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BORROWINGS FOR SHARE REPURCHASES | 12 Months Ended
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Dec. 31, 2025
Borrowings For Share Repurchases |
BORROWINGS FOR SHARE REPURCHASES | NOTE 7 – BORROWINGS FOR SHARE REPURCHASES Credit Facility and Term Loan On August 15, 2025, the Company entered into a Master Repurchase Agreement and related commitment letter (together the “MRA”) with a third-party pursuant to which the Company could borrow up to $25.0 million Upon entry into the MRA the Company paid a commitment fee of $150,000 in connection with the MRA, which the Company has recorded as loan issuances costs and will amortize this amount, plus legal fees associated with the MRA, over the 90 day term of the borrowings. Upon the initial borrowing date, the Company was required to place a minimum of $15,625,000 of BTC in a custody account with an affiliate of the third-party, which was required to be retained through the term of the agreement. The interest on all borrowings under the MRA was 11.0% per annum, which was payable monthly. The repayment date could have been extended at the option of the Company by three 30-day periods for a fee of 0.20%, 0.50% and 0.60% for the first, second and third 30-day periods, respectively. The minimum initial borrowing under the MRA was $3.0 million and additional minimum borrowings were no less than $1.0 million. Under the MRA, the Company was required to provide the lender additional Bitcoin as collateral for each borrowing of 250% of the amount borrowed. If the value of BTC held by the lender as collateral decreased below 200% of the aggregate borrowings outstanding, the Company was required to provide additional Bitcoin to increase the value back to 250% of the loans outstanding. If the value of Bitcoin increased to over 300% of the total aggregate outstanding borrowings, the lender was required to return Bitcoin or cash to the Company until the collateral equaled 250% of the aggregate outstanding borrowings. If the value of BTC decreases below 125% and additional collateral is not provided within a specified time period, the lender may liquidate BTC and use the proceeds to repay the outstanding borrowings and return the remaining BTC to the Company. Upon repayment of the outstanding borrowings under the MRA, the third-party lender was required to return all Bitcoin held as collateral. On September 18, 2025, the Company and the third-party lender amended the MRA and increased the available borrowings by an additional $10.0 million which also required the Company to increase the amount of Bitcoin in the custody account to a total of $21,875,000. All other provisions of the MRA remained the same. The Company borrowed the full $35.0 million available under the MRA, as amended, as of September 22, 2025, and used the proceeds to repurchase its common stock, including any brokerage commissions under the Company’s share repurchase program. On September 26, 2025, the Company and the third-party lender under the MRA entered into a new Master Repurchase Agreement and related transaction confirmation (together the “Repo Facility”) with a maturity date of August 31, 2026 and providing for $50.0 million in cash advances to the Company in exchange for purchased securities in the form of Bitcoin. Upon entry into the Repo Facility, the Company paid a commitment fee of $125,000, which was recorded as loan issuance costs which, with legal fees incurred for the Repo Facility, will be amortized through August 31, 2026, the due date for any outstanding borrowings. The interest rate for borrowings under the Repo Facility is 8.5% per annum. The first $35.0 million borrowed under the Repo Facility was required to be, and was, used to repay all outstanding borrowings under the MRA and there was no early prepayment penalty. In addition, borrowings under the Repo Facility were used to pay accrued interest for borrowings outstanding under the MRA of $165,917, and the $125,000 commitment fee. The remaining proceeds of $14.7 million were deposited into one of the Company’s bank accounts and the Company has used the proceeds to repurchase its common stock, including commissions due to the placement agent, under the Company’s share repurchase program, as discussed further in Note 13 below. The Repo Facility has an early prepayment fee of 2% if repaid within six months of the agreement date and 1% if paid after six months but before August 31, 2026. The Company recognized a loss on the repayment of the MRA totaling $125,377 for the unamortized issuance costs, which includes the commitment fee and legal fees, as of the repayment date. As of December 31, 2025, 1,434 BTC with a fair value of $125.4 million was held as collateral for the outstanding balance borrowed of $50 million. For the year ended December 31, 2025, the Company recognized $1,435,170 of interest expense for the above borrowing arrangements, including accrued interest of $365,972 as of December 31, 2025. On February 4, 2026, the value of BTC held as collateral decreased below 200% of the aggregate borrowings and the Company provided 361 BTC to increase the collateral value back to 250% of the aggregate borrowings. Delayed Draw Term Loans On October 12, 2025, the Company entered into a Master Loan Agreement (the “MLA”) with a lender to obtain additional capital in the form of delayed draw term loans. Under the MLA, the Company may borrow, an aggregate principal amount of up to $100.0 million, through October 9, 2026 (subject to the extension referenced below), at which date, all such loans, together with any accrued and unpaid interest and related obligations, shall become due and payable in their entirety. The Company has the option, in its sole discretion, to extend the due date of all such loans for one additional year, to October 9, 2027 and the Company exercised this option on October 29, 2025. Further, the MLA was not subject to any commitment fees and borrowings can be repaid early without any prepayment penalty or premium. Prior to the amendment discussed below, the interest rate applicable to all outstanding loans was 6.50% per annum payable monthly. The MLA initially required the Company to provide the Lender collateral of BTC equal to 250% of any amount borrowed (the “Initial Collateral Rate”). If the value of BTC held by the lender as collateral decreased below 175% of the aggregate borrowings outstanding (“Collateral Call Level”), the Company is required to provide additional BTC to increase the value back to 250% of the aggregate borrowings outstanding. If the value of BTC increased to over 345% of the total aggregate outstanding borrowings (the “Collateral Refund Level”), the lender is required to return BTC to the Company until the collateral equals 250% of the aggregate outstanding borrowings. If the value of BTC decreased below 150% of the aggregate borrowings outstanding (the “Liquidation Level”) the Company was required to provide additional BTC to increase the value back to 250% within 24 hours or the lender may liquidate collateral equal to the amount to repay the aggregate outstanding borrowings and return any remaining collateral to the Company. As of December 31, 2025, the Company has utilized draw term loans totaling $50.0 million and provided 1,196 BTC with a fair value of $104.6 million to the lender as collateral. For the year ended December 31, 2025, the Company recognized $560,351 of interest expense. As discussed in Note 5 above, in the period from January 1, 2026, to March 25, 2026, the Company borrowed an additional $5.0 million and repaid $10.0 million under the MLA. On February 4, 2026, the value of BTC decreased below the Collateral Call Level and the Company provided the lender 576 BTC to bring the value of the collateral back to the Initial Collateral Level. On February 10, 2026, the MLA was amended and the Initial Collateral Rate was reduced to 174%, the Collateral Call Level was reduced to 153%, the Collateral Refund Level was reduced to 217% and the Liquidation Level was reduced to 143%. The lender returned 490 BTC to the Company as a result of this amendment. The amendment also increased the interest rate applicable to all outstanding loans to 7.5% and reduced the time period for the Company to provide collateral for the Liquidation Level to 12 hours.

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