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Operating Segments
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Operating Segments

Note 8 - Operating Segments

 

The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on the basis of its two different revenue sources. Our Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks and online casino gaming operators worldwide. Our Ethereum Staking (“ETH Staking”) segment captures ETH-based yield generated by participating in the Ethereum network’s staking protocol which is currently comprised of rewards received from native staking.

 

As a result, the Company operates two reportable segments under ASC 280, Segment Reporting, Affiliate Marketing and ETH Staking. 

 

Total Affiliate Marketing net loss from continuing operations before income taxes was $(1,492,219) and $(2,406,143) million for the three- and six-month periods ending June 30, 2025. Total ETH Staking net loss from continuing operations before income taxes was $(101,851,030) for the three- and six-month periods ending June 30, 2025.

 

 

Affiliate Marketing

 

The Company’s Affiliate Marketing operations include performance marketing services, lead generation, and data analytics. The Company focuses on delivering quality traffic and player acquisitions, retention and conversions to global casino gaming partners worldwide in exchange for a commission (cost per acquisition or portion of net gaming revenues) paid to the Company by the partners for the new players referred to them.  The CODM assesses financial performance based on consolidated revenue, operating profit, and key operating expenses as detailed below.

 

The following table presents significant segment expenses regularly provided to and reviewed by the CODM for the Affiliated Marketing Segment:

 

                 
   Affiliate Marketing Segment   Affiliate Marketing Segment 
   For the
Three
Months
Ended June
30, 2025		   For the
Three
Months
Ended June
30, 2024		   For the Six
Months
Ended June
30, 2025		   For the Six
Months
Ended June
30, 2024		 
Revenue  $668,757   $981,272   $1,410,488   $1,957,218 
Less:                    
Cost of revenues   488,202    701,142    1,098,138    1,389,876 
Segment gross profit   180,555    280,130    312,350    567,342 
Less:                    
Salaries and benefits   741,110    247,839    1,043,810    708,798 
Contractors and consulting expense   132,649    51,005    203,440    138,630 
Marketing expense   21,186    60,463    41,636    136,260 
Other segment expenses (1)   777,829    794,383    1,429,607    2,212,351 
Segment net loss from continuing operations before income taxes   (1,492,219)   (873,560)   (2,406,143)   (2,628,697)
                     
Reconciliation of profit or loss                    
Adjustments and reconciling items   -    -    -    - 
Consolidated net loss from continuing operations before income taxes   (1,492,219)   (873,560)   (2,406,143)   (2,628,697)

 

(1)- other segment items included in Segment net loss include: professional fees, insurance, general and administrative expenses, depreciation and amortization, foreign currency exchange gains and losses, other income and interest expense.

 

ETH Staking

 

Beginning in June 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which can include  native staking, liquid staking and restaking. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced both native staking and liquid staking in June of 2025. The Company intends for staking to become a primary revenue generation strategy of the Company within the current fiscal year.

 

Native Staking

 

The Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025.

 

Through its agreements with these asset managers, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606.

 

All native staking revenue is earned within the United States as the validators are domiciled within the United States.

 

Liquid Staking

 

The Company participates in liquid staking, which is similar to native staking. One key difference and intended benefit of liquid staking is that it provides for liquidity by allowing the Company to earn staking rewards while still maintaining the ability, provided through the receipt token, to enter into to other transactions. When the Company’s ETH is staked, the Company is provided with a digital intangible asset (i.e., LsETH) which represents the crypto asset (i.e., ETH) which has been staked. Liquid staking rewards will be recognized as gains or losses within other income upon redemption or sale of the LsETH in accordance with ASC 610-20. No LsETH was redeemed or sold in the period ended June 30, 2025.

 

The CODM assesses financial performance based on consolidated revenue, operating profit and key operating expenses as detailed below.

 

 

The following table presents significant segment expenses regularly provided to and reviewed by the CODM for the ETH Staking segment:

 

           
    ETH Staking Segment 
    For the
Three
Months
Ended June
30, 2025		    For the Six
Months
Ended June
30, 2025		 
Revenue  $28,534   $28,534 
Segment gross profit   28,534    28,534 
Less:          
Salaries and benefits   118,961    118,961 
Contractors and consulting expense   43,511    43,511 
Asset manager fees   377,841    377,841 
Legal expenses   83,145    83,145 
Realized gains on crypto assets, net   (5,373,583)   (5,373,583)
Unrealized loss on crypto assets   2,437,026    2,437,026 
Impairment on digital intangible assets   87,813,295    87,813,295 
Other segment expenses (1)   16,379,368    16,379,368 
Segment net loss from continuing operations before income taxes   (101,851,030)   (101,851,030)
           
Reconciliation of profit or loss          
Adjustments and reconciling items   -    - 
Consolidated net loss from continuing operations before income taxes   (101,851,030)   (101,851,030)

 

(1)- other segment items included in Segment net loss include: stock-based compensation - related party.

 

These expenses represent the key cost components reviewed by the CODM in assessing the Company’s performance.

 

The CODM evaluates income generated from the Company’s assets using net income (loss) as a key metric. The CODM utilizes this measure to assess return on assets when making strategic decisions, including whether to reinvest profits into the affiliate marketing platform or ETH staking business, enhance technology and data analytics capabilities, or expand partnerships with advertisers and publishers.

 

Summarized revenues by country in which the Company operated for the three and six months ended June 30, 2025 and 2024 are shown below. All ETH staking revenue occurred within the United States.

 

For the three months ended June 30, 2025:

 

      
United States  $177,704 
Rest of the World  $519,587 
Revenue  $697,291 

 

For the six months ended June 30, 2025:

 

      
United States  $408,432 
Rest of the World  $1,030,590 
Revenue  $1,439,022 

 

For the three months ended June 30, 2025:

 

      
United States  $230,725 
Rest of the World  $750,547 
Revenue  $981,272 

 

For the six months ended June 30, 2024:

 

      
United States  $438,726 
Rest of the World  $1,518,492 
Revenue  $1,957,218 

 

 

The Company does not have material assets in foreign jurisdictions.

 

The Company’s Affiliate Marketing Services segment derives a significant portion of its revenues from several large customers. The table below presents the percentage of consolidated revenues derived from large customers:

 

   June 30, 2025   June 30, 2024 
         
Customer A   44%   37%
Customer B   14%   22%
Customer C   22%   0%