NOTE 7. DIGITAL ASSETS

On October 23, 2025, the Company adopted BERA as its primary treasury reserve asset. Under this treasury strategy, the Company acquires, holds, and strategically deploys BERA, the native token of the Berachain blockchain network, as well as certain BERA-based receipt, staked, or wrapped positions that are economically linked to BERA (“BERA-equivalent tokens”). These holdings are maintained for long-term treasury management, ecosystem participation, staking, validator activities, liquidity deployment, and other Board-approved strategic activities.

The Company accounts for its BERA and BERA-equivalent holdings as digital assets in accordance with ASC 350, Intangibles—Goodwill and Other, as amended by ASU 2023-08, Accounting for and Disclosure of Crypto Assets. The Company has legal ownership and control over these digital assets, which are presented as digital assets in the Condensed Consolidated Balance Sheets. As of June 30, 2026, certain BERA and BERA-equivalent holdings were subject to contractual transfer or sale restrictions under applicable treasury and protocol arrangements. Management considered such restrictions in its liquidity planning and treasury management activities.

Digital assets are initially recorded at cost upon purchase, receipt, or conversion. Transaction costs incurred to acquire digital assets are expensed as incurred unless otherwise required by applicable accounting guidance. Subsequently, BERA and BERA-equivalent holdings are remeasured at fair value as of each reporting date, with changes in fair value recognized in earnings within change in fair value of digital assets in the Condensed Consolidated Statements of Operations.

For disclosure and treasury management purposes, the Company monitors both (i) native BERA units held directly and (ii) BERA-equivalent units, which represent positions in receipt, staked, wrapped, or protocol-native instruments that are economically convertible into, or otherwise directly linked to, underlying BERA units. Management evaluates treasury performance, exposure, and BERA-per-share metrics on both a native-unit basis and a BERA-equivalent basis.

The following table presents the units held, cost basis, and fair value of native BERA and BERA-equivalent tokens (sWBERA, siBERA, and iBERA), as of June 30, 2026 and December 31, 2025, respectively, in thousands except for tokens: 

 SCHEDULE OF UNITS HELD, COST BASIS, AND FAIR VALUE

Cost basis reflects the historical acquisition cost of digital assets, including digital assets acquired through the October 2025 PIPE transaction, subsequent treasury purchases, and staking rewards recognized upon receipt. Comparative period cost basis amounts are presented consistent with amounts previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Cost basis reflects the cost of the digital asset at the time of purchase or receipt and excludes transaction costs that were expensed as incurred. Fair value represents quoted digital assets prices within the Company’s principal market at the time of measurement (11:59 p.m. UTC).

The following table presents a rollforward of the Company’s digital asset holdings, including BERA tokens and BERA-equivalent sWBERA, iBERA, siBERA, and similar tokens held in Company-controlled wallets, for the six months ended June 30, 2026. Digital assets are measured at fair value with changes recognized in earnings. U.S. dollar-denominated stablecoins that qualify as cash equivalents are excluded from this rollforward. Stablecoin-related protocol instruments that do not qualify as cash equivalents are also excluded from this rollforward.

SCHEDULE OF CRYPTOCURRENCY ACTIVITIES

As of June 30, 2026, a portion of the Company’s BERA and BERA-equivalent digital asset holdings remained subject to vesting restrictions under Berachain’s token allocation terms. These terms provide for a one-year cliff (which ended in February 2026), resulting in an initial unlock of one-sixth of the allocated tokens, with the remaining five-sixths vesting linearly on a monthly basis over the following 24 months. The restricted balance as of June 30, 2026 reflects the cumulative effect of unlocking that occurred through that date. As of December 31, 2025, the Company did not have any BERA or BERA-equivalent holdings subject to operational transfer restrictions. The table below summarizes the Company’s restricted and unrestricted BERA-equivalent holdings, including units held and fair value, as of each balance sheet date, in thousands except for token units.

SCHEDULE OF RESTRICTED AND UNRESTRICTED BERA-EQUIVALENT HOLDINGS