a 150.9% increase compared to the $126,325 earned during the six months ended June 30, 2024.

Revenues decreased by $479,904, or 32.7%, to $988,182 for the six months ended June 30, 2025, from $1,468,086 for the six months ended June 30, 2024. The decrease in revenues is primarily attributed to a decrease in cash-pay patient care services and the closing of our Bountiful location. KindlyMD continues increase our medical services and shift toward insurance billing with commercial and governmental payers including Medicare, Medicaid, Select Health, Blue Cross Blue Shield, Cigna, and other commercial payers as we expand our service line.

Operating Expenses

Operating expenses increased by $1,679,008 or 61.2%, to $4,421,414 for the six months ended June 30, 2025, from $2,742,406 for the six months ended June 30, 2024. The increase in operating expenses is primarily attributable to the following:

1. Salaries and wages increased by $1,149,212, or 76.1%, to $2,659,465 for the six months ended June 30, 2025, from $1,510,253 for the six months ended June 30, 2024. The increase in salaries and wages is primarily attributed to stock as compensation and additional contracting labor as we expand our operations in medical services, additional support as a public company, and increased labor for marketing awareness as KindlyMD shifts to insurance billing with commercial and governmental payers.

2. General and administrative expenses increased by $979,822, or 133.5%, to $1,713,919 for the six months ended June 30, 2025, from $734,097 for the six months ended June 30, 2024. The increase in general and administrative expenses is primarily attributed to increased legal fees, professional fees such as investor public relations, increased insurance for directors and officers as a publicly traded company and marketing and advertising.

3. Research and development decreased by $377,630, or 100.0%, to $101 for the six months ended June 30, 2025, from $377,731 for the six months ended June 30, 2024. The decrease in research and development is primarily attributed to a decrease in the enterprise data management project.

Other Expense

Net other expense decreased by $309,093, or 94.3%, to $18,566 for the six months ended June 30, 2025, from $327,659 for the six months ended June 30, 2024. The decrease in net other expense is primarily attributable to the following:

1. Other income increased by $11,017, or 42.6%, to $36,885 for the six months ended June 30, 2025, from $25,868 for the six months ended June 30, 2024. This increase is primarily attributable to interest income from the exercising of warrant funds upon merger announcement.

2. Interest expense decreased by $365,691, or 97.3%, to $9,998 for the six months ended June 30, 2025 from $375,689 for the six months ended June 30, 2024. This decrease in interest expense is primarily attributed to a reduction of notes payable and amortization of debt discounts.

3. Unrealized loss on digital assets increased by $39,019, or 100.0%, to $39,019 for the six months ended June 30, 2025 from $0 for the six months ended June 30, 2024. This increase in unrealized digital assets is primarily attributed to the purchase of 21 bitcoin during the three month ended June 30, 2025.

4. Loss on extinguishment of debt decreased by $38,889, or 100.0%, to $0 for the six months ended June 30, 2025 from $38,889 for the six months ended June 30, 2024. This decrease in the loss on extinguishment of debt is primarily attributed to the notes payable from the prior year that the Company repaid and issued each note holder common stock equal to the principal amount of the notes at the IPO price of $5.50, totaling 80,808 shares of restricted common stock, with a fair value of $214,949 or $2.66 per share. Consequently, the corresponding derivative liability was extinguished and the Company recognized a loss on extinguishment of debt.

5. Gain on the change in fair value of derivative liability decreased by $61,051, or 100.0%, to $0 for the six months ended June 30, 2025 from $61,051 for the six months ended June 30, 2024. This decrease in loss on the change in fair value of derivative liability is primarily attributed to the repayment and issuance of common shares upon settlement of notes payable in connection with a public offering IPO.

Net Loss

As a result of the cumulative effect of the factors described above, our net loss was $3,451,798 for the six months ended June 30, 2025, compared to a net loss of $1,601,979 for the six months ended June 30, 2024.

Net loss per share decreased by $0.21, or 63.6%, to $(0.54) for the six months ended June 30, 2025, compared to $(0.33) for the six months ended June 30, 2024. KindlyMD management strives to optimize revenue by increasing sales, improving margins, and controlling ongoing operating expenses.

Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $6,024,604 and total working capital of $5,881,838. For the six months ended June 30, 2025, the Company incurred an operating loss of $3,451,798 and used cash flows in operating activities of $2,776,302.

To date, we have financed our operations primarily through revenues generated from operations and cash proceeds from financing activities. On May 12, 2025, the Company announced its intent to merge with Nakamoto Holdings, Inc., a bitcoin treasury company, and simultaneously exercised warrants previously issued from the IPO on June 3, 2024. Exercising these warrants have provided us with the liquidity and cash reserves necessary to meet our obligations for at least the 12-month period following the date of this report, and to assist us in implementing our strategic operational business plans to create sustained cash flow generation thereafter. Management acknowledges the decrease in working capital and is focused on increasing cash reserves and liquidity in the near term through strategic transactions.

Summary of Cash Flow

The following table sets forth key components of our results of cash flow activities during the six months ended June 30, 2025 and 2024:

22

Operating Activities

Net cash used in operating activities was $2,776,302 for the six months ended June 30, 2025, which was primarily due to a net loss of $3,451,798 and an increase in prepaid expenses and other current assets of $148,222, which was partially offset by non-cash expenses of $836,157 and an increase in accounts payable and accrued expenses of $40,476.

Net cash used in operating activities was $1,126,976 for the six months ended June 30, 2024, which was primarily due to a net loss of $1,601,979 and an increase in prepaid expenses and other current assets of $305,430, which was partially offset by non-cash expenses of $452,940 and an increase in accounts payable and accrued expenses of $298,939.

Investing Activities

Net cash used in investing activities was $2,521,108 for the six months ended June 30, 2025, which was the result of the purchase of digital assets of $2,289,585 and an increase in capitalized software additions of $231,523.

Net cash used in investing activities was $11,182 for the six months ended June 30, 2024, which was the result of the purchase of property and equipment.

Financing Activities

Net cash provided by financing activities was $9,048,390 for the six months June 30, 2025, which was primarily due to $9,216,420 in proceeds from the exercise of warrants.

Net cash provided by financing activities was $5,352,664 for the six months ended June 30, 2024, which was primarily due to $5,860,650 of net proceeds from the issuance of common stock and warrants in connection with our IPO. This was partially offset by $552,655 in repayments of notes payable.

As a result of these cash flow activities, our net cash increased by $3,750,980, or 165.0%, from $2,273,624 as of December 31, 2024, to $6,024,604 as of June 30, 2025.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

For a description, of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025. There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2024.

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). As a result of this evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Notwithstanding the identified material weaknesses, management, including our principal executive officer and principal financial officer, believes the condensed consolidated financial statements included in this report fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with GAAP.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting. Please refer our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed, with the SEC on March 28, 2025.

In addition to other information set forth in this report, readers should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 28, 2025, before making an investment decision. Our business, financial condition, and results of operations can be affected by any of these factors, whether they are currently known or unknown, in whole or in part, could materially and adversely affect our business, financial condition, results of operations, and stock price.