ABIT 10-Q
Athena Bitcoin Global (ABIT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM
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| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
Commission File Number:
____________________
(Exact name of registrant as specified in its charter)
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| (Address of principal executive offices) | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Act). ☐ Yes
As of May 14, 2026, the registrant had shares of its Common Stock, $0.001 par value, outstanding.
Athena Bitcoin Global
Quarterly Report on Form 10-Q
For the three months ended March 31, 2026
Table of Contents
| i |
GLOSSARY OF BITCOIN AND CRYPTO TERMS
The following are abbreviations, acronyms and definitions of certain terms used in this document, which are commonly used in our industry:
| · | Address: An alphanumeric reference to where crypto assets can be sent or stored. | |
| · | Athena Bitcoin Affiliates Program provides Bitcoin ATM operators with a turnkey solution, offering software, compliance support, cash management, and marketing services to streamline operations and maximize profitability. This turnkey solution is for participating independent Bitcoin ATM operators (“Affiliates”) who will be able to leverage the Company’s established platform and services to manage their own Bitcoin ATMs more efficiently. | |
| · | Bitcoin (BTC): The first system of global, decentralized, scarce, digital money as initially introduced in a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto. Bitcoin, while having several of the primary attributes of money, is not considered a currency or money in the jurisdictions that the Company operates, with the exception of El Salvador where Bitcoin may be used for private trade, investment and voluntary use. | |
| · | Bitcoin ATM: A kiosk that can be used by a Customer to buy or sell bitcoin or other crypto assets in exchange for Cash. | |
| · | Bitcoin Cash (BCH): A fork of Bitcoin that seeks to add more transaction capacity to the network in order to be useful for everyday transactions. BCH is based on the original Bitcoin blockchain with some distinct differences. A major one is an increased maximum block size of 32MB, compared to just 1MB on Bitcoin. Increased block size allows BCH to process transactions faster than Bitcoin, with lower fees and an increased per-second transaction capacity. | |
| · | Block: A grouping of Transactions validated by Miners and disseminated by the Network to servers that maintain the records in a blockchain. Blocks are added to an existing blockchain as transactions occur on the network. Miners are rewarded for “mining” a new block. | |
| · | Blockchain: A cryptographically secure digital ledger that maintains a record of all transactions that occur on the Network and follows a consensus protocol for confirming new Blocks to be added to the blockchain. | |
| · | Cash: The physical specie or banknotes of a sovereign country including the U.S. Dollar and other countries that issue Fiat Currency in paper formats. | |
| · | Chivo: CHIVO, Sociedad Anonima de Capital Variable, a private company incorporated under the laws of the Republic of El Salvador, which is politically controlled by the Government of El Salvador (GOES), is the official Bitcoin service provider of the Government of El Salvador. The platform facilitates the exchange of Bitcoin and U.S. Dollar between users and their counterparties. The Chivo brand, which is the exclusive property of CHIVO, Sociedad Anonima de Capital Variable, is used across multiple products and services including a mobile wallet (Chivo wallet), integrated ATM (Chivo ATMs) and point-of-sale (“POS”) terminals. | |
| · | Cold storage: The storage of private keys in any fashion that is disconnected from the internet. Common cold storage examples include offline computers, USB drives, or paper records. | |
| · | Confirmation: A Bitcoin or similar transaction is considered confirmed when it is included in a new Block in the Blockchain. Each time another Block is appended to the chain, the Transaction is confirmed again. | |
| · | Crypto: A broad term for any cryptography-based market, system, application, or decentralized network. | |
| · | Cryptocurrency: Bitcoin and alternative coins, or ‘altcoins’. This category of crypto asset is designed to work as a medium of exchange, store of value, or to power applications and excludes security tokens. |
| ii |
| · | Customer: A retail user of our Bitcoin ATMs or client of one of our other services. |
| · | Customer Buying: When a Customer acquires Bitcoin or another crypto asset in exchange for Cash or a Wire Transfer. In these transactions, the Company is selling Bitcoin or the crypto asset and acquiring Fiat Currency. |
| · | Customer Selling: When a Customer acquires Fiat Currency, via either Cash or a Wire Transfer from the Company, in exchange for Bitcoin or another crypto asset. In these transactions, the Company is acquiring Bitcoin or another crypto asset in exchange for Fiat Currency. |
| · | Crypto Asset or Digital Asset: Bitcoin and alternative digital forms of money, or ‘altcoins,’ launched after the success of Bitcoin. This category of crypto asset is designed to work as a medium of exchange, store of value, or to power applications. The term “altcoins” is inclusive of Ethereum, Litecoin, Tether and Bitcoin Cash. | |
| · | Ethereum (ETH): A decentralized global computing platform that supports smart contract transactions and peer-to-peer applications, or “Ether,” the native crypto assets on the Ethereum network. |
| · | Fiat Currency: The currency issued by a sovereign government or bloc including the U.S. Dollar, Argentine Peso, or Euro. |
| · | Fork: A fundamental change to the software underlying a blockchain which results in two different blockchains, the original, and the new version. In some instances, the fork results in the creation of a new token. |
| · | Hot Wallet: A wallet that is connected to the internet, enabling it to broadcast transactions. |
| · | Miner: Individuals or entities who operate a computer or group of computers that add new transactions to blocks, and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new tokens for their services. |
| · | Mining: The process by which new blocks are created, and thus new transactions are added to the blockchain. |
| · | Network: The collection of all Miners and Nodes that use computing power to maintain the ledger and add new blocks to the blockchain. Most networks are decentralized, reducing the risk of a single point of failure. | |
| · | Node: A server that maintains a record of the blockchain and can communicate with other Nodes on the Network to propagate new Transactions. Nodes can also maintain wallets and safeguard Private Keys. |
| · | Protocol: A type of algorithm or software that governs how a blockchain operates. |
| · | Public key or private key: Each public address has a corresponding public key and private key that are cryptographically generated. A private key allows the recipient to access any funds belonging to the address, similar to a bank account password. A public key helps validate transactions that are broadcasted to and from the address. Addresses are shortened versions of public keys, which are derived from private keys. | |
| · | StableCoin: A Token issued for the purpose of maintaining a constant value relative to a Fiat Currency, most commonly the U.S. Dollar. Examples include Tether, USDC, Dai, BinanceUSD or GUSD. Many of these operate as un-regulated money market fund equivalents. Stable coins are a popular method to transfer funds between exchanges without taking price risk. | |
| iii |
| · | Tether (USDt): A blockchain-based cryptocurrency whose tokens in circulation are backed by an equivalent amount of U.S. dollars, making it a stable coin with a price pegged to U.S. Dollar $1.00. | |
| · | Token: A unit of a crypto asset or other instrument secured by and recorded on a blockchain. Tokens could include the primary units of a blockchain as in Ethereum or Bitcoin, or be a separate construct whose ownership is recorded using such a blockchain as in an ERC-20 Token, whose ownership might convey any number of properties. |
| · | Transaction: The transfer of Bitcoin or a crypto asset from one Address to one or more Addresses. The Transaction is validated by Nodes and Miners according to the Protocol and specifically must be signed using the private key of the sending Address to be included in a block, whereby it becomes Confirmed. | |
| · | Wallet: A place to store public and private keys for crypto assets. Wallets are typically software, hardware, or paper-based. |
| · | Wire Transfer: A permanent inter-bank transfer on a national or international settlement system including the Fedwire system in the United States or the SWIFT international system but excluding non-permanent systems like ACH (Automated Clearing House, a computer-based network that allows financial institutions to electronically process transactions). |
| iv |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Report”), including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements, within the federal securities laws, regarding future events and the future results of Athena Bitcoin Global (the “Company”) that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.
All forward-looking statements reflect our current views as of the date of the filing of this Report. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in, or suggested by, the forward-looking statements we make in this Report are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
Factors that might cause or contribute to such differences include, but are not limited to, statements about:
| · | our future financial performance, including our expectations regarding our revenue, operating expenses, and our ability to achieve and maintain future profitability; | |
| · | our business plan and our ability to effectively manage our growth; | |
| · | our ability to raise sufficient capital to support our operations and satisfy outstanding liabilities and judgments; | |
| · | anticipated trends, growth rates, and challenges in our business, the crypto economy, and in the markets in which we operate; | |
| · | market acceptance of our products and services; | |
| · | beliefs and objectives for future operations; | |
| · | our ability to further penetrate our existing customer base and maintain and expand our customer base; | |
| · | our ability to develop new products and services and grow our business in response to changing technologies, customer demand, and competitive pressures; | |
| · | our expectations concerning relationships with third parties; | |
| · | our ability to maintain, protect, and enhance our intellectual property; | |
| · | our ability to continue to expand internationally; | |
| · | the effects of increased competition in our markets and our ability to compete effectively; | |
| · | future acquisitions of or investments in complementary companies, products, services, or technologies and our ability to successfully integrate such companies or assets; | |
| · | our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally; | |
| · | economic and industry trends, projected growth, or trend analysis; | |
| · | trends in revenues, cost of revenues, and gross margin; | |
| · | trends in operating expenses, including technology and development expenses, sales and marketing expenses, and general and administrative expenses, and expectations regarding these expenses as a percentage of revenue; | |
| · | increased expenses associated with being a public company; | |
| · | other risks and uncertainties, including those described under Risk Factors, herein; and | |
| · | other statements regarding our future operations, financial condition, and prospects and business strategies. |
All forward-looking statements and projections attributable to us or persons acting on our behalf apply only as of the date of this Report and are expressly qualified in their entirety by the cautionary statements included in this Report. We undertake no obligation to publicly update or revise any written or oral forward-looking statements made by us or on our behalf, including any of the projections presented herein, to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.
| v |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents, net | $ | $ | ||||||
| Restricted cash held for customers | ||||||||
| Crypto assets held, net | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Property and equipment, net | ||||||||
| Software development, net | ||||||||
| Right of use assets – operating leases | ||||||||
| Other noncurrent assets | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable, related-party | ||||||||
| Liability for cash held for customers | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Income tax payable | ||||||||
| Short-term debt | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Deferred tax liabilities, net | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ par value shares authorized; shares issued and outstanding as of March 31, 2026, and December 31, 2025 | ||||||||
| Common stock, $ par value shares authorized; shares issued and outstanding as of March 31, 2026, and December 31, 2025 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 1 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(in thousands, except share and per share amounts)
| For the three months ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Technology and development | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Other operating expense (income) | ( | ) | ||||||
| Total operating expenses | ||||||||
| (Loss) income from operations | ( | ) | ||||||
| Interest expense | ||||||||
| Fees on virtual vault services | ||||||||
| Other (income) expense | ( | ) | ||||||
| (Loss) income before income taxes | ( | ) | ||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Basic (loss) earnings per share | $ | ( | ) | $ | ||||
| Diluted (loss) earnings per share | $ | ( | ) | $ | ||||
| Weighted average shares outstanding - Basic | ||||||||
| Weighted average shares outstanding - Diluted | ||||||||
| Comprehensive (loss) income | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Foreign currency translation adjustment, net of tax | ( | ) | ||||||
| Comprehensive (loss) income | $ | ( | ) | $ | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 2 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| For the three months ended | ||||||||
| March 31, 2026 |
March 31, 2025 |
|||||||
| Operating activities | ||||||||
| Net (loss) income | $ | ( |
) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Unrealized loss of crypto assets held | ||||||||
| Realized loss on crypto assets, net | ||||||||
| Bitcoin payments for expenses | ||||||||
| Bitcoin received from independent Bitcoin ATM operators [affiliates program] | ( |
) | ||||||
| Loss on disposal of property and equipment | ||||||||
| Deferred income tax | ( |
) | ( |
) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Crypto assets held | ( |
) | ||||||
| Accounts receivable | ( |
) | ||||||
| Prepaid expenses and other assets | ||||||||
| Liability for cash held for customers | ( |
) | ||||||
| Accounts payable and other liabilities | ( |
) | ( |
) | ||||
| Net cash provided by operating activities | ||||||||
| Investing activities | ||||||||
| Purchases of property and equipment | ( |
) | ( |
) | ||||
| Proceeds from sale of property and equipment | ||||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Financing activities: | ||||||||
| Repayment of debt | ( |
) | ( |
) | ||||
| Payments in reduction of equipment notes payable | ( |
) | ( |
) | ||||
| Net cash used in financing activities | ( |
) | ( |
) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( |
) | ||||||
| Net (decrease) increase in cash and cash equivalents | ( |
) | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 3 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
(in thousands)
| For the three months ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Cash, cash equivalents, and restricted cash consisted of the following: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash held for customers | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Leased assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Supplemental schedule of non-cash investing and financing activities: | ||||||||
| Property and equipment purchased in accounts payable | $ | $ | ||||||
| Software development purchased in accounts payable | $ | $ | ||||||
| Imputed interest on property and equipment financed with equipment notes payable | $ | $ | ||||||
| Bitcoin used to buy property and equipment | $ | $ | ||||||
| Bitcoin and Stablecoin used for other payments | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 4 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(in thousands, except number of shares)
| Common Stock | Additional Paid-in | Accumulated Income | Accumulated Other Comprehensive | |||||||||||||||||||||
| Shares | Amount | Capital | (Deficit) | Loss | Total | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net income | – | |||||||||||||||||||||||
| Foreign currency translation adjustment | – | |||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| 5 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except number of shares)
NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Athena Bitcoin Global, a Nevada corporation, and its wholly-owned subsidiary, Athena Bitcoin, Inc., a Delaware corporation (together referred to as “Athena Global” or the “Company”) is a provider of various crypto asset transaction platforms, including the operation of automated teller machines (“ATMs”) and personalized services (“Athena Plus”) for the purpose of selling and buying crypto assets, white-label operations and payment services. The Company’s network of Athena Bitcoin ATMs (“Athena ATMs”) is active in thirty-four states and the territory of Puerto Rico in the United States, and 4 countries in Central and South America as of March 31, 2026. The Company places its machines in convenience stores, shopping centers, and other easily accessible locations.
Athena Bitcoin Global was incorporated in the state of Nevada in 1991 under the name “GamePlan, Inc.” for the sole purpose of merging with Sunbeam Solar, Inc., a Utah corporation, which merger occurred as of December 31, 1991. The Articles of Merger were filed in the state of Nevada pursuant to which the Company was the surviving entity following the merger.
On January 14, 2020, Athena Bitcoin Global entered into a Share Exchange Agreement (the “Exchange Agreement”), with Athena Bitcoin, Inc., a Delaware corporation (“Athena”) founded in 2015, and certain shareholders of Athena. The Agreement provided for the reorganization of Athena, with and into Athena Bitcoin Global, resulting in Athena becoming a wholly-owned subsidiary of the Company upon the closing of the transaction. The Exchange Agreement was for the exchange of 100% of the outstanding common stock of Athena, for 3,593,644,680 shares of the Company’s common stock (an exchange rate of 1,244.69 shares of the Company’s stock for each share of Athena stock). The closing of the transaction occurred as of January 30, 2020.
As the result of this transaction, the former shareholders of Athena acquired the majority (88%) of the voting rights of the Company and Athena had control of the Company’s board of directors. Also, the senior management of Athena became the management of the combined entity. Therefore, the Company determined that the Share Exchange Agreement was a reverse acquisition as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-10-55-12, and Athena is considered the accounting acquirer pursuant to FASB ASC 805-40-45-2. Accordingly, the historical financial statements prior to the Share Exchange Agreement are those of Athena, except that the historical equity of the Company has been retroactively restated to reflect the number of shares received in the business combination at the exchange rate of 1,244.69 shares of the Company’s common stock for each share of Athena common stock. All share and per share information included in these condensed consolidated financial statements have been adjusted to reflect the 1,244.69 to 1 share conversion.
Effective April 15, 2021, the Company changed its name to Athena Bitcoin Global from GamePlan, Inc.
Athena Bitcoin Global has authorized capital of shares as of March 31, 2026 and December 31, 2025 of which shares are issued and outstanding as of March 31, 2026 and December 31, 2025.
| 6 |
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of Athena Bitcoin Global, Athena Bitcoin, Inc. and its wholly-owned subsidiaries, Athena Bitcoin S. de C.V., incorporated in Mexico; Athena Holdings Colombia SAS, incorporated in Colombia; Athena Holding Company S.R.L, incorporated in Argentina; Athena Holdings of PR LLC, incorporated in Puerto Rico; Athena Holdings El Salvador, S.A. de C.V., incorporated in El Salvador; and Athena Business Holdings Panama S.A. incorporated in Panama. All significant intercompany account balances and transactions have been eliminated in consolidation.
A summary of the Company’s significant accounting policies is as follows:
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates
The preparation of the condensed consolidated financial statements, in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Significant estimates and assumptions made by management are used for, but not limited to, present value of lease liabilities and right-of-use assets, contingencies, valuation of current and deferred income taxes and impairment assessment for long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Revenue Recognition
The Company derives its recurring revenues primarily from three sources: (i) sale of crypto assets at Bitcoin ATMs (both Athena ATMs and White-label ATMs such as those in El Salvador), (ii) customized investor trading services for the sale or purchase of crypto assets through the Company’s Athena Plus desk (referred to as “over-the-counter” or “OTC”), and (iii) Athena Pay which is a payment processor application (“app”); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin. The Company also generates revenue from ancillary items, such as sale of intellectual property and maintenance of software.
Under FASB ASC 606, Revenue from Contracts with Customers (“FASB ASC 606”), the Company recognizes revenue at the point of sale or over time of the service period for these products or services to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Pursuant to FASB ASC 606, the Company recognizes revenue by applying the following steps:
| · | Identification of the contract, or contracts, with a customer | |
| · | Identification of the performance obligations in the contract | |
| · | Determination of the transaction price | |
| · | Allocation of the transaction price to the performance obligations in the contract | |
| · | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
The Company recognizes revenue when the performance obligations identified under the terms of contracts with its customers are satisfied.
| 7 |
Judgment is required in determining whether we are the principal or the agent in transactions between customers. We evaluate the presentation of revenue on a gross or net basis based primarily on inventory risk (are we at risk for potential fluctuations of the crypto asset price) and whether we control the crypto asset provided before it is transferred to the customer or whether we act as an agent by arranging for others to provide the crypto asset to the customer. The Company determined it acts as the principal in each of its revenue streams. The Company enters into contracts that may include multiple performance obligations. The Company identifies the promises in the contract and assigns them to their appropriate performance obligation. These performance obligations may be part of a different revenue source and are listed separately below.
Athena ATM & White-label Service
Athena ATM
The Company requires all users of the Athena ATMs to agree to ATM Terms of Service which stipulate the terms and conditions of the transaction. The user, by inserting sovereign currency (known as fiat) and confirming that they agree to the transaction, is agreeing to the contract that governs the transaction.
The Company has a single performance obligation to provide a specific quantity of a Bitcoin to the customer’s crypto wallet in exchange for fiat. The Company utilizes a mark-up for crypto assets sold to the customer. Athena ATMs permit customers to purchase as little as one US dollar of Bitcoin, and it records the gross cash received from the customer as the transaction price.
Revenue is recognized at the point in time when the Bitcoin is delivered to the customer’s crypto wallet. Delivery to the customer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.
White-label Service
In this revenue stream, “client” refers to the entity contracting with the Company while “customer” refers to the person using the White-label ATM. The Company entered into multiple contracts that govern the white-label service for ATMs located in El Salvador and in the United States. The contracts permit the clients to terminate the contract at any point or to adjust the number of ATMs that are in use without a substantive penalty.
The Company operates White-label ATMs on behalf of the clients and the installation of the ATMs is performed by a third-party which is chosen by the White-label ATM client.
The operations, on behalf of the White-label client, include cash logistics services, and testing the ATMs. The Company charges a fixed fee each month for operating the ATMs.
The Company leases Company-owned ATMs to its clients. The Company elected the expedient in FASB ASC 842, Leases (“ASC 842”), which permits combining the lease and non-lease components together if the lease component has the same timing and pattern of transfer as the non-lease component and the lease component is an operating lease. Both of these conditions are met (for a more detailed discussion see Leases within NOTE 1 of the unaudited condensed consolidated financial statements).
The Company is considered the principal, as it controls any third-party good or service before it is transferred to the client.
For operating the White-label ATM, revenue is recognized straight line over the requisite service period.
| 8 |
Athena Plus (Over-The-Counter or OTC)
The Company requires all users of Athena Plus (a.k.a. “Over-The-Counter” or “OTC”) to agree to Athena Plus Terms of Service. The Athena Plus Terms of Service stipulate the terms and conditions of the transaction. The user, by wiring fiat to the Company’s bank account, is agreeing to the contract that governs the transaction.
The Company provides a specific quantity of a Bitcoin to the customer’s crypto wallet. The Company utilizes a mark-up for crypto assets sold to the customer. The minimum transaction is $10 (or equivalent value of local currency). The Company records the gross cash received from the customer as the transaction price for the transaction.
Revenue is recognized at the point in time when the Bitcoin is delivered to the customer’s crypto wallet. Delivery to the customer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.
Athena Pay
The Company requires all retailers who are using Athena Pay to execute the Athena Pay contract which stipulates the terms and conditions of the transactions. As a payment processor, the Company recognizes a processing fee of approximately 2.5% (average) of the transaction amount, when the transaction occurs (i.e., when the retailer generates the QR code with the specific amount to be charged to the customers in Bitcoin and the transaction is completed).
Revenue is recognized at the point in time when the Bitcoin is delivered to the retailer’s crypto wallet. Delivery to the retailer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the transaction is completed.
Cost of Revenues
Cost of revenues consists primarily of expenses related to the acquisition of Bitcoin; including the costs to purchase Bitcoin from users of the Company’s ATMs and from third-party exchanges which are assigned on a first-in, first-out basis, and cost of revenues includes the costs of operating the ATMs from which Bitcoin are sold (including the associated rent expense, related incentives, ATM cash losses, software licensing fees for the ATMs, depreciation, insurance, and utilities), crypto asset valuation gain or loss and fees paid to service the ATMs and the transport of cash to the banks.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash maintained at various financial institutions, cash in transit, and cash in ATMs owned and leased by the Company.
The Company maintains cash balances at various financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (FDIC) up to $250 per institution. The Company has deposits in excess of the FDIC-insured limit. The Company has not experienced any losses in such accounts and believes that it is not exposed to significant credit risk due to the financial position of the depository institutions, third-party crypto exchanges or investment vehicles in which those deposits are held. The Company has significant cash in ATMs, held on various third-party crypto exchanges and in transit with cash logistic providers. Management evaluates cash in transit based on outstanding cash deposits on cash picked up by the armored truck companies, historical cash deposits and cash that is lost during transit, which is immaterial. The armored truck companies maintain insurance over theft and losses.
| 9 |
Cash in transit consists of cash that is picked up
by armored truck companies from the Company’s ATMs but not yet deposited in the Company’s bank accounts. As of March 31, 2026
and December 31, 2025, the Company had cash in transit of $
Restricted Cash Held for Customers
Restricted cash held for customers consists of money on hand received from customers of the White-label clients for replenishment of ATMs.
Accounts Receivable
Accounts receivable are unconditional, uncollateralized customer obligations and are stated at the amount the Company expects to collect. The carrying amount of accounts receivable is reduced by an allowance for credit losses. The Company’s allowance for credit losses represents the estimate of expected credit losses related to accounts receivable. To estimate the allowance for credit losses, the Company leverages information on historical losses, asset-specific risk characteristics, current conditions and reasonable and supportable forecast of future conditions. Account balances are written off against the allowance when the Company deems the amount is uncollectable.
The Company measures collectability of its accounts
receivables using the current expected credit loss (“CECL”) method. The measurement of CECL applies to all financial assets
measured at amortized cost, including receivables for revenue. The Company recognized
Software Development Costs
The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by FASB ASC 350-40 “Internal-Use Software Accounting, Capitalization”. Costs are capitalized once the project is defined, funding is committed, and it is confirmed the software will be used for its intended use. Capitalization of these costs concludes once the project is substantially complete and the software is ready for its intended purpose.
Capitalized software consists of costs related to the design, coding, testing and documentation of software, as well as salaries and compensation costs for employees, fees paid to third-party consultants who are directly involved in development efforts, and costs incurred for upgrades and enhancements to add functionality of the software. Other costs that do not meet the capitalization criteria are expensed as incurred. The criteria for capitalization include the completion of the preliminary project stage, demonstration of feasibility of the project and the ability to reliably estimate future economic benefits. Capitalized software is subject to periodic impairment tests to ensure that the carrying value of the asset is not overstated. If an impairment is identified, the carrying value of the capitalized software will be reduced to its recoverable amount. Software development is amortized over its estimated useful life of five years.
In accordance with FASB ASC 350-30-65 “Goodwill and Other Intangible Assets”, the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important, which could trigger an impairment review include the following:
| 1. | Significant underperformance compared to historical or projected future operating results; | |
| 2. | Significant changes in the manner or use of the acquired assets or the strategy for the overall business; and | |
| 3. | Significant negative industry or economic trends. |
| 10 |
When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.
There was
Leases
The Company determines if an arrangement is a lease at inception. The Company determines if an arrangement is a lease, or contains a lease, primarily by determining if the arrangement conveys to the Company the right to control or use an identified asset. The Company classifies its arrangements for ATM retail spaces as operating leases. The Company has classified certain arrangements for ATMs as finance leases. The Company does not have any significant arrangements where it is the lessor.
The Company elected to separate lease and non-lease components for arrangements where the Company is a lessee. The Company determined the relative standalone price of the separate lease components and non-lease components by utilizing observable information to estimate the standalone price of each component. The Company allocated the consideration on a relative standalone price basis to the separate lease components and the non-lease components of the contract.
Leases with an initial lease term of 12 months or less are not recorded on the condensed consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term.
Operating and finance lease right of use (“ROU”) assets and operating and finance lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The right of use assets is shown net of amortization. The Company’s leases do not contain material residual value guarantees or material restrictive covenants. For purposes of calculating lease obligations, the Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The discount rate used to measure the Company’s lease obligation is its incremental borrowing rate at lease commencement. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term while finance lease ROU assets are amortized on a straight-line basis and interest expense is recorded over the lease term based on the incremental borrowing rate and the amount of lease liability outstanding during each month.
The operating and finance lease assets also include any initial direct costs and lease payments made prior to lease commencement and excludes lease incentives incurred.
Concentration of Credit Risk
The Company’s revenues, other than White-label services discussed below (as well as in Revenue Recognition Athena ATMs & White-label Service, Athena Bitcoin ATM, in NOTE 1), are generated primarily from ATM sales to customers. As the Company collects all amounts from these customers and holds $0 in accounts receivable from its ATM or Athena Plus (Over-the-Counter) customers, there is no credit risk associated with customer concentration for these customers.
| 11 |
The Company has revenues from White-label services in El Salvador and ancillary sales to customers where it provides services on customary credit terms, typically Net 30 or Net 60. As of March 31, 2026, and December 31, 2025, one customer, Chivo, Sociedad Anónima de Capital Variable (“Chivo”), represented substantially all of the Company’s total accounts receivable balance.
No single customer is responsible for over 10% of revenue for the three months ended March 31, 2026, and 2025.
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated depreciation. Equipment is depreciated over the estimated useful lives of the assets. Repairs and maintenance costs are expensed as incurred.
Following are the estimated useful lives by type:
| Description | Estimated Useful Life |
| Computer equipment | |
| ATM equipment | |
| Office equipment |
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment
in accordance with FASB ASC 360 – Property, Plant and Equipment whenever events or changes in circumstances have indicated that
an asset may not be recoverable. Management has determined there was
Crypto Assets Held, Net
The Company’s crypto assets are Bitcoin and Stablecoin and they are considered indefinite-lived intangible assets. Effective January 1, 2025, the Company measures crypto assets held at fair value. The Company determines the fair value of its Bitcoin and Stablecoin based on quoted (unadjusted) prices on CoinMarketCap.
The Company purchases Bitcoin, which is held in the Company’s hot wallets, on a just-in-time basis to facilitate sales to customers and mitigate exposure to volatility in Bitcoin prices. The Company only transacts in Bitcoin at its ATMs in exchange for cash, on a predetermined markup at the time of the transaction. However, there may be multiple days between the purchase of the Bitcoin and the sale of the Bitcoin. When Bitcoin is sold to customers, the Company recognizes the market value of the crypto asset within cost of revenue.
| 12 |
Expenses Paid in Bitcoin
The Company enters into agreements with certain vendors and service providers that provide us with the option to settle their invoices in Bitcoin. The amount due is fixed and is denominated in USD. There are no payment terms that include conversion options, variable settlement features, or alternative settlement provisions contingent upon future events or market price fluctuations that could potentially give rise to embedded derivatives.
The Company considers the guidance in FASB ASC 350, FASB ASC 606, FASB ASC 610, and FASB ASC 845 when it evaluates the derecognition of its Bitcoin paid to vendors in lieu of cash payments. In these transactions, the Company has been invoiced by a vendor and given the option to pay in USD or Bitcoin. The amount of Bitcoin is determined by the market price in accordance with the guidance of FASB ASC 820. The Company records as an expense the USD value of the invoice and then considers the above-referenced guidance to determine the proper way to derecognize the indefinite-lived intangible assets used as payment.
The Company records invoices from vendors in USD and for vendors who elect to be paid in Bitcoin, the Company transfers Bitcoin at market value at the time of transfer in line with ASC 820, Fair Value Measurement. The Company then recognizes as a gain or loss, the difference between the current carrying value of Bitcoin and its value at the time of transfer to cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss).
The Company had losses related to the derecognition
of Bitcoin of $
Foreign Currency
The functional currency of the Company’s foreign
operations is generally the local currency. For these foreign entities, the Company translates their financial statements into U.S. dollars
using average exchange rates for the period for income statement amounts and using end-of-period exchange rates for assets and liabilities.
The Company records these translation adjustments in accumulated other comprehensive income (loss), a separate component of equity, in
the Company’s condensed consolidated balance sheets. The Company had foreign currency translation (loss) gain adjustments of ($
The Company records exchange gains and losses resulting from the conversion of local currency to functional currency as a component of other income (expense).
Stock-based compensation expense is recorded as a result of stock options, restricted stock units and restricted stock granted in return for services rendered. The stock-based payment arrangements with employees were accounted for under ASU 718, “Compensation - Stock Compensation”.
The Company accounts for stock-based compensation for all stock-based awards made to employees and directors, including employee stock options and non-vested stock awards, based on the fair values on the dates they are granted. The Company records the fair value of awards expected to vest as compensation expense on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
The Company uses the Black-Scholes option pricing
model for determining the estimated fair value for stock-based awards. The Black-Scholes option pricing model requires the use of highly
subjective and complex assumptions, which determines the fair value of stock-based awards, including the options expected term, expected
volatility of the underlying stock, risk-free rate, and expected dividends. The expected volatility is based on the average historical
volatility of certain comparable publicly traded companies within the Company’s industry. The expected term assumptions are based
on the simplified method, due to insufficient historical exercise data and the limited period of time that the Company’s equity
securities have been available for issuance. The risk-free interest rates are based on the U.S. Treasury yield in effect at the time of
grant. The Company does not expect to pay dividends on common stock in the foreseeable future; therefore, it estimated the dividend yield
to be
| 13 |
For a more detailed discussion of stock-based compensation, see NOTE 10. STOCK-BASED COMPENSATION.
stock-based compensation was recognized during the three months ended March 31, 2026 and 2025.
Warrants to Purchase Common Stock
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and FASB ASC 815, Derivatives and Hedging (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, they are recorded at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as a non-cash gain or loss in the condensed consolidated statements of operations and comprehensive income (loss).
As of March 31, 2026 and December 31, 2025,
Income Taxes
Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which are recorded on the condensed consolidated balance sheets in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the condensed consolidated statements of operations and comprehensive income (loss).
The Company recognizes interest and penalties related to uncertain tax benefits on the income tax expense line in the accompanying condensed consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the condensed consolidated balance sheets.
ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s condensed consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As a result of the implementation of ASC 740-10, the Company does not have a liability for unrecognized income tax benefits.
| 14 |
Segment Reporting
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a global consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. While the Company does have revenue from multiple products and geographies, no measures of profitability by product or geography are available, so discrete financial information is not available for each such component. As such, the Company has determined that it operates as operating segment and reportable segment.
Basic (loss) earnings per share is calculated by dividing net income by the number of weighted average common shares outstanding for the applicable period, excluding the shares exercised from the proceeds of the non-recourse loan. Diluted (loss) earnings per share is calculated by dividing net income available to common stockholders by the weighted average shares outstanding. Potentially dilutive shares, which are based on the weighted average shares of common stock underlying outstanding stock-based awards, warrants and convertible senior notes using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income per share of common stock attributable to common stockholders when their effect is dilutive.
The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of outstanding convertible securities is reflected in diluted earnings per share by application of the if-converted method.
The following is a reconciliation of basic and diluted (loss) earnings per common share for the three months ended March 31, 2026, and 2025 (in thousands, except share amounts):
| March 31, 2026 | March 31, 2025 | |||||||
| Basic (loss) net earnings per share: | ||||||||
| Numerator | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Denominator | ||||||||
| Weighted-average shares of common stock used to compute net (loss) earnings per share attributable to common stockholders, basic | ||||||||
| Net (loss) earnings per share attributable to common stockholders, basic | $ | ( | ) | $ | ||||
| Diluted net earnings per share: | ||||||||
| Numerator | ||||||||
| Net (loss) income, basic | $ | ( | ) | $ | ||||
| Add: Interest expense on convertible debt | ||||||||
| Net (loss) income, diluted | $ | ( | ) | $ | ||||
| Denominator | ||||||||
| Weighted-average shares of common stock used to compute net (loss) earnings per share attributable to common stockholders, basic | ||||||||
| Weighted-average effect of potentially dilutive securities: convertible debt | ||||||||
| Unexercised warrants | ||||||||
| Weighted-average shares of common stock used to compute net (loss) earnings per share attributable to common stockholders, diluted | ||||||||
| Net (loss) earnings per share attributable to common stockholders, diluted | $ | ( | ) | $ | ||||
There were anti-dilutive securities for the three months ended March 31, 2026, and 2025.
| 15 |
Accounting Pronouncements Pending Adoption
In October 2023, the FASB issued ASU 2023-06 "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosures Update and Simplification Initiative". The guidance amends certain disclosure and presentation requirements related to the statement of cash flows, accounting changes and error corrections, earnings per share, interim reporting, commitments, debt, equity, derivatives, transfers and services and various industry specific guidance. For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the existing disclosure requirements, the amendments will not become effective. Early adoption is not permitted. The Company is in the process of assessing the overall impact of adopting this guidance on its disclosures.
In November 2024, the FASB issued ASU 2024-03. "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)". The ASU requires expanded disclosures and disaggregation of certain expenses included within the income statement. The amendments become effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is still assessing the impacts of this guidance on its condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.
| 16 |
Fair Value of Financial Statements
ASC 820, Fair Value Measurement, establishes a three-level valuation hierarchy for disclosure of fair value measurements. Under the FASB’s authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods, including the market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
| Level 1: | Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. | |
| Level 2: | Observable inputs other than Level 1, including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. | |
| Level 3: | Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single-dealer quotes not corroborated by observable market data. |
The Company has various processes and controls in place to ensure that fair value is reasonably estimated. A model validation policy governs the use and control of valuation models used to estimate fair value. This policy requires review and approval of models, and periodic re-assessments of models to ensure that they are continuing to perform as designed. The Company performs due diligence procedures over third-party pricing service providers in order to support their use in the valuation process. Where market information is not available to support internal valuations, independent reviews of the valuations are performed, and any material exposures are escalated through a management review process.
While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. To the extent that the valuation method is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised in determining fair value is greatest for the financial instruments categorized in Level 3.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
During the three months ended March 31, 2026 and 2025, there were no changes to the Company’s valuation techniques that had, or are expected to have, a material impact on its condensed consolidated balance sheets or condensed consolidated statements of operations and comprehensive income (loss).
The Company did not make any transfers between the levels of the fair value hierarchy during the three months ended March 31, 2026 and 2025.
The carrying amounts for cash equivalents, restricted cash, accounts receivable, accounts payable, other current liabilities, short-term debt, convertible debt related-party, and equipment notes payable approximate fair value.
| 17 |
NOTE 2. REVENUE
The table below presents revenue of the Company disaggregated by revenue source for the three months ended:
| March 31, 2026 | March 31, 2025 | |||||||
| Bitcoin ATMs (Athena and White-label) | $ | $ | ||||||
| Athena Plus (OTC) | ||||||||
| Athena Pay, ancillary and other | ||||||||
| $ | $ | |||||||
The Company recognized $
The table below presents revenues by geographic territories based on sales location for the three months ended:
| March 31, 2026 | March 31, 2025 | |||||||
| Revenue | ||||||||
| United States | $ | $ | ||||||
| El Salvador | ||||||||
| Argentina, Colombia & Mexico | ||||||||
| $ | $ | |||||||
Contracts with Chivo, Sociedad Anónima de Capital Variable of El Salvador
In the third quarter of 2021, the Company installed and began operating:
| i. | 200 white-labeled ATMs in El Salvador, | |
| ii. | 10 white-labeled ATMs at El Salvador consulates in the U.S., | |
| iii. | 45 white-labeled ATMs in other U.S. locations, and | |
| iv. | sold 950 point-of-sale (POS) terminals for local businesses in El Salvador to process transactions (under Athena Pay) in Bitcoin to the Ministerio de Hacienda (Department of Treasury) of El Salvador (“GOES”). |
Additionally, the Company contracted to:
| i. | the sale of software, | |
| ii. | develop a Bitcoin platform designed to support a GOES branded digital wallet, and | |
| iii. | maintain the GOES digital wallet. |
| 18 |
On December 20, 2024, a three-year Master Services Agreement (“MSA”) and a Service Level Agreement (“SLA”) with Chivo was signed effective December 1, 2024. The MSA and SLA include the description of services, performance obligations, pricing and terms as well as the conditions to a credit facility of $600 for Chivo’s use at any time. The conditions of the credit facility are:
| a) | that the cash is the property of Athena Bitcoin S. de C.V., incorporated in Mexico (“Athena SV”), the Company’s wholly-owned subsidiary: | |
| b) | Chivo would need to deposit the amount of funds they needed in Athena SV’s bank account (resulting in a pre-funded credit facility) and Athena would release the funds to Chivo from the ATM pick-ups, and | |
| c) | the credit facility has a monthly fee of |
There were
NOTE 3. ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following as of March 31, 2026, and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| White-label fee receivable | $ | $ | ||||||
| Others | ||||||||
| $ | $ | |||||||
NOTE 4. CRYPTO ASSETS HELD, NET
The Company held the following crypto assets as of March 31, 2026, and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Qty (1) | Average Rate | Amount | Qty (1) | Average Rate | Amount | |||||||||||||||||||
| Bitcoin | $ | $ | $ | $ | ||||||||||||||||||||
| Stablecoin | ||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||
| (1) |
| 19 |
The tables below show the roll-forward of quantity and costs of various crypto assets traded by the Company:
| Bitcoin | Stablecoin | |||||||||||||||
| Three months ended | Qty(1) | Cost | Qty(1) | Cost | ||||||||||||
| January 1, 2025 | $ | $ | ||||||||||||||
| Purchases | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Unrealized loss on crypto assets | ( | ) | ||||||||||||||
| Crypto assets used for expenses | ( | ) | ||||||||||||||
| Crypto assets used for capital expenditure | ( | ) | ( | ) | ||||||||||||
| Crypto assets used for other payments | ( | ) | ( | ) | ||||||||||||
| March 31, 2025 | $ | $ | ||||||||||||||
| Bitcoin | Stablecoin | |||||||||||||||
| Three months ended | Qty(1) | Cost | Qty(1) | Cost | ||||||||||||
| January 1, 2026 | $ | $ | ||||||||||||||
| Purchases | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Unrealized loss on crypto assets | ( | ) | ||||||||||||||
| Bitcoin received for independent Bitcoin ATM operators [affiliates program] | ||||||||||||||||
| Crypto assets used for expenses | ( | ) | ( | ) | ||||||||||||
| March 31, 2026 | $ | $ | ||||||||||||||
| (1) |
NOTE 5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following as of March 31, 2026, and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| ATM Equipment | $ | $ | ||||||
| Computer equipment | ||||||||
| Office equipment | ||||||||
| Less accumulated depreciation | ||||||||
| Total property and equipment | $ | $ | ||||||
Depreciation expense for the three months ended March
31, 2026, and 2025 was $
| 20 |
NOTE 6. SOFTWARE DEVELOPMENT, NET
During the second quarter of 2024, the Company entered into a Development Services Agreement with PSBC, LLC, a third-party Delaware corporation, for a software platform to use in connection with the operation of Bitcoin ATMs. The Company implemented and began to use the software platform in June 2024.
On May 14, 2025, the Company entered into a Second Amendment to the Development Services Agreement with PSBC, LLC, pursuant to which PSBC, LLC agreed to provide support services through November 14, 2025, and we agreed to pay PSBC, LLC, $50 per month beginning on May 14, 2025. The balance of this Development Services Agreement was settled with the September 4, 2025 Release and Termination Agreement with Taproot Acquisition Enterprises, LLC, a Delaware limited liability company (“Taproot”), and its affiliated entities which terminated and settled all outstanding obligations under several prior arrangements, including this Development Services Agreement (please refer to NOTE 9. NOTES PAYABLE – Short-term debt for detailed descriptions).
The Company’s capitalized software development
cost is $
| March 31, 2026 | December 31, 2025 | |||||||
| Capitalized software | $ | $ | ||||||
| Less accumulated amortization | ||||||||
| Total capitalized software | $ | $ | ||||||
NOTE 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets are mostly composed of prepayment to the Company’s taxes, rent, insurance and security deposits. The components of prepaid expenses and other current assets consisted of the following as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| Prepaid expenses and other current assets: | ||||||||
| Prepaid expenses | $ | $ | ||||||
| Prepaid taxes | ||||||||
| Other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
| 21 |
NOTE 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following as of March 31, 2026, and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||
| Accounts payable and accrued expenses: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
NOTE 9. NOTES PAYABLE
Equipment notes payable
On September 19, 2024, the Company and Taproot Acquisition
Enterprises, LLC, a Delaware limited liability company (“Taproot”), entered into that certain Omnibus Equipment Refinancing
Agreement providing for the refinance of the Company’s debt obligations previously incurred in connection with the purchase of Bitcoin
ATMs pursuant to previously entered into equipment financing agreements for the purchase of equipment (“Equipment”) by the
Company from Taproot. The parties agreed that the total outstanding balance of $
On October 30, 2024, the Company entered with Taproot,
into an Equipment Financing Agreement (the “Agreement”) to purchase certain Bitcoin ATMs listed in the Agreement. The Agreement
amends and supersedes the previous equipment purchase agreements between the parties. Under the Agreement, the Company will acquire from
Taproot installed Bitcoin ATMs or additional Bitcoin ATMs at the price per Bitcoin ATM set forth in the Agreement. The downpayment shall
be paid in 4 installments with the first payment due and paid by the Company as of October 31, 2024, and the last payment was due by January
31, 2025; and was made on January 27, 2025. As of March 31, 2026, and December 31, 2025, the outstanding principal was $
In addition, the Company was responsible for paying
a certain percentage fee (0.8%) of the revenue (to be paid weekly) derived from the sale of Bitcoin in each Bitcoin ATM location until
the expiration of the term of the Agreement (36 months) or until full payment of total purchase price for the Equipment subject to certain
additional limitations. The Agreement also provides the provisions addressing the event of default by either Taproot or the Company, and
respective available remedies. Certain property on which the Equipment units are located are subject to merchant agreements (as listed
in the Agreement), The Agreement provides for assignment and assumption of merchant agreements and leases, as may be applicable. Furthermore,
Taproot desires to maintain a first priority interest on the Bitcoin ATMs until it is fully paid for. In connection therewith, the Company,
Taproot and KGPLA Holdings LLC (“KGPLA”), an entity in which Mike Komaransky, a former director and principal shareholder
of the Company has a controlling interest and whose Chief Investment Officer is Huaxing “Jason” Lu, our director, entered
into the First Amendment to the Intercreditor Agreement dated as of October 23, 2024, pursuant to which, KGPLA agreed to the subordination
of its first priority security position on collateral of the Company to Taproot. As of March 31, 2026, and December 31, 2025, the outstanding
principal balance was $
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Short-term debt
On February 26, 2024, the Company entered into a financing
agreement for $
On December 19, 2024, the Company entered into financing
agreements for $
On May 30, 2025, the Company entered into insurance
premium financing agreements for $
On September 4, 2025, the Company entered into a Release
and Termination Agreement with Taproot, and its affiliated entities (the “Taproot Parties”) to terminate and settle all outstanding
obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement,
the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. Under the terms of the Release
and Termination Agreement, the Company agreed to pay the Taproot Parties an aggregate Termination Payment of $
At the date of settlement, the carrying amount of
the debt obligation under the Equipment Financing Agreement was $
| a) | $ | |
| b) | $ | |
| c) | $ | |
| d) | $ |
As of March 31, 2026, and December 31, 2025, the outstanding
principal of the Release and Termination Agreement was $
On October 9, 2025, the Company entered into insurance
premium financing agreements for $
| 23 |
On December 30, 2025, the Company entered into insurance
premium financing agreements for $
Convertible debt, related-party
On January 31, 2020, the Company entered into a convertible
debenture agreement with KGPLA LLC. The convertible debenture provided for a principal amount of $
Maturities on the Company’s notes payable are as follows:
| 2026 | $ | |||
| Total payments on notes payable | $ | |||
Stock Option Plans
The Company has a 2021 Equity Incentive Plan (the “2021 Plan”) with million shares of common stock available to be awarded to eligible employees, directors, and consultants in the form of stock options, restricted stock, other awards, and any combination of the foregoing. million shares have been awarded under the 2021 Plan as of the date of these condensed consolidated financial statements for consulting services. As of March 31, 2026, and December 31, 2025, there were options outstanding under the plan.
The Company’s Board of Directors and its majority shareholders approved the 2025 Equity Compensation Plan (the “2025 Plan”) effective as of July 7, 2025. The 2025 Plan authorized the granting of up to shares of common stock to eligible employees, directors, and consultants in the form of stock options, restricted stock, restricted stock units (“RSUs”), other awards, and any combination of the foregoing. securities have been issued under the 2025 Plan as of the date of these condensed consolidated financial statements.
No shares of the Company’s common stock, options to purchase shares of the Company’s common stock or restricted stock units of the Company have been issued during the three months ended March 31, 2026, and 2025.
NOTE 11. WARRANTS
In 2017, Athena Bitcoin, Inc. issued warrants to purchase
| 24 |
The unexercised warrants
to purchase
The Company
does
NOTE 12. RELATED PARTY TRANSACTIONS
Aside from the transactions discussed in NOTE
9. NOTES PAYABLE to these condensed consolidated financial statements, the Company carries a payables balance to Red Leaf
Opportunities Fund LP which Eric Gravengaard, one of the Company’s principal shareholder, former director and the
Company’s former Chief Executive Officer, has a controlling interest in its General Partner, Red Leaf Advisors LLC, for
previous purchases of crypto assets. On or about April 9, 2025, the Company was notified of a “Turnover Order” dated
April 2, 2025, in the amount of $
The Company incurred cash logistics services of $
On February 7, 2024, the Company entered into a service
agreement with Move On Tech Service, LLC to provide ATM services for the Company’s ATM operations in various states. Move On Tech
Service, LLC is responsible for ATM management, periodic ATM maintenance, installation, and deinstallation. Mr. Matias Goldenhörn,
the Chief Executive Officer and director of the Company, has a 50% interest in Move On Tech Service, LLC. During the three months ended
March 31, 2026, and 2025, the Company incurred $
NOTE 13. FEES ON VIRTUAL VAULT SERVICES
Virtual Vault is a term used in the Armored Car and Cash Transport industry to define a service provided by armored car services for assets considered property of the bank when the bank does not have a physical vault or location in a given state or location. The Fees for virtual vault services included in the Company’s condensed consolidated statements of operations and comprehensive income are for a currency availability service provided to the Company by its bank for making funds held in a virtual vault immediately available to the Company. Neither the term nor the service is related to virtual currency or crypto assets.
Fees on Virtual Vault Services for the three months
ended March 31, 2026, and 2025, were $
NOTE 14. INCOME TAXES
The Company’s effective tax rate
(“ETR”) for the three months ended March 31, 2026 and 2025 was (
| 25 |
NOTE 15. COMMITMENTS AND CONTINGENCIES
The Company, from time to time, might have claims against it incidental to the Company’s business including but not limited to tax demands and penalties. While the outcome of any of these matters cannot be predicted with certainty, management does not believe that the outcome will have a material adverse effect on the accompanying condensed consolidated financial statements.
Employee Bonuses
As of March 31, 2026 and December 31, 2025, the Company
accrued $
Legal Matters
On October 9, 2023,
Arley Lozano-Jaramillo (“Lozano”), an individual, commenced proceedings against the Company by filing a complaint with the
11th Judicial Circuit Court for Miami-Dade County, Florida (the “Court”) which named the Company as the defendant. Lozano,
either individually or through the entities controlled by him (XPay, Vakano Industries) entered into certain non-binding letters of intent
on July 13, 2021 and as of September 2021 (the second letter of intent was a draft and not signed by the parties) pursuant to which Lozano
was a seller of certain assets and technology related to XPay Wallet, intellectual property regarding the AthenaPay POS System, XPay POS
System and related technology (the “XPay Assets”) for the proposed purchase price of $3,000 and 270,000,000 shares of common
stock of the Company (valued at $0.10 per share). The acquisition of the XPay Assets was subject to the execution of a definitive acquisition
agreement. No such agreement was finalized nor entered into by the parties. The Company made payments to Lozano for a total amount of
approximately $
The Company disputes
the allegations and continues to vigorously defend against them. Accordingly, the Company filed with the Court on February 9, 2024, a
motion to dismiss Lozano’s complaint. The Court granted the Company’s motion in part and denied in part, dismissing two of
the five causes of action. The Company then filed a counterclaim, to which Plaintiff filed an answer on October 6, 2024. The potential
loss related to the identified claim is between $0 and $
On August 20,
2024, Keon Jackson (“Jackson”), an individual, filed a putative class action complaint against Athena in the US District Court
for the Northern District of Florida (the “Court”). The complaint alleges receipt of unwanted telemarketing text messages
in alleged violation of Federal and State statutes while seeking class certification status. The claim by Jackson is for the award of
the statutory amounts as established in the corresponding statutes. On June 18, 2025, the Court issued an Order Granting Motion for Class
Certification. Additionally, on July 16, 2025, the Court entered an Order granting in part and denying in part Jackson’s motion
for summary judgment. The Court granted Jackson summary judgment under the Florida Telephone Solicitation Act (“FTSA”) as
to 4,512 instances, for which the statute provides damages of $
| 26 |
On September 9, 2024, S.M. on behalf of herself and all others (“S.M.”), an individual, filed a complaint that includes class action allegations, against Athena, Genesis Coin, Inc., and two other defendants, filed in the Court of Common Pleas, Cuyahoga County, Ohio. The complaint against Company alleges negligence and claims under the Ohio Products Liability Act arising from alleged elder-financial scams involving cryptocurrency kiosks. S.M. alleges the need for implementing effective and sufficient checks and procedures both at the kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what the Company already has in place. The claim by S.M. against Athena is for an undetermined amount of compensation. The claim seeks an unspecified amount of damages, as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. On October 25, 2024, S.M. filed its First Amended Class Action Complaint. The case was subsequently removed to the US District Court for the Northern District of Ohio, Eastern Division, where a motion to dismiss remains pending a decision from the court.
The motion to dismiss filed by Athena continues to be pending, and the parties await for this decision from the Court. There have been no new filings in the case made by S.M. pertaining to any additional amendment to her complaint.
On November 25, 2024, Karen Carew on behalf of herself and all others (“Carew”), an individual, filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Monmouth County (the “State Court”). The complaint against Athena asserts negligence claims and alleged violations of various New Jersey statutes, including statutes concerning consumer fraud, racketeering, and possession of stolen property. Carew alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what Athena already has in place. The claim by Carew against Athena is for an undetermined amount of compensation. The claim seeks an unspecified amount of damages, as well as injunctive relief.
After removing the case to Federal Court, the case was remanded to State Court as Carew filed an amended complaint removing all class action allegations, and becoming a sole plaintiff. Carew then filed a second amended complaint on July 16, 2025 at the State Court where she is still the sole plaintiff. A motion to dismiss filed by Athena has been denied in part, for which the remaining causes of action persist. Athena filed its pleadings on January 16, 2026.
Although the Company disputes the claims and believes the allegations are based on flawed legal theories and incorrect factual assumptions, it has determined to settle the case in order to avoid additional legal expense. The settlement is not expected to have a material adverse effect on our financial condition and results of operations.
On January 21, 2025, Girma Yilma on behalf of himself and all others (“Yilma”), an individual, filed a complaint that includes class action allegations, against Athena, and two other retail establishments as defendants, filed in the District Court for Arapahoe County, Colorado. The complaint against the Company asserts claims under Colorado law, including the Colorado Consumer Protection Act and civil theft, as well as common-law claims for unjust enrichment, negligence, and negligent design. As in the previous two cases filed by the same plaintiff’s law firm, it alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what the Company already has in place. The claim by Yilma against the Company is for an undetermined amount of compensation The claim seeks an unspecified amount of damages, as well as injunctive relief.
Athena filed a motion to compel arbitration on March 21, 2025. After the Court was fully briefed, the case was administratively closed and referred to binding arbitration on August 13, 2025. Yilma initiated the arbitration proceedings under JAMS as established in Athena’s Terms of Service. In the August 13, 2025 JAMS the parties reached a confidential settlement agreement, where the mutual considerations have been completed including the termination of all proceedings with prejudice.
On January 31, 2025, Zamareeh Odoms (“Odoms”), an individual, through counsel sent an extrajudicial claim for $500 against Athena. The claim alleges lack of proper due diligence when recruiting or supervising an employee, agent or representative that caused damages to his person for alleged insults and verbal aggressions made while in the common areas of the office building. However, the individual involved that caused the alleged claims by Odoms is not an employee, agent or representative of the Company, the alleged actions were not within the scope of any duties for Athena and Athena had no control over his employment, actions, or behavior because there is no employment relationship. Accordingly, the Company’s current assessment is that Athena has no liability in this matter.
| 27 |
No actions have been served upon Athena pertaining to any lawsuit that may have been filed by Odoms. However, the statute of limitations for a tort action in the State of Florida is 2 years, if not properly tolled. Accordingly, absent tolling, the limitations period would expire no earlier than January 31, 2027.
On February 6, 2025, Diane Reynolds on behalf of herself and all others (“Reynolds”), an individual, filed a complaint that includes class action allegations, against Athena and another codefendant, filed in the Circuit Court for Montgomery County, Maryland. The complaint was served upon Athena on March 24, 2025. The complaint against Athena asserts claims under Maryland’s SAFE Act and Consumer Protection Act, as well as common-law claims for negligence and defective-design product liability. Similar to the S.M. and Yilma matters described above, although brought by different counsel, Reynolds alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what already Athena has in place. The claim by Reynolds against Athena is for an undetermined amount of compensation. The claim seeks an unspecified amount of damages, as well as injunctive relief. The case was removed to the United States District Court for the District of Maryland, where Athena filed a Motion to Dismiss on May 23 2025, which is currently pending a decision by the Court.
On February 26, 2025, the State of Iowa, through its Attorney General (“Iowa”), filed separate complaints against Athena’s competitors Lux Vending, LLC, Bitcoin Depot Operating, LLC (both “Bitcoin Depot”), and GPD Holdings LLC d/b/a CoinFlip (“CoinFlip”) (all collectively “Competitors”). Iowa alleges violations of the State’s Consumer Fraud Act by the Competitors. Also, Iowa further advises that they had subpoenaed fourteen (14) companies and that “[t]he investigation into crypto ATM companies is ongoing.”
In the complaints against Competitors, it is requested by Iowa for civil penalties of up to $40 per violation of the Consumer Fraud Act because of any misrepresentation, deception or unfair practices. Additionally, Iowa seeks reimbursement of the full transaction amounts to defrauded victims, and a penalty of $5,000 for each violation committed against an older individual. Although Athena believes that its operations can be clearly distinguished, Athena has received multiple requests for information from Iowa in matters substantially similar to those related to the complaints against Competitors.
Despite the pair of requests for information and production of documents, Athena has not been served with, nor is it aware of any, civil action filed against it by Iowa similar to those of the Competitors. Athena continues to cooperate with any information requests as appropriate.
On May 30, 2025, Rachael Gnadinger, Madeline McCausland, and Joanne Nebus-Horning, on behalf of themselves and others similarly situated (collectively, “Gnadinger”), filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Middlesex County. The complaint against Athena alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. Gnadinger alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what Athena already has in place. The claim by Gnadinger against Athena is for an undetermined amount of compensation. The claim seeks an unspecified amount of damages, as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. Athena removed the case to the US District Court for the District of New Jersey. However, Gnadinger moved to remand the case to state court in a September 15, 2025 filing. Therefore, at this time, the parties continue to await the Federal Court’s decision on whether to remand or not the case to the State Court. Once the decision is made, remanded or not, Athena then intends to move to compel two of the claimants to arbitrate in accordance to the Terms of Service in effect at the time of their transactions.
| 28 |
On September 8, 2025,
the District of Columbia (the “District”), through the Office of the Attorney General, filed a complaint against Athena
in the Superior Court of the District of Columbia Civil Division. Pursuant to the complaint, the District alleged that Athena failed to
disclose excessive fees and to protect consumers in violation of the District’s Consumer Protection Procedures Act (“CPPA”)
and Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act (the “Financial Exploitation Act”).
Specific causes of action include allegations of (1) deceptive trade practices in violation of the CCPA; (2) unfair trade practices in
violation of the CPPA; and (3) violations of the Financial Exploitation Act. The lawsuit seeks a declaratory judgment that Athena violated
the CPPA and Financial Exploitation Act; a permanent injunction enjoining Athena from violating the Financial Exploitation Act and CPPA,
and requiring Athena to (a) remove unconscionable contract terms, including its no-refunds policy, its cap on refunds, and its liability
limitation clauses; (b) fully disclose all transaction fees, including the actual percentage markup above the market rate, at the point
of sale before consumers insert cash; and (c) institute and implement adequate fraud prevention measures, including appropriate daily
and monthly transaction limits and effective fraud detection protocols; enjoin Athena from engaging in money transmission services in
the District of Columbia until Athena has required licenses; order Athena to pay damages and restitution for the full transaction amounts
that it allegedly collected in violation of the CPPA and Financial Exploitation Act; order Athena to pay damages and restitution, for
all undisclosed fees it collected within the District in violation of the CPPA and Financial Exploitation Act; award civil penalties of
$
On September 23, 2025,
AML Software, Inc. (“AML”) filed a complaint against Athena, Taproot, PSBC, and Jordan Mirch, an individual, in the United
States District Court for the Southern District of Florida (Case 1:25-cv-24378). The complaint alleges, among other things, that Athena
and the other defendants misappropriated AML’s proprietary Bitcoin kiosk software source code. The claims asserted include copyright
infringement (against all defendants), contributory and vicarious infringement (against Taproot, PSBC and Mr. Mirch), vicarious copyright
infringement (against Mr. Mirch), misappropriation of trade secrets under the Defend Trade Secrets Act (against all defendants), unfair
competition (against Athena, Taproot and PSBC), and conversion (against all defendants). AML seeks injunctive relief, return or destruction
of all versions of the software code, damages including actual, statutory, and exemplary damages, disgorgement of profits, attorneys’
fees, and costs. The complaint alleges that Athena knowingly obtained and used AML’s copyrighted source code through transactions
with other defendants and used it on approximately 2,800 Bitcoin kiosks. AML contends that Athena entered into agreements with related
entities and ultimately paid approximately $
At this stage, Athena is unable to predict the outcome of this litigation or reasonably estimate the potential loss or range of loss, if any. The Company intends to vigorously defend itself against these claims and allegations. As the case has just commenced, Athena has secured counsel in accordance to the indemnity provisions of the agreement between itself and codefendant PSBC.
On November 6, 2025, plaintiff Chris Vaughan filed a putative nationwide class action complaint against ABI in the United States District Court for the Southern District of Florida. The complaint names only ABI as defendant and asserts claims under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. §§ 501.201 et seq., and what plaintiff terms the “Florida Financial Exploitation of Vulnerable Adults Act,” Fla. Stat. § 825.103. Plaintiff alleges that ABI operates Bitcoin ATMs (“Kiosks”) nationwide and has imposed excessive and insufficiently disclosed fees through fee-inclusive exchange rates, misleading or incomplete disclosures, and unfair refund practices, including with respect to scam victims and vulnerable consumers. The putative class consists of all persons in the United States who, during the applicable statute of limitations, used an Athena kiosk to purchase cryptocurrency and were charged a “Kiosk Fee.” Plaintiff seeks injunctive relief, restitution, disgorgement, damages, civil penalties, and attorneys’ fees and costs. ABI has engaged counsel and filed an initial motion to dismiss the case. Although it was denied by the Court, it did require plaintiff to amend its complaint, which plaintiff filed on April 7, 2026. Still, at this early stage and with the filed amendment, ABI is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.
Despite the amended complaint, ABI believes it has strong defenses and intends to continue defending the matter vigorously.
| 29 |
On November 25, 2025,
Plaintiff Tammy L. Dulin (“Dulin”) filed a putative class action complaint against ABI in the U.S. District Court for the
Northern District of Ohio. The complaint alleges that Dulin, an Ohio resident over the age of sixty (60), was the victim of an impersonation
scam and, at the direction of the alleged scammer, conducted two cash-to-Bitcoin transactions totaling approximately $
ABI was served through its registered agent on December 4, 2025. ABI intended to file a motion to compel arbitration pursuant to the applicable Terms of Service; however, the matter was subsequently resolved pursuant to a confidential settlement agreement, and the parties have satisfied their respective obligations thereunder.
In April 2026, Athena Bitcoin, Inc. received correspondence from the California Department of Financial Protection and Innovation (“DFPI”) following the Company’s production of materials in response to administrative subpoenas issued in April and August 2025. In the correspondence, the DFPI stated that it had identified alleged violations of the California Digital Financial Assets Law and the California Consumer Financial Protection Law relating to certain of the Company’s digital financial asset kiosk operations in California, including alleged violations of daily transaction limits, customer charge limitations, pre-transaction disclosure requirements, and related BSA/AML compliance requirements. The DFPI stated that applicable law authorizes civil monetary penalties and restitution and requested that the Company meet to discuss its findings and a potential path toward resolution. The Company is evaluating the DFPI’s correspondence and intends to engage with the DFPI regarding the matter. The Company cannot predict the outcome of this matter or reasonably estimate the amount of any potential loss or range of loss at this time. If the DFPI were to impose penalties or other relief in a significant amount, the matter could have a material adverse effect on the Company’s business, financial condition, results of operations, and liquidity.
In addition to the above, from time to time, we are subject to allegations from various U.S. states that our activities constitute those of a money transmitter, and allegations that we failed to register as a money transmitter in those states. To date we have agreed to various consent orders and settlements with such states, none of which represent material amounts of penalties, assessments or fees, to settle such claims. The outcome of such ongoing and future allegations, complaints, claims and litigation cannot be predicted.
Occasionally we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters arising, for the most part, in the ordinary course of business. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings, to which we are a party, and we record a loss contingency when it is probable a liability has been incurred, and the amount of the loss can be reasonably estimated. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates.
Operating Leases
The Company has entered into certain leases primarily for ATM retail spaces and ATM machines. Operating lease expense is recognized in continuing operations by amortizing the amount recorded as an asset on a straight-line basis over the lease term. The operating lease expense is presented consistently with cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss). In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.
| 30 |
Balance sheet information, as of March 31, 2026, and December 31, 2025, related to operating right-of-use assets and lease liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Right-of-use assets – operating leases | $ | $ | ||||||
| Operating lease liabilities, current portion | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Other supplemental information related to operating leases was as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted-average discount rate | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
The discount rates used in measuring the lease liabilities was based on the Company’s incremental borrowing rate.
As of March 31, 2026, the Company’s operating
leases have remaining lease terms of up to
The operating lease cost is composed of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Operating lease cost | $ | $ | ||||||
| Short term lease cost | ||||||||
| Variable lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
| 31 |
The future lease payments of non-cancelable operating leases as of March 31, 2026 are as follows:
| Operating Leases |
||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: Imputed interest | ||||
| Present value of lease liabilities | $ | |||
NOTE 16. OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business,
the Company’s contract with the government of El Salvador for the operation of the Chivo branded ATMs obligates the Company to assume
the risk of loss for funds used in the operation of the Chivo branded ATMs while those funds are in transit. The Company has contracted
with licensed and insured cash logistics companies to securely transport these funds. The logistics companies’ insurance covers
in full the value of the funds in transit however, in the event of a loss or destruction of the funds in transit, the Company could encounter
a timing delay between insurance payment for lost funds and the date of actual loss. The amount of funds in transit varies based on multiple
factors including but not limited to economic activity, seasonality, holiday and bank closure calendars. The amount of funds in transit
as of March 31, 2026, and December 31, 2025, were $
NOTE 17. SUBSEQUENT EVENTS
The Company has evaluated subsequent events after the balance sheet date of March 31, 2026, through May 14, 2026, the date on which these condensed consolidated financial statements were available to be issued.
| 32 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General Information
The following discussion is based upon our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC. All references to years relate to the calendar year ended December 31st of the particular year.
This information should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on March 6, 2026.
Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited condensed consolidated financial statements included above under “Part I – Financial Information” – “Item 1. Financial Statements”. Please see the section entitled “Glossary of Bitcoin and Crypto Terms” above for a list of abbreviations and definitions commonly used in the crypto industry which are used throughout this Report.
Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information and have not commissioned any such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under, and incorporated by reference in, the section entitled “Item 1A. Risk Factors” of this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to the Company, are also based on our good faith estimates.
See also “Cautionary Note Regarding Forward-Looking Statements”, above, which includes information on forward-looking statements used herein and other matters which are applicable to this Report, including, but not limited to this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,”, “Athena Global” and “Athena Bitcoin Global” refer specifically to Athena Bitcoin Global and its consolidated subsidiaries, and references to “Athena” refer to Athena Bitcoin, Inc., a Delaware corporation and our wholly-owned subsidiary.
In addition, unless the context otherwise requires and for the purposes of this Report only:
| · | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
| · | “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and |
| · | “Securities Act” refers to the Securities Act of 1933, as amended. |
Additional Information
We file annual, quarterly, and current reports, and other information with the SEC, as a voluntary filer. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge, soon after such reports are filed with or furnished to the SEC, on the “Company”—“Investors”— “Financials”—“SEC Filings” page of our website at www.athenabitcoin.com. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is www.athenabitcoin.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.
Going Concern and Management Liquidity Plans
As of March 31, 2026, we had an accumulated deficit of $964 thousand and a working capital deficit of $6.513 million, and for the three months ended March 31, 2026, had a net loss of $467 thousand and cash provided by operating activities of $1.360 million. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company is self-funded and generates sufficient cash to fund its global operations through its operations.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Additionally, wherever possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock, preferred stock or warrants to purchase shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders to issue all or part of the authorized but unissued shares of common stock, preferred stock or warrants to purchase such shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.
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Organization of MD&A
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying audited financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
| · | Business Overview. A summary of the Company’s business. |
| · | Key Performance Indicators and Non-GAAP Financial Measure and Trends. A description of key performance indicators and non-GAAP financial measures and trends used by the Company to evaluate performance. |
| · | Significant Financial Statement Components. A summary of the Company’s significant financial statement components. |
| · | Results of Operations. An analysis of our financial results comparing the three-month periods ended March 31, 2026, and 2025. |
| · | Liquidity and Capital Resources. An analysis of changes in our condensed consolidated balance sheets and cash flows and discussion of our financial condition. |
| · | Critical Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. |
| · | Recently Issued Accounting Standards. A description of any recently issued accounting standards which are material to the Company. |
Business Overview
Our mission is to connect the world’s cash to the new global digital financial system. We believe that providing the world with access to crypto assets will help transform the international financial order by providing the unbanked and billions of others in the world with a connection to a new global digital financial system that is more accessible, efficient and transparent than the legacy financial system.
Athena Bitcoin ATMs and Athena Plus
In order to achieve our mission, we are focused on developing, owning, and operating a global network of Athena-branded Bitcoin ATM machines, which are free standing kiosks that permit customers to buy or sell crypto assets in exchange for cash (banknotes) issued by sovereign governments - often referred to as fiat currencies. We utilize purchasing algorithms and other proprietary systems to manage crypto assets to ensure that we are able to meet consumer demand for crypto assets.
We have become one of the largest Bitcoin ATM operators in the United States and Latin America by installing ATMs in strategic locations that seek to maximize the ability to provide crypto assets to customers. These locations include convenience stores, shopping centers, and other easily accessible locations in urban, suburban and rural locations. Our network presently includes Athena Bitcoin ATMs in 34 U.S. states, the U.S. territory of Puerto Rico and four countries in Latin America. See table below for our ATM breakdown by country and type, as of March 31, 2026.
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ATMs BY COUNTRY AND TYPE
| Country | Number of Athena Bitcoin ATMs (as of March 31, 2026) |
Type of Fiat Currency | |
| Total | Two-Way | ||
| United States | 2,703* | - | U.S. Dollar |
| El Salvador | 27 | 27 | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| Total | 2,753 | 50 | |
*Excludes Chivo-branded Bitcoin ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service. “Chivo” means, Sociedad Anonima de Capital Variable, a private company incorporated under the laws of the Republic of El Salvador, which is politically controlled by the Government of El Salvador (GOES), which is the official Bitcoin service provider of the Government of El Salvador.
Customers can purchase as little as $1 of Bitcoin but normally choose between $100 and $1,000 using Athena Bitcoin ATMs. The typical ATM that the Company operates is about 5-feet tall and features a large touchscreen for customer interaction. The customer typically needs to have a wallet application on their smart phone to buy or sell Bitcoin on our Bitcoin ATM. To initiate the transaction, the customer will follow the steps prompted on the screen. When a customer is buying Bitcoin, the machine will require the customer to insert paper Fiat Currency since our Bitcoin ATMs do not accept debit or credit cards. When the transaction is complete, a receipt will print showing exactly how many crypto assets have been bought and the receiving address. The Company’s Bitcoin ATMs do not contain the crypto asset’s private key. The Company sells Bitcoin from cloud-based wallets in each country, enabling real-time supply of crypto assets to its customers.
We offer Bitcoin for sale at all of our Bitcoin ATM machines. For the three months ended March 31, 2026 and 2025, we completed 35,351 and 62,326 transactions in Bitcoin through our Bitcoin ATMs, respectively.
The Company buys most of its crypto assets through automated purchases on crypto exchanges and with digital assets trading firms based on algorithms the Company has developed for balancing its holdings with anticipated demand. The Company is also active in the over-the-counter dealer market and has bilateral relationships with several large crypto asset trading desks. We replenish our supply of Bitcoin, multiple times daily as needed, and hold Bitcoin in our wallet to sell to users of our Bitcoin ATMs. On average, we sell our holdings of Bitcoin within 2 days of purchase. We only transact in Bitcoin at our machines. We strive to keep holding periods short to reduce the effect of changes in Bitcoin/U.S. Dollar exchange rates on our business and to maximize our working capital. We do not invest or have long term holdings of any crypto currency.
We charge a fee for Bitcoin transactions through our Athena Bitcoin ATM, equal to the prevailing price at U.S.-based exchanges plus a markup that typically ranges between 13% and 28%. The prices shown to customers on our Bitcoin ATM are inclusive of this price spread and are calculated by multiplying the prevailing price level of crypto asset by one plus the markup. The markup varies by location. It is determined by a proprietary method that is maintained as a trade secret. Our revenues associated with our ATM transactions are recognized at the time when the crypto asset is delivered to the customer’s wallet.
For the three months ended March 31, 2026, and 2025, the average markup on Bitcoin sold was 34% and 20%, respectively.
We offer bitcoin for sale at all of our Bitcoin ATM machines. We also buy bitcoin at some of our Bitcoin ATM machines (also known as two-way ATMs). The cash withdrawal limit from our two-way Bitcoin ATMs is $2,thousand per transaction (maximum of $1 thousand in California). We replenish or withdraw fiat currencies at our Bitcoin ATMs twice a week or depending on usage, using bonded security companies.
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The Company currently has an Anti-Money-Laundering (“AML”) / Bank Secrecy Act (“BSA”) policy and Procedures Manual to comply with FinCEN regulatory requirements regarding CIP and KYC. Athena employs a risk-based approach and a tiered system using a number of systems and AML analysts as well as various compliance triggers associated with its software. For transactions up to $2,000 per day, in the states and territories of the United States which do not currently restrict daily transaction limits (Tier 1) customers insert a phone number and Athena utilizes an onboarding tool which provides a name and address associated with the phone number provided. If a customer wishes to purchase greater than $2,000 a day (Tier 2), Athena requires a driver’s license ID scan which captures name, birthdate, physical address, and ID number. A customer cannot proceed at this level without complying with this step. If a customer wishes to use a passport, at this level, the customer can contact Athena to validate the passport. If a customer purchases $3,000, the customer will also be required to submit their social security number. Athena has other compliance triggers for similar information over the course of a customer’s spending as well as photos taken of the customer at each transaction. Athena has defined procedures for enhanced due diligence procedures based on a risk-based approach. These procedures utilize investigative software and customer question forms to obtain additional KYC and source of funds information. Athena also uses a sophisticated tool to ensure that when the Company transmits Bitcoin, it is not sent to a high risk or prohibited wallet. The tool will block any such transmissions. Finally, Athena utilizes a variety of anti-fraud measures including various warnings and a pledge of ownership that the customer owns and controls the submitted wallet.
Athena Plus (Over-The-Counter or OTC)
The Company also offers personalized services (“Athena Plus”) for the purpose of selling and buying crypto assets. Our Athena Plus service allows us to assist crypto asset buyers and sellers who wish to use their bank accounts. Through Athena Plus, we also generate revenue by selling Bitcoin directly to institutional traders, individuals and organizations. These transactions are typically completed telephonically for amounts that exceed $10,000 U.S. Dollars. The Company utilizes Bitcoin on hand and additional purchases, if necessary, to provide Bitcoin for the transaction. We charge a fee for Bitcoin transactions equal to the prevailing price at U.S.-based exchanges plus a markup.
White-label Service
The Company began working with the Government of El Salvador in June 2021 to support the implementation of its new Bitcoin Law which went into effect in September 2021 and made Bitcoin legal tender in El Salvador through January 29, 2025. To assist the Government of El Salvador with adoption of Bitcoin as legal tender, the Company provided the white-label service discussed below, as well as certain ancillary services. These ancillary services were provided to Chivo, a private company incorporated under the laws of the Republic of El Salvador, which is politically controlled by the Government of El Salvador. However, six articles of the Bitcoin Law were modified and three others were repealed as of January 29, 2025. Under the new rules, bitcoin is no longer considered “currency,” or “legal tender.” Another change makes using bitcoin entirely voluntary. Previously, the law mandated that businesses accept bitcoin for any goods or services they provided. Additionally, Bitcoin can no longer be used to pay taxes or settle government debts. These changes are not expected to harm our operations because our Bitcoin ATM services in El Salvador do not depend on compulsory Bitcoin usage; rather, they cater to organic consumer demand. We believe demand for Bitcoin transactions will continue to be driven by individuals who choose to use Bitcoin. Our role as an ATM operator for Chivo remains unchanged whereby we continue to manage the Bitcoin ATMs on the government’s behalf under our fixed-fee service arrangement.
The government is also stepping back from its involvement in Chivo Wallet, the state-backed digital wallet, by either transferring it to private sector management or terminating the program, as part of the country’s agreement with the International Monetary Fund. We believe this development may open opportunities for private companies (including the Company) to fill any service gaps left by the government’s reduced role. We have assessed the impact of the legislative changes and the Chivo transition, and do not foresee a negative impact on our business, in part because our existing ATM operations and customer base in El Salvador are expected to continue without disruption. There is no assurance that our assessment may not change depending on any future legal, political or economic changes in El Salvador.
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We operate Bitcoin ATMs on behalf of the Government of El Salvador. These Bitcoin ATMs are owned by the Company. This white-label service is comprised of installing the machines for the customer and ensuring that the machines are operating in a way that they can be used by the Government of El Salvador and their users. To achieve this, the Company is responsible for loading and unloading cash, setting up the network, performing repairs and maintenance and other responsibilities to ensure that the machines are operating as intended. We charge a fixed monthly fee to operate these ATMs, as well as an additional fixed price for specific services that are required. The additional fixed price for specific services required is less than 1% of total revenue earned for the fixed monthly fee. The fixed price covers Athena’s cost plus a reasonable profit margin. The Company charges a separate fixed fee for installation of the Bitcoin ATM as determined by the contract. The Company also charges a fixed fee each month for operating the Bitcoin ATM. The Company does not sell crypto assets directly to the users of the Bitcoin ATM.
When a user purchases Bitcoin from a Chivo-branded Bitcoin ATM, the ATM delivers the Bitcoin to the address selected by the user. This may be a Chivo wallet or any other wallet address, including a non-custodial wallet.
| · | Holder of Private Keys: If the user chooses to receive the Bitcoin in a Chivo wallet, then the Government of El Salvador (through the Chivo wallet system) retains custody of the private keys associated with that wallet. The Chivo wallet is a custodial wallet, meaning the end user does not have direct access to the private keys. In that scenario, the Government (or its designated Chivo wallet operator) has control over the crypto assets after delivery. |
However, users are not required to use a Chivo wallet. If the user inputs a non-custodial wallet address, the Bitcoin is delivered directly to that wallet, and the user retains sole control of the associated private keys. In all cases, regardless of the destination address, the Company never holds or has access to the private keys for Bitcoin purchased by users at the ATMs. Our role is strictly limited to operating the ATM infrastructure and facilitating the transaction; we do not have custody or manage digital assets on behalf of users.
| · | Method of Key Storage (Chivo Wallets): For transactions involving delivery to Chivo wallets, whereby the Company is not the custodian and does not have access to the Chivo wallet infrastructure, it is our understanding that the Government of El Salvador uses a combination of hot wallets (for real-time liquidity and immediate delivery) and potentially cold or multi-signature storage for operational security. Because transactions through Chivo ATMs require near-instantaneous delivery, the Chivo system maintains hot wallet liquidity to fulfill those transactions. The Company does not oversee or participate in the management of these storage practices. |
The Government of El Salvador has title to the private keys to the crypto assets. However, the Company acts as the custodian for the cash in the ATM machine as well as cash that is in-transit.
In 2021 and 2022, we installed a total of 200 Chivo Bitcoin ATMs in El Salvador, 10 Chivo Bitcoin ATMs at El Salvador consulates in the U.S. and 45 Chivo Bitcoin ATMs in other U.S. locations. The Company has not installed any new white-label ATMs in fiscal year 2025, or during 2026 to date. The Company provided no services related to the Chivo ecosystem in fiscal year 2025 or during 2026 to date.
Ancillary
The Company engages in services as part of its mission to bring the new digital financial system to the world. This includes the sale of point-of-sale terminals (“POS Terminals”) and developing and supporting crypto ecosystems.
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Key Performance Indicators and Non-GAAP Financial Measure and Trends
Athena Bitcoin ATMs
The number of Athena Bitcoin ATMs decreased from 3,111 to 2,753 or 12% from December 31, 2025 to March 31, 2026 due to removal of Bitcoin ATMs from locations that were not profitable and regulatory mandates requiring the removal of Bitcoin ATMs from Indiana in March 2026, In addition, removals of Bitcoin ATMs prior to January 1, 2026 that have caused the decrease in number of Bitcoin ATMs include the removals from Oklahoma in October 2025 and St. Paul, Minnesota in December 2025. The decreases will continue into subsequent periods as other areas such as Wisconsin in April 2026, Sterling Heights, Michigan in May 2026, and Tennessee in July 2026 also mandate the removal of Bitcoin ATMs.
Transactions
Median ATM transaction size for Bitcoin decreased from $125 to $120, or 4% and the number of transactions decreased from 62,326 to 35,351, or 43% during the three months ended March 31, 2025 and 2026, respectively due to regulatory mandates requiring a maximum transaction amount per customer per day.
Median OTC transaction size for all crypto assets decreased from $22 thousand to $9 thousand or 59% while the number of transactions increased from 41 to 83 or 202% during the three months ended March 31, 2025 and 2026, respectively due to recent Bitcoin price volatility which caused customers to not purchase large amounts of Bitcoins. OTC transactions are typically $10 or greater.
Adjusted EBITDA
We use Adjusted EBITDA as a non-GAAP financial measure. We define Adjusted EBITDA as net earnings attributable to Athena Bitcoin Global stockholders plus the following items: interest expense, fees on virtual vault services; income tax expense (benefit); and depreciation and amortization. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion. You should review the reconciliation of net income to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. The Company believes that Adjusted EBITDA is a more relevant supplemental measure of performance than other GAAP performance measures. Adjusted EBITDA is a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. Management presents the non-GAAP financial measure of Adjusted EBITDA because it considers this to be an important supplemental measure of performance. Management believes that this non-GAAP financial measure provides additional insight for analysts and investors evaluating the Company’s financial and operational performance by providing a consistent basis of comparison across periods.
ADJUSTED EBITDA
(in thousands)
Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||
| Net (loss) income | $ | (467 | ) | $ | 2,624 | |||
| Adjusted to exclude the following: | ||||||||
| Interest expense | 6 | 282 | ||||||
| Fees on virtual vault services | 330 | 454 | ||||||
| Income tax expense | 58 | 1,024 | ||||||
| Depreciation and amortization | 2,402 | 2,001 | ||||||
| Adjusted EBITDA | $ | 2,329 | $ | 6,385 | ||||
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Key Factors Affecting Our Performance
The performance of our business operations has been and will continue to be affected by a number of factors, including;
| · | The price and volatility of crypto assets | |
| · | Adoption of crypto assets as a medium of exchange by merchants and their trading partners | |
| · | Adoption of crypto assets as a store of value by investors | |
| · | That total number of Bitcoin ATMs could reach a saturation in the markets where the Company operates, and the demand, as measured on a per Bitcoin ATM basis, would decrease | |
| · | Investments made by the Company, including in new technologies and strategic acquisitions | |
| · | The ability to determine the transaction fee for Bitcoin ATM transactions | |
| · | The Company’s product and service offerings, including potentially increasing its white-label service offerings | |
| · | Regulations in U.S. and international markets | |
| · | Access to supply of new Bitcoin ATM machines from third-party manufacturers |
Components of Results of Operations
Consolidated Balance Sheets
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash maintained at various financial institutions, cash in transit, and cash in Bitcoin ATMs owned and leased by the Company.
The Company maintains cash balances at various financial institutions. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation (FDIC) up to $250 thousand per institution. The Company has deposits in excess of the FDIC-insured limit. The Company has not experienced any losses in such accounts and believes that it is not exposed to significant credit risk due to the financial position of the depository institutions, third-party crypto exchanges or investment vehicles in which those deposits are held. The Company has significant cash in Bitcoin ATMs, held on various third-party crypto exchanges and in transit with cash logistic providers. Cash in transit consists of cash that is picked up by armored truck companies from the Company’s Bitcoin ATMs but not yet deposited in the Company’s bank accounts. Management evaluates cash in transit based on outstanding cash deposits on cash picked up by the armored truck companies, historical cash deposits and cash that is lost during transit, which is immaterial. The armored truck companies maintain insurance over theft and losses.
Crypto assets held
The Company’s crypto assets are Bitcoin and Stablecoin and they are considered indefinite-lived intangible assets. Effective January 1, 2025, the Company measures crypto assets held at fair value. The Company determines the fair value of its Bitcoin and Stablecoin based on quoted (unadjusted) prices on CoinMarketCap.
The Company purchases Bitcoin, which is held in the Company’s hot wallets, on a just-in-time basis to facilitate sales to customers and mitigate exposure to volatility in Bitcoin prices. The Company only transacts in Bitcoin at its ATMs in exchange for cash, on a predetermined markup at the time of the transaction. However, there may be multiple days between the purchase of the Bitcoin and the sale of the Bitcoin. When Bitcoin is sold to customers, the Company recognizes the market value of the crypto asset within cost of revenue.
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Property and equipment
Property and equipment is mostly composed of ATM equipment which is depreciated over a three year period.
Consolidated Statements of Operations and Comprehensive Income (Loss)
Revenue
Athena Bitcoin ATM
We generate the majority of our revenue from the sale of bitcoin through our network of ATM machines. The Company generated 97% and 96% of its revenue from Bitcoin ATM sales for the three months ended March 31, 2026 and 2025, respectively. The Company recognizes revenue at the point in time when the customer receives the crypto asset. The revenue recognized is the gross transaction amount of crypto assets sold. Revenue is primarily correlated with transaction volume.
Athena Plus
We generate revenue from selling crypto assets to institutional traders and organizations. These are typically done via the phone. The Company generated 1% and 3% of its revenue from Athena Plus for the three months ended March 31, 2026 and 2025, respectively. The Company recognizes revenue at the point in time when the customers receive the crypto asset. The revenue recognized is the gross transaction amount of crypto assets sold. Revenue is primarily correlated with transaction volume.
White-label Service
We generate revenue by installing and operating Bitcoin ATMs on behalf of third parties. Operating responsibilities include providing the ATMs, loading and unloading cash, setting up the network, repairs and maintenance, and software upgrades, if necessary. The Company generated 2% and 1% of its revenue from white-label service for the three months ended March 31, 2026 and 2025, respectively. We charge a fixed monthly service fee to operate these machines. We also charge customers an additional fixed price for certain services, which is an insignificant part of the total revenue for white-label service (less than 1%). The Company does not sell crypto assets to these customers. The Company recognizes the monthly service fee over the term of the service contract.
The Company permits the customer to terminate the white-label service contract for specific ATMs as well as in total at any point during the contractual term for no penalty. As a result, the contracts for each ATM are considered month to month.
Ancillary
The Company is actively engaged in looking into other revenue streams that may aid our mission to connect the world with the new global digital financial system. We have engaged in projects such as developing software that may help customers manage their crypto assets as well as selling POS Terminals to customers.
Through March 31, 2026, the ancillary revenue stream has been sporadic and immaterial. The Company generated less than 1% of its revenue from these other revenue streams for the three months ended March 31, 2026 and 2025.
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Cost of Revenues
Cost of revenues consists primarily of expenses related to the acquisition of crypto assets (including the costs to purchase crypto assets from users in our ATMs and from third-party exchanges). The acquired crypto asset is recorded at cost of acquisition, i.e., it is inclusive of any surcharge or markdown. The Company commonly acquires crypto assets through third-party dealers and exchanges, as well as purchasing crypto assets from customers through our two-way ATMs. The Company assigns the costs of crypto assets sold in its revenue transactions on a first-in, first-out basis.
The crypto assets acquired are initially measured at cost and subsequently measured at fair value, with changes in fair value recorded in net income in each reporting period. The change in fair value is reflected in cost of revenues in the condensed consolidated statement of operations and comprehensive income. The Company, through its proprietary knowledge, rarely holds crypto assets for more than 2 days, reducing this risk.
Additionally, cost of revenues includes the cost of installing the Bitcoin ATMs, the costs of operating the Bitcoin ATMs from which crypto assets are sold (including the associated rent expense, related incentives, Bitcoin ATM cash losses, software licensing fees for the ATMs, depreciation, general liability insurance, and utilities), fees paid to service the Bitcoin ATM machines and transport cash to the banks, and outsourced customer support staff for white-label services.
Operating Expenses
The Company’s expenses consist of general and administrative, sales and marketing, technology and development and other operating expenses.
General and Administrative
General and administrative expenses consist primarily of staff salaries and other staff-related costs (for everyone at Athena except for the technology & development team and the marketing team), personnel in executive, commercial, finance, accounting, legal, and investor relations.
Other significant general and administrative costs include costs relating to facilities and overhead costs, legal fees relating to corporate matters, litigation, SEC filings, insurance, investor relations costs, fees for accounting and consulting services, and other general and administrative costs. General and administrative costs are expensed as incurred, and we accrue amounts for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from our service providers and adjusting our accruals as actual costs become known.
It is expected that the general and administrative expenses will increase over the next several years to support our expanding activities, potential commercialization of other product and service candidates and the increased costs of operating as a public company. These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and increased costs associated with being a public company, as well as expenses related to services associated with maintaining compliance with SEC requirements, insurance and investor relations costs.
Sales and Marketing
Sales and marketing consist principally of the marketing staff and marketing management salaries and other staff-related costs.
Other significant sales and marketing expenses include costs relating to the website and trade shows.
It is expected that the sales and marketing expenses will increase over the next several years to support our expanding activities, and potential commercialization of other products and services. These increases are expected to include increased costs related to the hiring of additional personnel and increased participation in trade shows.
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Technology and Development
Technology and development costs are expenses incurred to develop the Company’s other revenue streams, primarily software.
It is expected that the technology and development expenses will increase over the next several years to support our expanding activities and the commercialization of other products and services. These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure and the need for additional servers.
Other Operating Expenses
Other operating expenses consist of fees related to immigration of employees and other employee transition expenses.
Interest Expense
Interest expense consists of interest expense and includes amortization of debt discount and issuance costs.
Fees on Virtual Vault Services
Virtual Vault is a term used in the Armored Car and Cash Transport industry to define a service provided by armored car services for assets considered property of the bank when the bank does not have a physical vault or location in a given state or location. The fees for virtual vault services included in the accompanying condensed consolidated statement of operations and comprehensive income are for a currency availability service provided to the Company by its bank for making funds held in a virtual vault immediately available to the Company. Neither the term nor the service is related to virtual currency or crypto assets.
Other (Income) Expense
This includes foreign currency transaction gain/loss and penalties as applicable.
Income Tax Expense
Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which are recorded on the condensed consolidated balance sheets in accordance with Financial Accounting Standards Board (FASB) ASC 740, Income Taxes (“ASC 740”), which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the condensed consolidated statements of operations and comprehensive income (loss).
The Company accrues liabilities for uncertain tax positions that are not, more likely than not, to be sustained upon examination as of March 31, 2026 and December 31, 2025. Interest and penalties related to uncertain tax positions are recorded in accrued tax liabilities in the accompanying condensed consolidated balance sheets. The Company had no unrecognized tax benefits as of March 31, 2026 and December 31, 2025, that if recognized, would affect its annual effective tax rate.
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Results of Operations
The majority of the numbers presented below are rounded numbers and should be considered as approximate.
Comparison of the Three Months Ended March 31, 2026 and 2025
The table below sets forth, for the periods presented, certain historical financial information.
| For the three months ended | ||||||||||||||||
March 31, 2026 | March 31, 2025 | $ Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | 37,183 | $ | 72,629 | $ | (35,446 | ) | (49% | ) | |||||||
| Cost of revenues | 35,006 | 64,498 | (29,492 | ) | (46% | ) | ||||||||||
| Gross profit | 2,177 | 8,131 | (5,954 | ) | (73% | ) | ||||||||||
| Operating expenses: | ||||||||||||||||
| Technology and development | 455 | 458 | (3 | ) | (1% | ) | ||||||||||
| General and administrative | 1,802 | 3,054 | (1,252 | ) | (41% | ) | ||||||||||
| Sales and marketing | 88 | 491 | (403 | ) | (82% | ) | ||||||||||
| Other operating expense | 112 | (282 | ) | 394 | 140% | |||||||||||
| Total operating expenses | 2,457 | 3,721 | (1,264 | ) | (34% | ) | ||||||||||
| (Loss) income from operations | (280 | ) | 4,410 | (4,690 | ) | (106% | ) | |||||||||
| Interest expense | 6 | 282 | (276 | ) | (98% | ) | ||||||||||
| Fees on virtual vault services | 330 | 454 | (124 | ) | (27% | ) | ||||||||||
| Other expense | (207 | ) | 26 | (233 | ) | (896% | ) | |||||||||
| (Loss) income before income taxes | (409 | ) | 3,648 | (4,057 | ) | (111% | ) | |||||||||
| Income tax expense | (58 | ) | (1,024 | ) | 966 | 94% | ||||||||||
| Net (loss) income | $ | (467 | ) | $ | 2,624 | $ | (3,091 | ) | (118% | ) | ||||||
Revenues (in thousands)
We recognized revenues of $37.183 million during the three months ended March 31, 2026, as compared to revenues of $72.629 million for the three months ended March 31, 2025, representing a decrease in revenues of $35.446 million or 49%. The decline in revenue is primarily due to increased regulation regarding a maximum fee that can be charged for a crypto transaction and a limit on the total that can be purchased per day, along with reductions in the number of ATMs that have been deployed and an overall decrease in the size of individual transactions and transaction volume, driven by economic factors and market volatility. The regulations related to the maximum fee that can be charged per transaction and the limitation on transaction volume per customer per day is expected to remain enforced and replicated by other States; therefore, this trend of decreasing revenues is expected to continue.
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Cost of revenues
We incurred cost of revenues of $35.006 million for the three months ended March 31, 2026, compared to cost of revenues of $64.498 million for the three months ended March 31, 2025, representing a decrease in cost of revenues of $29.492 million or 46%. The decreases in cost of revenues are attributable to a decrease in the corresponding sales of Bitcoin as described above and a decrease in the volume of Bitcoin acquired.
Gross profit
We realized gross profit of $2.177 million during the three months ended March 31, 2026, as compared to gross profit of $8.131 million for the three months ended March 31, 2025, representing a decrease in gross profit of $5.954 million or 73%. As discussed above, the decrease in gross profit was attributable to lower revenues driven by regulations, reduced transaction volumes and reductions in the number of ATMs that have been deployed.
Technology and development
We incurred technology and development expenses of $455 thousand for the three months ended March 31, 2026, compared to expenses of $458 thousand for the three months ended March 31, 2025, representing a decrease in technology and development expenses of $3 thousand or 1%.
General and Administrative
We incurred general and administrative expenses of $1.802 million for the three months ended March 31, 2026, compared to expense of $3.054 million for the three months ended March 31, 2025, representing a decrease in general and administrative expenses of $1.252 million or 41%. The decrease resulted from a decrease in salaries and related reduction of bonus accruals as well as a decreased legal fees related to corporate matters and SEC filings, including prior period resale registration statements on Form S-1 and other public company reporting requirements. The Company will continue to monitor and control expenses in anticipation of decreasing revenues.
Sales and Marketing
We incurred sales and marketing expenses of $88 thousand during the three months ended March 31, 2026, as compared to sales and marketing expenses of $491 thousand for the three months ended March 31, 2025, representing a decrease in sales and marketing expenses of $403 thousand or 82%. The decrease was primarily attributable to the conclusion of referral payments under a prior referral arrangement in 2025.
Interest Expense
We incurred interest expense of $6 thousand during the three months ended March 31, 2026, as compared to interest expense of $282 thousand for the three months ended March 31, 2025, representing a decrease in interest expense of $276 thousand or 98%. The decrease was primarily attributable to the repayment in November 2025 of the Senior Secured Loan Agreement, as amended, and the Senior Secured Revolving Credit Promissory Note with KGPLA Holdings LLC (“KGPLA”), an entity in which Mike Komaransky, a former director and principal shareholder of the Company, has a controlling interest and whose Chief Investment Officer, Huaxing “Jason” Lu, served as a director of the Company.
Net (Loss) Income
We had a net loss of $467 thousand for the three months ended March 31, 2026, compared to a net income of $2.624 million for the three months ended March 31, 2025, representing a decrease in net income of $3.091 million or 118%. The decrease in net income is the result of the factors described in the sections discussed above and mostly attributable to the 49% decrease in revenues.
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Liquidity and Capital Resources
As of March 31, 2026 and December 31, 2025, we had cash balances of $14.781 million and $11.379 million respectively. The Company also had working capital deficits of $6.513 million and $9.235 million, respectively, largely due to operating lease liabilities, current portion of $7.912 million and $8.751 million as of March 31, 2026 and December 31, 2025, respectively.
Our Bitcoin ATM business has two significant components of working capital – holdings of crypto assets and cash holdings in the machines and in transit, i.e., once it has been removed from the machines and it is the process of being counted and credited to our account with the appropriate banking institution. We must buy our holdings in cash and do not get a credit from our counterparties. On average, we hold 2 days of anticipated sales of Bitcoin at our Bitcoin ATM machines. We strive to keep this period short to reduce the effect of changes in Bitcoin /U.S. Dollar exchange rates on our business and to minimize our working capital. Our cash logistics contractors restock or remove cash from our machines periodically, the frequency of this service determined by a host of operational considerations like historical trend of sales, current levels of cash in the machines, route considerations, public holidays, and incremental cost of each removal etc. We employ a data driven strategy based on factors we have learned over the years to reduce the amount of cash deployed. It currently takes anywhere from 3 to 7 days from the time the cash is picked up from the Bitcoin ATM machines to be credited to our account. An increase in the amount of days when the cash is credited to our account, would impact our ability to restock our holdings of Bitcoin in a timely manner which could create a situation where there are insufficient amounts of Bitcoin to fulfill customer orders.
The Company, given how actively we manage our cash logistics, and how we prioritize and leverage cash pick up based on proprietary operating algorithms and practices, is able to finance and perform its daily operating activities and manage liquidity, while also maintaining the noted levels of cash in the Bitcoin ATM machines. For the three months ended March 31, 2026, the average cash balance was $1.8 thousand per machine in the United States. For the three months ended March 31, 2025, the average cash balance was $3.2 thousand per machine in the United States. For newly installed Bitcoin ATMs, it may take weeks before the Bitcoin ATMs reach normal operating activity, resulting in a reduction of cash in these machines compared to normal operating Bitcoin ATMs. The Company generally has minimum cash of $2.5 thousand in each dispenser in two-way Bitcoin ATM machines in order to have sufficient cash to operate them. The remaining cash is withdrawn from the machine in order to fund the Company’s operations.
Our Athena Plus (phone sales) has a lower level of capital required since we only function on days other market participants and banks and our trades are cash settled every day. The Company does not separately hold Bitcoin earmarked for Bitcoin ATM sales as opposed to phone sales and the Company holds approximately 2 days’ worth of bitcoin needed for transactions at its Bitcoin ATMs. We strive to minimize the amount of working capital deployed for better financial results.
Our financing needs are influenced by our level of business operations and generally increase with higher levels of revenue. We strive to minimize the amount of financing requested to assist with operating the business.
Our material cash requirements and time periods of such requirements from known contractual and other obligations amount to, in the aggregate, approximately $25.652 million for 2026 and $17.630 million for the years 2027 through 2030 which we expect will be met through our ongoing operations. However, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for redeploying ATM equipment and pursuing other initiatives.
Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
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Cash Flows
Three months ended March 31, 2026, compared to the three months ended March 31, 2025
The following summarizes our cash flow for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended March 31, | ||||||||||||||||
| 2026 | 2025 | $ Change | % Change | |||||||||||||
| Net cash provided by operating activities | $ | 1,360 | $ | 4,198 | $ | (2,838 | ) | (67.6% | ) | |||||||
| Net cash used in investing activities | (18 | ) | (552 | ) | 534 | (96.7% | ) | |||||||||
| Net cash used in financing activities | (1,664 | ) | (1,539 | ) | (125 | ) | 8.1% | |||||||||
| Effect of exchange rate changes | (13 | ) | 4 | (17 | ) | (425.0% | ) | |||||||||
| Net decrease in cash and cash equivalents | (335 | ) | 2,111 | (2,446 | ) | (115.9% | ) | |||||||||
| Cash and cash equivalents and restricted cash, beginning of period | 15,166 | 17,628 | (2,462 | ) | (14.0% | ) | ||||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 14,831 | $ | 19,739 | $ | (4,908 | ) | (24.9% | ) | |||||||
Our operating activities provided $1.360 million in cash for the three months ended March 31, 2026 compared to $4.198 million for the three months ended March 31, 2025, representing a decrease in cash provided by operating activities of $2.838 million. The sources of cash from operating activities for the three months ended March 31, 2026, are comprised primarily of depreciation and amortization of $2.402 million and decreases in accounts receivable of $3.886 million, offset by decreases of $3.736 million of liability for cash held for customers and $1.507 million of accounts payable and other liabilities.
The sources of cash from operating activities for the three months ended March 31, 2025, are comprised primarily of net income of $2.624 million and depreciation and amortization of $2.001 million, prepaid expenses and other assets of $1.430 million, and liability for cash held for customers $1.348 million offset by decreases of $1.571 million of crypto assets held.
Our investing activities used $18 thousand and $552 thousand in cash for the three months ended March 31, 2026, and 2025, for purchases of property and equipment of $48 thousand and $552 thousand, respectively.
Our financing activities used $1.664 million and $1.539 million in cash for the three months ended March 31, 2026, and 2025, respectively, primarily due to repayment of equipment notes payable of $1.500 million and $1.445 million, respectively.
Recent Financing Transactions
Equipment notes payable
On September 19, 2024, the Company and Taproot Acquisition Enterprises, LLC, a Delaware limited liability company (“Taproot”), entered into that certain Omnibus Equipment Refinancing Agreement providing for the refinance of the Company’s debt obligations previously incurred in connection with the purchase of Bitcoin ATMs pursuant to the previously entered into equipment financing agreements for the purchase of the Equipment by the Company from Taproot. The parties agreed that the total outstanding balance of $2.120 million would be paid by one inception payment of $1.158 million upon the execution of the Omnibus Equipment Refinancing Agreement and followed by weekly payments of $20 thousand for a period of 48 weeks. The Omnibus Equipment Refinancing Agreement also contains the representations and warranties of both parties with respect to clear and marketable title of the Equipment and provides provisions addressing an event of default by the Company as a purchaser of the Equipment. As of March 31, 2026, and December 31, 2025, the outstanding principal was $0 as this Omnibus Equipment Refinancing Agreement was terminated and replaced with a Release and Termination Agreement which is included in Short-term debt discussed below (please refer to Short-term debt below for details).
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On October 30, 2024, Athena Bitcoin entered into an Equipment Financing Agreement with Taproot (the “Financing Agreement”) to purchase certain Bitcoin ATMs listed in the Financing Agreement. The Financing Agreement amends and supersedes previous equipment purchase agreements between the parties. Under the Financing Agreement, Athena Bitcoin will acquire from Taproot installed Bitcoin ATMs or additional Bitcoin ATMs at the price per Bitcoin ATM set forth in the Equipment Agreement. The down payment was to be paid in 4 installments with the first payment due and paid by Athena Bitcoin as of October 31, 2024, and the last payment was due by January 31, 2025; which last payment was made on January 27, 2025.
In addition, Athena Bitcoin agreed to pay a fee equal to 0.8% of the revenue (to be paid weekly) derived from the sale of Bitcoin in each Bitcoin ATM location until the expiration of the term of the Financing Agreement (36 months) or until full payment of total purchase price for the equipment subject to certain additional limitations. The Financing Agreement also provides the provisions addressing the event of default by either Taproot or Athena Bitcoin, and respective available remedies. Certain property on which the equipment units are located is subject to merchant agreements (as listed in the Financing Agreement), and the Financing Agreement provides for assignment and assumption of merchant agreements and leases, as may be applicable. Furthermore, Taproot is to maintain a first priority interest on the Bitcoin ATMs until fully paid for. In connection therewith, Athena Bitcoin, Taproot and KGPLA Holdings LLC, an entity in which Mike Komaransky, a former director and principal shareholder of Athena Bitcoin has a controlling interest and whose Chief Investment Officer is Huaxing “Jason” Lu, our director, entered into a First Amendment to the Intercreditor Agreement dated as of October 23, 2024, pursuant to which KGPLA agreed to the subordination of its first priority security position on collateral of Athena Bitcoin to Taproot. As of March 31, 2026, and December 31, 2025, the outstanding principal was $0 due to Athena Bitcoin entering into a Release and Termination Agreement with Taproot and the Taproot Parties to terminate and settle all outstanding obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement on September 4, 2025 (please refer to the detailed discussion of Short-term debt below).
Short-term debt
On February 26, 2024, the Company entered into a financing agreement for $170 thousand with National Partners PFco LLC to pay the insurance premium on its directors’ and officers’ insurance with an annual percentage rate of 8.45% per annum repayable in ten monthly installments beginning March 14, 2024. On October 11, 2024, the Company increased its coverage for the same policy and entered into an additional financing agreement for $170 thousand with an annual percentage rate of 7.95%, repayable in ten monthly installments beginning November 11, 2024. As of March 31, 2026, and December 31, 2025, the outstanding principal was $0.
On December 19, 2024, the Company entered into financing agreements for $116 thousand with National Partners PFco LLC., to pay the insurance premium on its commercial liability insurance with an annual interest rate of 7.95% per annum, repayable in eight monthly installments beginning January 11, 2025. As of March 31, 2026, and December 31, 2025, the outstanding principal was $0.
On May 30, 2025, the Company entered into financing agreements for $280 thousand with E.T.I. Financial Corporation, to pay the insurance premium on its cyber, crime and employment practices liability insurance with an annual interest rate of 9.51% per annum, repayable in ten monthly installments beginning June 14, 2025. As of March 31, 2026, and December 31, 2025, the outstanding principal was $0 and $88 thousand, respectively.
On September 4, 2025, the Company entered into a Release and Termination Agreement with Taproot and the Taproot Parties to terminate and settle all outstanding obligations under several prior arrangements, including the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. Under the terms of the Release and Termination Agreement, the Company agreed to pay the Taproot Parties an aggregate Termination Payment of $9 million, consisting of an upfront payment of $3 million upon execution of the agreement and weekly installments of $115 thousand over 52 weeks. Upon payment in full, all security interests, liens, and other encumbrances under the prior agreements will be released, and all outstanding obligations between the parties will be deemed satisfied and discharged.
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At the date of settlement, the carrying amount of the debt obligation under the Equipment Financing Agreement was $4.3 million. The Company also recorded the following items associated with the extinguishment of debt:
| a) | $3.2 million, related to the Equipment Financing Agreement and 2024 Financing Royalty Buy-Out, representing the lump-sum buy-out of a 0.5% vendor participation obligation. | |
| b) | $300 thousand, related to the Location Referral Agreement and Location Agreement Buy-Out, representing the lump-sum buy-out of a referral revenue share obligation. | |
| c) | $1.1 million, recorded as a settlement premium, representing the excess of the total settlement consideration over the carrying amount of the extinguished obligations. | |
| d) | $5.283 million, the Company recorded a loss due to the extinguishment of debt of $5.283 million related to the termination and settlement of all outstanding obligations under the Equipment Financing Agreements, the Omnibus Equipment Refinancing Agreement, the Location Referral Agreement, the Client Services Agreement, and the Development Services Agreement. The loss included the extinguishment of the debt of $4.602 million and $681 thousand of unamortized imputed interest. |
As of March 31, 2026, and December 31, 2025, the outstanding principal of the Release and Termination Agreement was $2.538 million and $4.038 million, respectively, which was included in short-term debt in the condensed consolidated balance sheets.
On October 9, 2025, the Company entered into insurance premium financing agreements for $223 thousand (gross premium in the amount of $284 thousand less $61 thousand deposit) with E.T.I. Financial Corporation, to pay the insurance premium on its directors’ and officers’ insurance with an annual interest rate of 9.5% per annum, repayable in ten monthly installments beginning November 11, 2025. As of March 31, 2026, and December 31, 2025, the outstanding principal was $114 thousand and $180 thousand, respectively
On December 30, 2025, the Company entered into insurance premium financing agreements for $59 thousand (gross premium in the amount of $74 thousand less $15 thousand deposit) with E.T.I. Financial Corporation, to pay the insurance premium on its commercial general liability insurance with an annual interest rate of 12.06% per annum, repayable in ten monthly installments beginning February 1, 2026. As of March 31, 2026, and December 31, 2025, the outstanding principal was $49 thousand and $59 thousand, respectively.
Convertible debt, related-party
On January 31, 2020, the Company entered into a Secured Convertible Debenture agreement with KGPLA. The Secured Convertible Debenture provided for a principal amount of $3 million, with a maturity date of January 31, 2025, which was extended to January 31, 2026. Interest as defined by the agreement is 8% per annum. The Secured Convertible Debenture is convertible into shares of the Company’s common stock at a conversion price equal to $0.012 per share or, if lower, a price determined by specified formulas depending on the type of conversion event: (a) upon the next sale (or series of related sales) by the Company of additional equity securities under an exemption from registration available under the rules promulgated under the Securities Act, from which the Company receives gross proceeds of not less than $3 million; provided that, for clarification, this is not meant to include any actions or listing for trading on the OTC Markets, the conversion price will be the lesser of (i) the lowest per share purchase price of the equity securities issued in such financing, reduced by a 20% discount, or (ii) the price per share equal to a valuation cap of $70.282 million, divided by the Company’s fully diluted capitalization immediately prior to the financing; (b) in the event of our first underwritten public offering of common stock under the Securities Act whereby the our common stock is listed or admitted for trading on a national stock exchange in the United States, as reported on the principal national security exchange or quotation system on which such security is quoted or listed, the conversion price will be the lesser of (i) the lowest per share purchase price of equity securities issued in the IPO, reduced by a 20% discount, or (ii) 90% of the quotient obtained by dividing the Valuation Cap by the fully diluted capitalization immediately prior to the IPO; (c) in connection with a corporate transaction, including certain mergers, consolidations, changes of control or sales of substantially all assets, the conversion price will equal the Valuation Cap divided by the fully diluted capitalization immediately prior to such transaction; and (d) for conversions occurring at or after maturity or at the option of the investor at any time, the conversion price will also equal the valuation cap divided by the fully diluted capitalization immediately prior to such conversion.
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Conversions may be made at any time at the option of KGPLA and are generally mandatory upon the closing of a Next Equity Financing or IPO, with principal and accrued but unpaid interest converted into shares of common stock at the applicable conversion price and issued on the same terms as the securities sold in the transaction. In the event of a corporate transaction prior to repayment or other conversion, each holder may elect to receive either (i) repayment equal to all accrued and unpaid interest plus two times the outstanding principal balance, or (ii) shares of common stock issuable upon conversion of the Secured Convertible Debentures based on the applicable conversion price. After the maturity date, or at any time prior to maturity at the option of the investor, a debenture may be converted into shares of common stock at the conversion price then in effect. Interest accrued through the conversion date must be paid in cash, and fractional shares will not be issued but instead rounded down to the nearest whole share.
The Company is required to reserve sufficient authorized shares of common stock to permit conversion of the debentures. If authorized shares are insufficient, the Company’s board must promptly call a stockholders’ meeting or seek written consent to approve an increase in authorized common stock. Prepayment of the debentures is prohibited without the prior written consent of KGPLA.
The Secured Convertible Debenture was amended and restated as of May 15, 2023, and became a secured, and not general unsecured, obligation of the Company, on par with the notes issued pursuant to the Senior Secured Loan Agreement entered into as of the same date.
The loan agreement imposed a number of restrictive covenants on the Company and its subsidiaries for so long as any obligations remain outstanding. Without the KGPLA’s consent, the Company may not incur additional debt other than debt under the loan documents, certain existing debt (including the Secured Convertible Debenture and debt owed to Banco Hipotecario), certain debt owed to Taproot or unsecured debt incurred after the closing. The Company is also restricted from granting liens on its assets, except for liens under the loan documents, liens in favor of Banco Hipotecario existing on the closing date, or certain permitted tax liens. The Company and its subsidiaries may not merge, consolidate, liquidate, or dissolve except in limited circumstances, and may not engage in businesses other than those conducted on the effective date or reasonably related thereto. The Company is prohibited from disposing of collateral, making voluntary prepayments or amendments with respect to subordinated debt (other than repayment of the specified Secured Convertible Debenture), or declaring or paying dividends or other cash distributions on its equity. In addition, the Company may not amend or modify material contracts in a manner adverse to KGPLA without KGPLA’s consent. Material contracts are generally those with consideration of $50 thousand or more, or otherwise material to the Company’s business, operations, financial condition, or prospects.
The Company is required to make mandatory prepayments of the Secured Convertible Debenture in the event (a) we or any subsidiary incurs debt not otherwise permitted under the agreement (in an amount equal to 100% of the net cash proceeds of the debt incurred); (b) in the event we receive any cash not in the ordinary course of business (in an amount equal to 100% of such cash received); and (c) in the event KGPLA does not consent, we must use 100% of the net cash proceeds we receive from a change of control, any asset sale, or the sale of material assets of the Company to repay the Secured Convertible Debentures.
On November 24, 2025, the Company voluntarily repaid in full the outstanding balance of approximately $3 million plus accrued interest of $36 thousand owed to KGPLA for a total payment of $3.036 million, under that certain Amended and Restated Secured Convertible Debenture entered into with KGPLA on May 15, 2023, as amended from time to time (the “Convertible Debenture”). In connection with the repayment of all amounts owed pursuant to the Convertible Debenture, the obligations and commitments owed by the Company to KGPLA under the (a) Convertible Debenture, (b) a Senior Secured Loan Agreement entered into between KGPLA (and certain other borrowers named therein) and the Company dated May 15, 2023, and (c) a Security Agreement dated May 15, 2023, between KGPLA and the Company, each as amended from time to time, were terminated and all collateral associated therewith is required to be released by KGPLA. The voluntary prepayment was made using cash on hand and the Company did not incur any prepayment penalties in connection with the repayment.
Separate from the repaid Loan Agreement and the Revolving Credit Note with KGPLA, a Secured Convertible Debenture with KGPLA dated January 31, 2020 (as amended and restated May 15, 2023) remained outstanding at December 31, 2024 and was voluntarily repaid in full on November 24, 2025, as noted above.
As of March 31, 2026, and December 31, 2025, the outstanding principal debenture amount is $0.
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Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. We continually evaluate the accounting policies and estimates used to prepare the unaudited condensed consolidated financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position. Our critical accounting estimates are more fully discussed in Note 1 to our unaudited condensed consolidated financial statements contained herein.
Revenue Recognition
The Company derives its recurring revenues primarily from three sources: (i) sale of crypto assets at Bitcoin ATMs (both Athena ATMs and White-label ATMs such as those in El Salvador), (ii) customized investor trading services for the sale or purchase of crypto assets through the Company’s Athena Plus desk (referred to as “over-the-counter” or “OTC”), and (iii) Athena Pay which is a payment processor application (“app”); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin. The Company also generates revenue from ancillary items, such as sale of intellectual property and maintenance of software.
Under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customer, (“FASB ASC 606”) the Company recognizes revenue at the point of sale or over time of the service period for these products or services to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services. Pursuant to FASB ASC 606, the Company recognizes revenue by applying the following steps:
| · | Identification of the contract, or contracts, with a customer. | |
| · | Identification of the performance obligations in the contract. | |
| · | Determination of the transaction price. | |
| · | Allocation of the transaction price to the performance obligations in the contract. | |
| · | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
The Company recognizes revenue when the performance obligations identified under the terms of contracts with its customers are satisfied.
Judgment is required in determining whether we are the principal or the agent in transactions between customers. We evaluate the presentation of revenue on a gross or net basis based primarily on inventory risk (are we at risk for potential fluctuations of the crypto asset price) and whether we control the crypto asset provided before it is transferred to the customer or whether we act as an agent by arranging for others to provide the crypto asset to the customer. The Company determined it acts as the principal in each of its revenue streams. The Company enters into contracts that may include multiple performance obligations. The Company identifies the promises in the contract and assigns them to their appropriate performance obligation. These performance obligations may be part of a different revenue source and are listed separately below.
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Athena ATM & White-label Service
Athena Bitcoin ATM
The Company requires all users of Athena Bitcoin ATMs to agree to the Bitcoin ATM Terms of Service which stipulate the terms and conditions of the transaction. The user, by inserting sovereign currency (known as fiat) and confirming that they agree to the transaction, is agreeing to the contract that governs the transaction.
The Company currently has an Anti-Money-Laundering (“AML”) / Bank Secrecy Act (“BSA”) policy and Procedures Manual to comply with FinCEN regulatory requirements regarding CIP and KYC. Athena employs a risk-based approach and a tiered system using a number of systems and AML analysts as well as various compliance triggers associated with its software. For transactions up to $2,000 per day, in the states and territories of the United States which do not currently restrict daily transaction limits (Tier 1) customers insert a phone number and Athena utilizes an onboarding tool which provides a name and address associated with the phone number provided. If a customer wishes to purchase greater than $2 thousand a day (Tier 2), Athena requires a driver’s license ID scan which captures name, birthdate, physical address, and ID number. A customer cannot proceed at this level without complying with this step. If a customer wishes to use a passport, at this level, the customer can contact Athena to validate the passport. If a customer purchases $3 thousand, the customer will also be required to submit their social security number. Athena has other compliance triggers for similar information over the course of a customer’s spending as well as photos taken of the customer at each transaction. Athena has defined procedures for enhanced due diligence procedures based on a risk-based approach. These procedures utilize investigative software and customer question forms to obtain additional KYC and source of funds information. Athena also uses a sophisticated tool to ensure that when the Company transmits Bitcoin, it is not sent to a high risk or prohibited wallet. The tool will block any such transmissions. Finally, Athena utilizes a variety of anti-fraud measures including various warnings and a pledge of ownership that the customer owns and controls the submitted wallet.
The Company has a single performance obligation to provide a specific quantity of Bitcoin to the customer’s crypto wallet in exchange for fiat. The Company utilizes a mark-up for crypto assets sold to the customer. Athena ATMs permit customers to purchase as little as one US dollar of Bitcoin, and it records the gross cash received from the customer as the transaction price.
Revenue is recognized at the point in time when the Bitcoin is delivered to the customer’s crypto wallet. Delivery to the customer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.
White-label Service
In this revenue stream, “client” refers to the entity contracting with the Company while “customer” refers to the person using the White-label Bitcoin ATM. The Company entered into multiple contracts that govern the white-label service for Bitcoin ATMs located in El Salvador and in the United States. The contracts permit the clients to terminate the contract at any point or to adjust the number of Bitcoin ATMs that are in use without a substantive penalty.
The Company operates White-label Bitcoin ATMs on behalf of the clients and the installation of the Bitcoin ATMs is performed by a third-party which is chosen by the White-label Bitcoin ATM client.
The operations, on behalf of the White-label client, include cash logistics services, and testing the Bitcoin ATMs. The Company charges a fixed fee each month for operating the Bitcoin ATMs.
The Company leases Company-owned Bitcoin ATMs to its clients. The Company elected the expedient in FASB ASC 842, Leases (“ASC 842”), which permits combining the lease and non-lease components together if the lease component has the same timing and pattern of transfer as the non-lease component and the lease component is an operating lease. Both of these conditions are met (for a more detailed discussion see Leases within NOTE 1 of the unaudited condensed consolidated financial statements included herein).
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The Company is considered the principal, as it controls any third-party good or service before it is transferred to the client.
For operating the White-label ATM, revenue is recognized straight line over the requisite service period.
Athena Plus (Over-The-Counter or OTC)
The Company requires all users of Athena Plus (a.k.a. “Over-The-Counter” or “OTC”) to agree to the Athena Plus Terms of Service. The Athena Plus Terms of Service stipulate the terms and conditions of the transaction. The user, by wiring fiat to the Company’s bank account, is agreeing to the contract that governs the transaction.
The Company provides a specific quantity of Bitcoin to the customer’s crypto wallet. The Company utilizes a mark-up for crypto assets sold to the customer. The minimum transaction is $10 thousand (or equivalent value of local currency). The Company records the gross cash received from the customer as the transaction price for the transaction.
Revenue is recognized at the point in time when the Bitcoin is delivered to the customer’s crypto wallet. Delivery to the customer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the Bitcoin is purchased.
Athena Pay
The Company requires all retailers who are using Athena Pay to execute the Athena Pay contract which stipulates the terms and conditions of the transactions. As a payment processor, the Company recognizes a processing fee of approximately 2.5% (average) of the transaction amount, when the transaction occurs (i.e., when the retailer generates the QR code with the specific amount to be charged to the customers in Bitcoin and the transaction is completed).
Revenue is recognized at the point in time when the Bitcoin is delivered to the retailer’s crypto wallet. Delivery to the retailer’s crypto wallet is governed by the Bitcoin’s blockchain and typically occurs in less than an hour from when the transaction is completed.
Expenses Paid in Bitcoin
The Company enters into agreements with certain vendors and service providers that provide us with the option to settle their invoices in crypto assets. The amount due is fixed and is denominated in USD. There are no payment terms that include conversion options, variable settlement features, or alternative settlement provisions contingent upon future events or market price fluctuations that could potentially give rise to embedded derivatives.
The Company considers the guidance in FASB ASC 350, FASB ASC 606, FASB ASC 610, and FASB ASC 845 when it evaluates the derecognition of its crypto assets paid to vendors in lieu of cash payments. In these transactions, we have been invoiced by a vendor and given the option to pay in USD or crypto assets, typically Bitcoin. The amount of Bitcoin is determined by the market wide and easily determined price in accordance with the guidance of FASB ASC 820, Fair Value Measurement. The Company records as an expense the USD value of the invoice and then considers the above references to determine the proper way to derecognize the intangible long-lived asset used as payment.
We consider the scoping exceptions for each of those topics and conclude that that the scope of 610-20 most closely matched the facts of the transactions. ASC 610-20-15-2 states “nonfinancial assets within the scope of this Subtopic include intangible assets,” which is how the Company treats crypto assets.
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We evaluated two possibilities to exclude these transactions from the scope of FASB ASC 845, Nonmonetary Transactions. The relevant exceptions to the scope of that Topic are as follows:
1. The transfer of goods or services in a contract with a customer within the scope of ASC 606 in exchange for noncash consideration (ASC 845-10-15-4(j))
2. The transfer of a nonfinancial asset within the scope of ASC 610-20 in exchange for noncash consideration (ASC 845-10-15- 4(k))
For these transactions, our usage of the crypto asset is as a payment instrument to a vendor, therefore our interpretation of (1) above is for ASC 606 not to apply. We interpret (2) above to apply when the Company pays a vendor (who is not a customer) with a crypto asset (nonfinancial asset) in lieu of paying that same vendor with Fiat Currency (USD). Therefore, we account for the derecognition of the crypto assets, in these transactions, under the guidance of ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets. This is the same guidance as in ASC 350-10-40-1, Transfer or Sale of Intangible Assets.
ASC 610-20-15-2 explicitly states the scope to include intangible assets. We treat crypto assets as intangible assets. We then apply the general principle of ASC 610-32-2 for recognizing the gain or loss for the difference between the amount of goods or services we receive (fair market value, per ASC 820 Level 2) and the cost of acquiring the crypto asset.
We record invoices from vendors in the appropriate expense category, in the correct time period in which services were provided, in USD and for vendors who elect to be paid in crypto assets, we transfer the crypto assets at market value at the time of transfer in line with ASC 820, Fair Value Measurement. We then recognize as a gain or loss, the difference between the current carrying value of the crypto asset, and its market value to cost of revenues in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
Income Taxes
Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which are recorded on the condensed consolidated balance sheets in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
The Company recognizes interest and penalties related to uncertain tax benefits on the income tax expense line in the accompanying condensed consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the condensed consolidated balance sheets.
ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s condensed consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As a result of the implementation of ASC 740-10, the Company does not have a liability for unrecognized income tax benefits.
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Commitments and Contingencies
We assess legal contingencies in accordance with ASC 450—Contingencies and determine whether a legal contingency is probable, reasonably possible or remote. When contingencies become probable and can be reasonably estimated, we record an estimate of the probable loss. When contingencies are considered probable or reasonably possible but cannot be reasonably estimated, we disclose the contingency when the probable or reasonably possible loss could be material.
Litigation
From time to time in the regular course of our business, we are involved in various lawsuits, claims, investigations and other legal matters. Except as noted under, or incorporated by reference in, “Legal Proceedings” herein, there are no material legal proceedings pending or known by us to be contemplated to which we are a party or to which any of our property is subject to.
We believe that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and we are unable to estimate the amount or range of loss, if any, in excess of amounts accrued. We do not believe that the ultimate outcome of these actions will have a material adverse effect on our financial condition but could have a material adverse effect on our results of operations, cash flows or liquidity in a given quarter or year.
Off-Balance Sheet Arrangements
In the normal course of business, the Company’s contract with the government of El Salvador for the operation of the Chivo branded ATMs obligates the Company to assume the risk of loss for funds used in the operation of the Chivo branded ATMs while those funds are in transit. The Company has contracted with licensed and insured cash logistics companies to securely transport these funds. The logistics companies’ insurance covers in full the value of the funds in transit however, in the event of a loss or destruction of the funds in transit, the Company could encounter a timing delay between insurance payment for lost funds and the date of actual loss. The amount of funds in transit varies based on multiple factors including but not limited to economic activity, seasonality, holiday and bank closure calendars. The amount of funds in transit as of March 31, 2026 and December 31, 2025, were $10.215 million and $6.400 million, respectively.
Accounting Pronouncements Pending Adoption
In October 2023, the FASB issued ASU 2023-06 "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosures Update and Simplification Initiative". The guidance amends certain disclosure and presentation requirements related to the statement of cash flows, accounting changes and error corrections, earnings per share, interim reporting, commitments, debt, equity, derivatives, transfers and services and various industry specific guidance. For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the existing disclosure requirements, the amendments will not become effective. Early adoption is not permitted. The Company is in the process of assessing the overall impact of adopting this guidance on its disclosures.
In November 2024, the FASB issued ASU 2024-03. "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)". The ASU requires expanded disclosures and disaggregation of certain expenses included within the income statement. The amendments become effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is still assessing the impacts of this guidance on its condensed consolidated financial statements.
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Recently Issued Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information required under this item..
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
With the participation of the Company’s principal executive officer and principal financial officer, management evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2026. Based on their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.
The Company’s disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in the reports it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosures.
Material Weaknesses in Internal Control Over Financial Reporting
In connection with the preparation of the Company’s consolidated financial statements as of December 31, 2025, management identified material weaknesses in the Company’s internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
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As of December 31, 2025, the material weakness in our internal control over financial reporting related to (i) the fact that the Company did not have formalized system of internal control over financial reporting in place to ensure that risks are properly assessed, certain accounts are properly reconciled, controls are properly designed and implemented and internal controls are properly monitored and functioning, and (ii) the Company’s reliance on IT systems and the use of service organizations to initiate, process, and record transactions, for which it did not evaluate or test the respective control objectives and data provided by the service organizations, and did not maintain a sufficient complement of formally documented general IT controls over access, segregation of duties, security, and change management. Management has concluded that these material weaknesses arose because, the Company did not have the necessary business processes, personnel and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.
To address the material weaknesses, the Company will need to add personnel as well as implement additional financial reporting processes and related internal controls. Management intends to continue to take steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, further enhancing the Company’s accounting processes and risk assessment, and by designing, implementing and monitoring the respective controls. Management will not be able to fully remediate these material weaknesses until these steps have been completed and the controls have been operating effectively for a sufficient period of time. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects or that the actions that management may take in the future will be sufficient to remediate the control deficiencies that led to the material weaknesses in internal control over financial reporting or that they will prevent or detect potential future material weaknesses. The Company’s current controls and any new controls that management develops may become inadequate because of changes in conditions in the business and weaknesses in disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm the operating results or cause the Company to fail to meet the reporting obligations and may result in a restatement of the Company’s financial statements for prior periods.
Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as possible. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock, and/or result in litigation against us or our management.
Notwithstanding the above identified material weaknesses, management believes the Condensed Consolidated Financial Statements as included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the periods presented in accordance with generally accepted accounting principles in the United States.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Limitations on the Effectiveness of Controls
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be a party to litigation that arises in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We believe the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued financial position, results of operations or cash flows.
Such current litigation or other legal proceedings are described in, and incorporated by reference in, this “Item 1. Legal Proceedings” of this Form 10-Q from, “Part I – Item 1. Financial Statements” in the Notes to Unaudited Condensed Consolidated Financial Statements in “Note 15 – Commitments and Contingencies”, under the heading “Legal Matters”. The Company believes that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation or other legal claims could change in light of the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
Additionally, the outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
Item 1A. Risk Factors
Except as noted below, there have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 6, 2026, under the heading “Item 1A. Risk Factors”, except as set forth below, and investors should review the risks provided in the Annual Report and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report and below, any one or more of which could, directly or indirectly, cause the Company’s 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 the Company’s business, financial condition, operating results and stock price.
We are not subject to the reporting requirements of Section 12 of the Exchange Act and are therefore a voluntary filer. We expect that, shortly after the filing of this Report, we will file a Form 15 and stop filing periodic and current reports with the SEC, which will significantly reduce the information available about us and could adversely affect the liquidity and value of our common stock.
We have not registered our common stock under Section 12 of the Securities Exchange Act, and we currently have fewer than 300 holders of record of our common stock. As a result, we are not required to file periodic reports with the SEC pursuant to Section 13(a) of the Exchange Act and are currently a voluntary filer.
While we have filed this Quarterly Report on Form 10-Q with the SEC, on May 12, 2026, our Board of Directors approved the filing of a Form 15 with the SEC to suspend our voluntary reporting obligations under Rule 12h-3 of the Exchange Act due to the significant costs and administrative burdens associated with being a reporting company. We expect to file the Form 15 shortly after the filing of this Report. Upon the filing of the Form 15, our obligation to file periodic reports, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, will be immediately suspended.
Assuming we cease filing reports with the SEC, current and prospective investors may have limited or no access to information regarding our business, financial condition and results of operations. The absence of publicly available information could impair investors’ ability to make informed investment decisions, and could further reduce the trading market and volume for our common stock, which is already limited. Any such reduction in available information and market liquidity could result in increased volatility and a decline in the trading price of our common stock, and investors may have difficulty buying or selling shares at desired prices, or at all.
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Increasing state regulation of cryptocurrency ATMs, including fee caps and similar restrictions, has in the past, and is expected to continue in the future, to reduce our revenue per transaction and could materially adversely affect our business, financial condition and results of operations.
A growing number of U.S. states have enacted, and many additional states are actively considering, legislation and regulations governing cryptocurrency ATMs (including Bitcoin ATMs), including measures that directly or indirectly limit the fees that operators may charge to customers. For example, in California, the Digital Financial Assets Law, effective January 1, 2025, prohibits kiosk operators from charging fees in excess of the greater of $5 or 15% of the transaction amount. These types of fee limitations are significant in light of the fact that we have historically derived the majority of our revenue from transaction fees, which for the three months ended March 31, 2026, and 2025, was 34% and 20%, respectively.
In addition to fee caps, numerous states have adopted or proposed other restrictions (such as transaction limits, enhanced disclosure requirements, licensing regimes, refund obligations and, in certain cases, outright prohibitions on cryptocurrency ATMs), that, individually or in the aggregate, have in the past, and may in the future, reduce transaction volume, increase compliance costs and limit our ability to operate profitably. Moreover, regulatory activity is accelerating, with numerous states having adopted or proposed new laws governing cryptocurrency kiosks in recent periods, and additional states expected to follow.
These regulatory developments are largely driven by concerns regarding fraud and consumer protection, and there can be no assurance that future legislation will not impose additional fee caps, stricter limitations or other requirements that could further constrain our business or make it impossible or uneconomic for us to operate. To the extent that fee caps or similar restrictions are adopted in jurisdictions in which we operate, our revenue per transaction is expected to decline, which would adversely affect our overall revenues and margins. In addition, if such regulations render it uneconomical for us to operate in certain jurisdictions, we may be required to reduce, suspend or discontinue operations in those states, which would further reduce our revenues and could result in impairment charges or other losses.
As additional states adopt similar or more restrictive regulatory frameworks, including potential fee caps or prohibitions on cryptocurrency ATMs, our ability to maintain or grow our revenue may be materially adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
There have been no sales of unregistered securities during the quarter ended March 31, 2026, and for the period from April 1, 2026, to the filing date of this Report.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
(a) The below event occurred within four business days of the filing date of this periodic report and as such, the Company is disclosing the occurrence of the events below under “Item 8.01 Other Events”, instead of a stand-alone Current Report on Form 8-K:
Item 8.01 Other Events.
On May 12, 2026, our Board of Directors approved the filing of a Form 15 with the SEC to suspend our voluntary reporting obligations under Rule 12h-3 of the Exchange Act due to the significant costs and administrative burdens associated with being a reporting company. We expect to file the Form 15 shortly after the filing of this Report. Upon the filing of the Form 15, our obligation to file periodic reports, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, will be immediately suspended.
The below events occurred during the period covered by this Quarterly Report on Form 10-Q and were not disclosed in a Current Report on Form 8-K:
The Compensation Committee of the Company approved ad hoc bonuses of $870,000 to officers and employees of the Company, which were paid on March 12, 2026. Included in the bonuses were $500,000 paid to Mr. Matias Goldenhörn, the Chief Executive Officer and Director of the Company, and $75,000 paid to Mr. Carlos Carreño, Chief Operating Officer and Director of the Company.
(c) During
the three months ended March 31, 2026, none of our directors or “officers” (as such term is defined in Rule 16(a)-1(f) under
the Exchange Act)
Item 6. Exhibits
The following exhibits are filed herewith or incorporated by reference herein:
Exhibit Number |
Description of Exhibit | Filed or Furnished Herewith |
Form | Exhibit | Filing Date | File No. |
|||||||
| 31.1 | * | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X | ||||||||||
| 31.2 | * | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X | ||||||||||
| 32.1 | ** | Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act | X | ||||||||||
| 32.2 | ** | Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act | X | ||||||||||
| 101.INS | * | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document* | X | ||||||||||
| 101.SCH | * | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||
| 101.CAL | * | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||
| 101.DEF | * | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||
| 101.LAB | * | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||
| 101.PRE | * | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||
| 104 | * | Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set | X | ||||||||||
____________________
| * | Filed herewith |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized
| Date: May 14, 2026 | By: | /s/ Matias Goldenhörn |
| Name: | Matias Goldenhörn | |
| Title: | President and Chief Executive Officer (Principal Executive Officer) | |
| Date: May 14, 2026 | By: | /s/ Omar Jimenez |
| Name: | Omar Jimenez | |
| Title: | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
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