Athena Bitcoin Global 10-K for FY2025
Athena Bitcoin Global (ABIT)
About this 10-K
Athena Bitcoin Global filed this 10-K on March 6, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $234.6M
- down 17.8% from $285.39M a year earlier
- Net loss
- $6.03M
- compared with net income of $10.28M a year earlier
- Diluted EPS
- -$0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM
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(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year 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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(I.R.S. Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
____________________
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐
Yes ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐
Yes ☒
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.
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
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐
Yes
On June 30, 2025, the last day of the registrant’s
most recently completed second quarter, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately
$
As of March 6, 2026, the registrant had shares of its Common Stock, $0.001 par value, outstanding.
Athena Bitcoin Global
Annual Report on Form 10-K
Table of Contents
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (“Report”) 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. |
| ii |
These statements are not guarantees of future performance or results. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. These factors include those set forth under “Item 1A. Risk Factors”, below.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Annual Report on Form 10-K. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
You should read the matters described in “Item 1A. Risk Factors” and the other cautionary statements made in this Report, and incorporated by reference herein, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
Glossary of Bitcoin and Crypto Terms
The following are abbreviations, acronyms and definitions of certain terms used in this Report, which are commonly used in our industry:
| · | Address: An alphanumeric reference to where crypto assets can be sent or stored. | |
| · | 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. |
| iii |
| · | 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. | |
| · | 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. |
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| · | 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. | |
| · | Stable Coin: 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. | |
| · | 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 one 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. | |
| · | USD Coin (USDC): A blockchain-based cryptocurrency designed to maintain a stable value relative to one U.S. Dollar $1.00, with tokens backed by reserve assets consisting primarily of U.S. dollars and short-term U.S. Treasury securities. | |
| · | 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). |
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PART I
Item 1. Business
Introduction
The information included in this Report on Form 10-K should be read in conjunction with the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplemental Data” of 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 we have not commissioned any of the market or survey data that is presented in this Report. We are responsible for all 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 the section entitled “Item 1A. Risk Factors”. 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 Athena Bitcoin Global, is also based on our good faith estimates.
Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,”, “ABIT” and “Athena Global” in this Report refer specifically to Athena Bitcoin Global, and its consolidated subsidiaries.
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; | |
| · | “Securities Act” refers to the Securities Act of 1933, as amended; and |
All dollar amounts in this Report are in U.S. dollars and in thousands unless otherwise stated.
| 1 |
Available Information
We file annual, quarterly, and current reports and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at https://www.sec.gov. Copies of documents filed by us with the SEC (including exhibits) 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 https://athenabitcoin.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed pursuant to Section 15(d) of the Exchange Act of 1934, as amended, will be available through our website free of charge as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. 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.
Reverse Stock Split
As previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 10, 2025, on July 7, 2025, the majority stockholders of the Company, holding an aggregate of 2,118,734,867 shares of common stock or 51.7% of the Company’s then total voting shares as of the July 2, 2025 record date for the Written Consent (as defined below), following the recommendation of the Board of Directors of the Company, took action via a written consent to action of the majority shareholders in lieu of a meeting of shareholders (the “Written Consent”), and voted to approve, among other things, the filing of a Certificate of Amendment to the Company’s Articles of Incorporation, as amended, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 per share, by a ratio of one-for-three hundred (the “Reverse Stock Amendment” and the “Reverse Stock Split”). The Reverse Stock Split will have no effect on the Company’s authorized shares of common stock or preferred stock or the par value of the Company’s common stock or preferred stock. The Reverse Stock Split has not been implemented to date, and the Reverse Stock Amendment has not been filed with the Secretary of State of Nevada to date. As a result, the effects of the Reverse Stock Split have not been affected throughout this Report. The Company may abandon the Reverse Stock Split or may seek stockholder approval to adjust the Reverse Stock Split ratio in the future.
Organizational History
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-three states and the territory of Puerto Rico in the United States, and four countries in Central and South America as of February 25, 2026 (see below for corporate organizational chart and descriptions). The Company places its machines in convenience stores, shopping centers, and other easily accessible locations.
The Company 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, with GamePlan, Inc. as a sole surviving entity. The Company was involved in various businesses, including, gaming and other consulting services, prior to becoming a company seeking acquisitions (a “shell company” as defined in Rule 405 of the Securities Act). The Company was a reporting issuer under the Exchange Act from 1999 until 2015 when it filed Form 15 pursuant to Rule 12g-4(a)(1) with the Commission.
On March 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Plan”) with VPartments Inc. (“VPartments”); VPartments Acquisition Corp., a Georgia corporation that was formed as a wholly-owned subsidiary of the Company (the “Merger Subsidiary”); and Mark D. Anderson, Sr., who was the then beneficial owner of approximately 60.1 percent of the issued and outstanding shares of common stock of VPartments. Under the terms of the Plan, the parties agreed that at the closing, the Merger Subsidiary would merge with and into VPartments, with each 7.52034545757 then-outstanding shares of VPartments common stock to be converted into the right to receive one share of the Company’s common stock. The Company issued a total of 150.525 million “restricted” shares of its common stock to the stockholders of VPartments, causing such stockholders to become the collective owners of approximately 90.8 percent of the Company’s then issued and outstanding shares of common stock. In connection with the change of control pursuant to the Plan, the Company’s then current officers and directors resigned, and the officers and directors were appointed. The Company (GamePlan, Inc.) had no operations and was seeking acquisitions from April 2014 until January 30, 2020. The Company (GamePlan, Inc.) did not enter into debt obligations during that period.
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In July, 2018, Magellan Capital Partners, Inc., a Wyoming corporation, became a majority shareholder of the Company after the purchase of 90.421 million shares of common stock (approximately 55% of the Company’s then outstanding shares of common stock) in a private transaction with a majority shareholder, Mark D. Anderson. Following the acquisition of control, Dempsey Mork, a beneficial owner of Magellan Capital Partners, Inc., was appointed a sole officer and director of the Company, and subsequently elected as its sole director at a November, 2018 shareholders’ meeting. On December 6, 2018, Mr. Mork entered into an agreement with Robert Berry, a former officer and director, to cancel all debts due to Mr. Berry from the Company in consideration for the issuance of a total of 90.421 million shares of common stock of the Company to Mr. Berry and another shareholder.
On January 14, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”), by and among the Company, Athena Bitcoin, Inc., a Delaware corporation (“Athena Bitcoin”) incorporated in 2015, and certain shareholders of Athena Bitcoin. The Agreement provides for the reorganization of Athena Bitcoin, with and into the Company, resulting in Athena Bitcoin becoming a wholly-owned subsidiary of the Company (the “Share Exchange”). The Company had a total of 486.171 million shares outstanding prior to the Share Exchange. The Agreement was for the exchange of 100% shares of the outstanding common stock of Athena Bitcoin, for 3.594 billion shares of the Company’s common stock (an exchange rate of 1,244.69 shares of common stock of the Company for each share of Athena Bitcoin common stock). The exchange rate was determined by the Board of Directors of Athena Bitcoin based on the arbitrary valuation of Athena Bitcoin by its Board of Directors and negotiations with the principals of the Company. No independent valuation was obtained. The authorized capital stock of Athena Bitcoin immediately preceding the closing of the Share Exchange consisted of (i) 3 million shares of the Athena Bitcoin’s common stock, par value $0.001 per share, authorized, of which: 2.887 million shares were issued and outstanding immediately prior to the Share Exchange, which included the following conversion events in connection with the Share Exchange: (i) 1.328 million shares resulting from the conversion of certain Simple Agreements for Future Tokens (“SAFT”) issued by Athena Bitcoin in 2018 pursuant to the SAFT provisions providing for the conversion into Athena Bitcoin equity under certain conditions were exchanged for 1.653 billion shares of the Company’s common stock at a conversion price of $4.09; (ii) 93.1 thousand shares resulting from the exercise of certain outstanding warrants at an average exercise price of $2.00 per share, issued by Athena Bitcoin were exchanged for 115.888 million shares of the Company’s common stock; (iii) 126.7 thousand shares resulting from the exercise of stock options issued by Athena Bitcoin were exchanged for 157.635 million shares of the Company’s common stock; and (iv) 336.7 thousand shares resulting from the conversion in connection with a conversion and release agreement were exchanged for 419.1 million shares of the Company’s common stock. The closing of the Share Exchange transaction occurred as of January 30, 2020. Following the closing date of the transaction, there were 4.080 billion shares of the Company’s common stock outstanding. The Company had 5 billion shares of common stock authorized as of the closing date of the Share Exchange transaction. Subsequently, in May 2020, the Company filed amended and restated articles of incorporation authorizing a total of 4.41 billion shares of common stock. In January 2023, the Company filed second amended and restated articles of incorporation authorizing 10 billion shares of common stock and 5 million shares of preferred stock, at $0.001 par value per share.
The Company approved the name change from “GamePlan, Inc.” to “Athena Bitcoin Global” on March 10, 2021, by the unanimous consent of its Board of Directors and a majority consent of its shareholders. The Company filed an amendment to its Articles of Incorporation with the Secretary of State of the state of Nevada on April 6, 2021, with the effective date of April 15, 2021. The Company’s name change, and trading symbol change to “ABIT” were declared effective by FINRA on June 9, 2021.
Since our resale Form S-1 Registration Statement was declared effective on May 14, 2025, we have been subject to the reporting requirements of Section 15(d) of the Exchange Act and file annual, quarterly, and current reports, and other information with the SEC.
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The Company owns 100% of our operating subsidiary, Athena Bitcoin, Inc., a Delaware corporation. Our domestic business operations are conducted by Athena Bitcoin, Inc. We also have operating subsidiaries in the specific countries where we operate. Our wholly-owned subsidiaries located outside of the United States are: Athena Bitcoin S. de C.V., incorporated in Mexico (“Athena SV”); 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 Salvador, S.A. de C.V., incorporated in El Salvador; and Athena Business Holdings Panama S.A. incorporated in Panama.
| (1) | Athena Bitcoin, Inc. owns 99% of Athena Holdings El Salvador S.A. de C.V. and Eric Gravengaard, our former Chief Executive Officer and Chief Financial Officer, holds 1% on behalf of the Company. |
| (2) | Athena Bitcoin, Inc. beneficially owns and controls Athena Holdings Colombia SAS which is nominally owned by Eric Gravengaard 95% and Matias Goldenhörn 5% (our current Chief Executive Officer). |
| (3) | Athena Bitcoin, Inc. beneficially owns and controls Athena Holding Company SRL which is nominally owned by Eric Gravengaard 45%, Gilbert Valentine 45%, and Matias Goldenhörn 10%. |
| (4) | Athena Bitcoin, Inc. owns 2,999 Shares of Athena Bitcoin S de C.V. and Matias Goldenhörn owns 1 Share on behalf of the Company. |
| (5) | Athena Bitcoin, Inc. is the only member of Athena Holdings of PR, LLC. |
| (6) | Athena Bitcoin, Inc. owns 100% of Athena Business Holdings Panama S.A. |
Our corporate office is located at 1 SE 3rd Avenue Suite 2740, Miami, Florida 33131, and our telephone number is 312-690-4466. Our website is www.athenabitcoin.com. The information on, or that can be accessed through, our website is not part of this Report and is not incorporated by reference herein.
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Private Financings of Athena Bitcoin Global
On January 31, 2020, the Company closed a private placement of its 8% Convertible Debentures in the total amount of $3.1 million (the “8% Convertible Debentures”). The closing of the private placement was subject to the closing of the Share Exchange transaction by the Company. There were two purchasers of the 8% Convertible Debentures: KGPLA, LLC, , an entity in which Michael Komaransky, a former director and 40.8% beneficial owner of the Company has a controlling interest and serves as Manager of such entity, and whose Chief Investment Officer is Huaxing “Jason” Lu, our director ($3.0 million principal amount of 8% Convertible Debenture) and Swingbridge Crypto III, LLC ($125 thousand principal amount of 8% Convertible Debenture), an affiliate and former noteholder of the Company. The 8% Convertible Debentures had a maturity date of January 31, 2025, which was extended until January 31, 2026, and bear interest at 8% per annum. The purchasers have an option to convert the outstanding principal and accrued interest amount of their respective 8% Convertible Debentures into shares of common stock of the Company at the lower of $0.012 per share or, if lower, a price determined by specified formulas depending on the type of conversion event. Swingbridge Crypto III, LLC. converted its $125 thousand 8% Convertible Debenture into 10,416,666 shares of the Company’s common stock in December, 2021. In connection with the 8% Convertible Debentures private placement, the purchasers acquired certain registration and voting rights, discussed below under “Certain Relationships and Related Transactions, and Director Independence”. The 8% Convertible Debenture held by KGPLA, LLC was amended and restated as of May 15, 2023 and became a secured, and not general unsecured, obligation of the Company (the “Amended and Restated Secured Convertible Debenture”), on par with the notes issued pursuant to the Senior Secured Loan Agreement entered into as of the same date. The repayment of the Amended and Restated Secured Convertible Debenture was secured by all the assets of the Company, except for property previously pledged to Banco Hipotecario, and with respect to such assets, the Company granted the lenders a second priority lien pursuant to that certain Security Agreement dated as of the date thereof by the Company, KGPLA, LLC. and Athena Bitcoin, Inc. and Athena Holdings El Salvador SA de C.V., the Company’s subsidiaries as guarantors.
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. 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. The 8% Convertible Debenture (as amended and restated May 15, 2023) remained outstanding at December 31, 2024 and, as indicated above, was voluntarily repaid in full on November 24, 2025.
Who We Are, What We Do and Industry Trends
We are an early entrant in the crypto asset market and one of the first U.S. publicly-traded companies using crypto assets and blockchain technologies in our business operations which include a global network of Athena Bitcoin automated teller machines (ATMs) that allow our customers to buy or sell bitcoin in exchange for their local Fiat Currency, such as the U.S. Dollar.
We are focused on making Bitcoin more easily accessible, functional and usable for people, businesses and other organizations. Athena believes the great promise of Bitcoin is the democratization of money. We believe that the traditional system of money and banking, with its many layers, costs and inefficiencies, results in the disenfranchisement of enormous numbers of individuals and businesses in the world. According to the World Bank Group’s 2025 Global Findex Database, 1.3 billion people in the world are unbanked. This is typically due to geographic and socio-economic factors. We believe that Bitcoin, altcoins, blockchains and smart contracts are poised to transform the international financial order by providing the unbanked and billions of others in the world with a connection to the new global digital financial system that allow our customers to buy or sell bitcoin in exchange for their local Fiat Currency, such as the U.S. Dollar.
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About Bitcoin
Bitcoin is a system for decentralized digital value exchange that is designed to enable units of Bitcoin to be transferred across borders without the need for currency conversion. The supply of Bitcoin is not determined by a central government, but rather by an open-source software program that limits both the total amount of Bitcoin that will be produced and the rate at which it is released into the network. The responsibility for maintaining the official ledger of who owns what Bitcoin and for validating new Bitcoin transactions is not entrusted to any single central entity. Instead, it is distributed among the network’s participants. As such, crypto assets are transferred entirely online, with no physical coins or bills. Instead of being held at a bank, crypto assets are held in one’s digital wallet, which is an online vault for holding public and private keys for crypto assets. Instead of being transferred through banks, brokers, clearing houses, custodians and payment processors, crypto assets are transferred directly to the recipient online and transactions are recorded on a blockchain or public ledger. This allows for an efficient and fully transparent transfer of funds. The value of each crypto asset is determined by trading among buyers and sellers all over the world. As of February 16, 2026, per coingecko.com, the overall market capitalization of crypto assets was $2.4 trillion and Bitcoin had a market capitalization of $1.3 trillion representing 56.4% of the market. While Bitcoin has recently declined in value by approximately 30% as of February 16, 2026, compared to December 31, 2025, and although the future of cryptocurrency is largely unpredictable, a study undertaken by Grand Review Research projects that the global cryptocurrency market will reach $18.26 billion USD by 2033, growing at a CAGR of 14.5 percent from 2026 to 2033 (https://www.grandviewresearch.com/industry-analysis/cryptocurrency-market-report ).
One challenge for Bitcoin and other crypto assets is that they typically cannot be used to pay for common expenditures like groceries, utility bills, or a house. When someone wants to spend their Bitcoin, they will generally need to convert it to their local currency. Crypto asset owners can use crypto exchanges like Coinbase and Kraken and acquire U.S. Dollars by selling their crypto asset(s). On Coinbase, Kraken or other crypto exchange, users can oftentimes sell their Bitcoin or other crypto assets for up to $50 thousand U.S. Dollars a day which can be wired or otherwise sent directly to a bank account and typically usable after one or two business days. Crypto exchanges are well suited for larger, planned transactions but can be inconvenient or entirely unsuitable for smaller or more immediate transactional needs or for those who do not have access to institutionalized banking in their country. They also do not offer the level of convenience that bank customers are accustomed to. Most people in the United States use bank ATMs rather than bank tellers to get spending cash due to their convenience.
ATM Market
According to Research & Markets’ ATM Services Market Report, dated January 2026, The ATM services market size has grown strongly in recent years and is projected to grow from $23.23 billion in 2025 to $24.71 billion in 2026 at a compound annual growth rate (CAGR) of 6.4%. The growth in the historic period can be attributed to expansion of retail banking infrastructure, increasing consumer demand for self-service banking, growth of off-premise atm installations, rising cash circulation in emerging economies, and wider acceptance of automated banking channels. However, as of December 31, 2025, there were approximately 39.2 thousand Bitcoin ATMs worldwide, according to information posted on MEXC, looking at data from Finbold Research based on Coin ATM Radar figures. This figure represents a net increase of 1.4 thousand machines during 2025, marking a 3.8% year-over-year growth, with the United States remaining the dominant market.
Key details regarding the 2025 Bitcoin ATM market:
| • | Total Count: The number of machines are estimated to have grown from 37.7 thousand on January 1, 2025, to 39.2 thousand by year-end. | |
| • | Top Regions: The United States added 0.5 thousand machines to reach a total of 30.6 thousand, | |
| • | Other Regions: Canada added 0.28 thousand machines and Europe added 0.1 thousand, bringing its respective totals to 3.7 thousand and 1.8 thousand while Australia experienced the fastest growth, adding 0.6 thousand machines (a 43% increase). | |
| • | Growth Trend: While installation growth slowed compared to previous years, the network continued to expand, averaging nearly four new installations per day globally throughout 2025. |
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Our two-way ATMs play a role similar to the ATMs by providing cash conveniently and quickly. Individuals that own Bitcoin can visit our two-way ATMs and get up to $2,000 in cash in a single transaction. While our two-way ATMs dispense cash to Bitcoin owners like a typical ATM cash machine does for a bank customer, our ATMs capabilities are more akin to currency exchange booths at international airports. Our ATMs perform real-time exchange between Bitcoin and Fiat Currency. The majority of our customers use our services to purchase Bitcoin with fiat currencies, most commonly the U.S. Dollar. However, in Central and South America, there is a more even distribution between purchases and sales of crypto assets. While our two-way ATMs differ substantially in function from bank ATMs, they provide a similar level of convenience. Our two-way ATMs benefit from the public’s vast experience using bank ATMs, which contributes to making our two-way ATMs a user-friendly and familiar method for anyone who wishes to buy or sell Bitcoin.
The Birth of Bitcoin ATMs
In the earliest days of Bitcoin, most transactions were done in person - often facilitated by websites. These sites matched prospective buyers with sellers and facilitated communications and wallet coordination, allowing them to meet in public places like coffee shops and street corners, and exchange Bitcoin for envelopes of cash. The first Bitcoin ATMs began appearing in 2014. These ATMs were popular with retail customers because they offered instantaneous access to Bitcoin in a familiar and safe method.
According to a CNBC article (Why Bitcoin ATMs are taking over malls and gas stations across the U.S. Published November 7, 2023), Bitcoin ATMs exploded in popularity between 2020 and mid-2022, with a peak of approximately 34 thousand Bitcoin ATMs located in the United States in mid-2022. There are many operators of Bitcoin ATM networks, from crypto businesses to major corporate and conventional kiosk companies including Coinstar.
Some Bitcoin ATMs offer one-way exchange, allowing customers to only buy crypto assets. Others offer two-way exchange, so customers can buy crypto assets for cash, or sell some of their crypto assets and receive cash. Athena Bitcoin ATMs currently serve clients with only one crypto asset, Bitcoin, in either one-way or two-way exchanges, depending on the functionality of the ATM machine.
Industry Summary
The Company is an active participant in the operation of Bitcoin ATMs in the United States and Latin America. More broadly we operate in the market of retail sales of crypto assets, where we facilitate small purchases of Bitcoin. There are multiple avenues that retail consumers, individuals purchasing small amounts from one dollar to a few thousand dollars’ worth, can purchase or dispose of crypto assets.
The Company operates Bitcoin ATMs in the United States and Latin America. However, on a broader level, we are better defined as operating in the market of retail sales of crypto assets whereby we facilitate the purchases of Bitcoin. Our consumers can purchase as little as $1 dollar worth of Bitcoin and up to a few thousand dollars’ worth of Bitcoin.
Bitcoin Adoption
Parties that want to use their bank accounts to buy Bitcoin can do so without an ATM. These transactions are the domain of exchanges and specialty apps including services from Coinbase, Gemini, Binance, Kraken, and Square. These services generally accept U.S. Dollar transfers from bank accounts and do not accept physical currency. These services may or may not, depending on several factors including method of deposit, allow the purchaser of a crypto asset on their platforms to immediately transfer the crypto asset into their own wallet. These services cater to larger purchasers and investors of crypto assets. Users of exchanges and specialty apps may use ATMs as a convenient method to get cash, similar to how a bank account and credit card holders use bank ATMs.
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According to Crypto.com in its Crypto Market Sizing 2025 report dated January 16, 2026:
| • | Global cryptocurrency owners increased by 12.4% in 2025, rising from 659 million in 2024 to 741 million in 2025. |
| • | Based on our on-chain estimates: |
| • | Bitcoin (BTC) owners grew by 8.3%, from 337 million in 2024 to 365 million in 2025, accounting for 49.3% of global owners. | |
| • | Ethereum (ETH) owners grew by 22.6%, from 142 million in 2024 to 175 million in 2025, accounting for 23.6% of global owners. |
| • | There could be approximately 300,000 to 1.2 million people invested in BTC via US spot exchange-traded funds (ETFs), in addition to the estimates above. |
We believe the trends shown in the table above are due in part to an increase in companies and online service providers that are helping to make Bitcoin and other crypto assets more widely and easily usable. This trend is also correlated with the increase in the price of Bitcoin and significant events that have occurred in the crypto economy over the past several years, notwithstanding the recent declines beginning at the end of 2025 and continuing into 2026. Given the infancy of the new digital global financial system, there has been significant variability of price since the inception of Bitcoin. There has also been negative press events, such as the FTX bankruptcy and Terra (LUNA), that have caused fluctuations in the price of Bitcoin and in Bitcoin’s global adoption. However, we believe that the continued increase in crypto owners shown in the table above demonstrates the durability of the new digital global financial system, and the Company is optimistic that as worldwide adoption continues, the variability of the price and the frequency of these negative events will decrease.
While the COVID-19 pandemic detrimentally impacted the world economy overall and aspects of our business operations, we also believe that the COVID-19 pandemic demonstrated the benefits of crypto assets to the world. Christine Zhenwei Qiang, Global Director for Digital Development Global Practice for the World Bank, said in 2022, that “the COVID-19 pandemic has highlighted the fundamental role that digital infrastructure can play in rapidly delivering services and social assistance to people. Integration of digital ID, digital payments, and trusted data sharing platforms is critical for serving the poor at scale and connecting communities to opportunities.”
We believe that the use of Bitcoin ATMs will continue to rise as the Bitcoin and crypto industry and its many interconnected service providers expand.
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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.
We operate in the market of retail sales of crypto assets, where we facilitate small purchases of Bitcoin. There are multiple avenues that retail consumers, individuals purchasing small amounts from one dollar to a few thousand dollars’ worth, can purchase or dispose of crypto assets. We have several products in our platform that include:
| · | Athena Bitcoin ATMs; | |
| · | Athena Plus; | |
| · | White-label Service; | |
| · | Athena Pay; and | |
| · | Athena Bitcoin Affiliates Program. |
Athena Bitcoin ATMs
The Company is focused on developing, owning and operating a global network of Athena Bitcoin ATMs, which are free standing kiosks that permit customers to (i) either buy or sell Bitcoin (two-way ATMs) in exchange for cash (banknotes) issued by sovereign governments - often referred to as fiat currencies, or (ii) to buy Bitcoin (one-way ATMs) in exchange for 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.
The Company places its ATMs in convenience stores, shopping centers, and other easily accessible locations. Our network presently includes ATMs in thirty-three U.S. states, the territory of Puerto Rico along with Mexico, Colombia, Argentina, and El Salvador. We seek to expand our network in the U.S. and globally, and to further develop Athena Bitcoin as a trusted and preferred brand for parties seeking to exchange fiat currency for Bitcoin.
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 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 ATMs do not accept debit or credit cards. When the transaction is complete, a receipt will be printed showing exactly how many crypto assets have been bought and the receiving address. The Company’s 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.
Our hot wallets are maintained by BitGo, a regulated third-party custodian, and not by Company personnel. The Company has engaged BitGo (a qualified custodian) to secure our digital assets. BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions. By entrusting this function to BitGo, we add a layer of security and risk mitigation (given BitGo’s expertise and insurance arrangements) beyond what could be achieved with in-house custody.
At this time, the Company does not maintain any balance of crypto assets in cold storage. The crypto assets the Company holds are available for immediate sale. We do not have any insurance policies that cover the crypto assets held in our wallets.
We offer bitcoin for sale at all of our ATM machines. For the years ended December 31, 2025 and 2024, we completed 213,683 and 185,789 transactions in Bitcoin through our Bitcoin ATMs, respectively.
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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 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 years ended December 31, 2025, and 2024, the average markup on Bitcoin sold was 24% and 22%, respectively.
We offer bitcoin for sale at all of our ATM machines. We also buy bitcoin at some of our ATM machines (also known as two-way ATMs). The cash withdrawal limit from our two-way ATMs is $2,000 per transaction (maximum of $1,000 in California). We replenish or withdraw fiat currencies at our ATMs twice a week or depending on usage, using bonded security companies.
Between January 1, 2022, and December 31, 2025, Bitcoin’s price exhibited significant fluctuations. In early 2022, Bitcoin’s price was around $47,459 by the end of March, before declining to approximately $29,000 by May 11, 2022. The downward trend continued, with the price falling below $23,000 in June 2022. By the end of 2022, Bitcoin’s price was under $20,000. In 2023, Bitcoin’s price rose consistently, ending the year at $42,258. In 2024, Bitcoin’s price continued to rise, reaching a then all-time high of $106,147 on December 17, 2024. By December 31, 2024, the price was approximately $93,425. As of December 31, 2025, the price of Bitcoin was $87,711 and on August 14, 2025, Bitcoin reached an all-time high price of $124,457. Refer below for a graph from statista.com of the price of bitcoin from January 1, 2022 through December 31, 2025. This shows the fluctuations of the price of bitcoin over time.
BITCOIN PRICE
*Through February 1, 2026
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Bitcoin closing prices every 3 months from Jan 1, 2022 through February 1, 2026. Data source: Stooq Bitcoin historical quarterly data.
We believe that we are in the early stages of the new digital financial order system and that as crypto asset use cases expand and there is more worldwide adoption, the fluctuations in volume and price will decrease. Our focus is on prioritizing growth, especially in geographic areas where consumers are restricted from accessing the global financial system.
The Company has been active in increasing its geographic presence by expanding its Athena Bitcoin ATM Fleet. Refer below for a chart showing the active Athena Bitcoin ATMs from December 31, 2017, through December 31, 2025.
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TOTAL ACTIVE ATMS OVER TIME
Number of Bitcoin ATMs by Year
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| # of Bitcoin ATMs | 65 | 64 | 59 | 137 | 392 | 445 | 1,829 | 3,111 | 2,953 |
ATMs, by location, are presented below as of December 31, 2025.
ATMs BY LOCATION
| Country |
Number of Athena Bitcoin ATMs (as of December 31, 2025) |
Type of Fiat Currency | |
| Total | Two-Way | ||
| United States | 2,903* | - | U.S. Dollar |
| El Salvador | 27 | 24 | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| TOTAL | 2,953 | 47 | |
*Excludes Chivo, Sociedad Anónima de Capital Variable, a wholly-owned private company of the Government of El Salvador (“Chivo”) branded ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service.
As of October 5, 2022, effective July 1, 2022 and expiring on July 30, 2024, the Company and Chivo, signed a Master Services Agreement (“MSA”) and a Service Level Agreement (“SLA”) which replaced the existing Master Services Agreement, Contracts and Athena Service Addendums 1 and 2 with the Department of Treasury of El Salvador. The MSA and SLA include the same services, performance obligations, pricing and terms outlined in the original Master Services Agreement, Contracts and Addendums. In conjunction with the new MSA and SLA, the Company and CHIVO completed a financial settlement agreement secured by certain assets to reconcile reporting, and settle the balances owed between the parties. The settlement was completed as of April 2023 upon full satisfaction of all obligations thereunder. On December 20, 2024, a new three-year MSA and SLA with Chivo was signed effective December 1, 2024.
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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
We operate 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 Bitcoin 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 Bitcoin directly to the users of the Bitcoin ATM.
When a user purchases Bitcoin from a Chivo-branded Bitcoin ATM, the Bitcoin 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.
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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 mandatory 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 a Bitcoin 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 legislative changes and the Chivo transition, and do not foresee a negative impact on our business, in part because our existing Bitcoin 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.
This white-label service is comprised of installing and operating a fixed number of Bitcoin ATMs for Chivo. Our services provide Company owned Bitcoin ATMs to Chivo, which we operate on their behalf. These Bitcoin ATMs are located in El Salvador and in their consulates and other locations in the United States. In the U.S., the Company operated a total of 43 Bitcoin ATMS in service for Chivo and 2,903 Athena Bitcoin branded machines as of December 31, 2025. Our responsibilities operating the Bitcoin ATMs include ensuring that the Bitcoin ATMs have sufficient cash, performing repairs and maintenance, loading and unloading cash, setting up the network connections, and software upgrades, as necessary. We charge a separate monthly fixed fee to operate the Bitcoin ATM. We also charge a separate fixed fee for installation of the Bitcoin ATM as determined by an applicable contract. The fixed fees provided in the contract are not the same for each Bitcoin ATM and depend on the location of the Bitcoin ATM. The Company does not sell Bitcoin to the users of the machine, as the Bitcoin are the property of the Government of El Salvador. Since the initial installation of the agreed-upon Bitcoin ATMs, the Company only provides on-going support services for these Bitcoin ATMs. The Company has not installed any new white-label Bitcoin ATMs in fiscal years 2024, or 2025. The Company provided no services related to the Chivo ecosystem in fiscal years 2024, or 2025.
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 (43 of which are actively operating). We currently operate 194 Chivo Bitcoin ATMs in El Salvador, 14 Chivo Bitcoin ATMs at El Salvador consulates in the U.S., 29 Chivo Bitcoin ATMs in other U.S. locations, with 27 ATMs in storage (as of December 31, 2025).
Athena Pay
Athena Pay is a payment processor application (“app”); that allows retailers to create QR codes with the specific amount to be charged to customers in Bitcoin.
Athena Bitcoin Affiliates Program
The 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.
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Competitive Strengths
We are focused on strategically placing our ATMs in optimal locations that maximize both current income and future potential. Our Bitcoin ATMs are in urban, suburban, and rural locations. Our site selection criteria and metrics are a closely guarded proprietary aspect of our business. In placing our Bitcoin ATMs, we employ a data driven strategy based on a multitude of factors. In addition to data metrics, our placement strategy includes analysis of immediate trends, as we are in a dynamic business where usage is widening dramatically and often in unpredicted ways. Each location is chosen to complement the rest of the fleet and offer customers of diverse backgrounds access to convenient crypto assets transactions.
We are constantly working to improve our operational efficiency. Our Bitcoin ATMs serve as remote tellers that connect individuals to our cloud-based transaction operations. We utilize proprietary systems and methods of managing our currency transaction operations. The objective of our purchasing algorithms is to frequently re-balance our Bitcoin holdings to meet the dynamic demand of our many customers while minimizing risk of crypto asset rate fluctuations. Over-buying of Bitcoin can result in inefficiencies and exposure to price fluctuations while under-buying may temporarily prevent us from selling Bitcoin at our Bitcoin ATMs. We strive to improve the efficiency of our currency transaction operations to maximize our profits, manage risk and facilitate growth.
Our Bitcoin ATMs permit users to obtain Bitcoin directly in their personal bitcoin wallet, which allows users to have full control of their crypto assets. Other payment providers often utilize a centralized system where the users, while able to make payments in crypto for everyday expenditures, do not have control of their crypto wallet due to not controlling the private keys to their crypto assets. We believe that this is contrary to many user’s preferences, which is part of a transparent de-centralized digital financial system.
Business Strategies
We seek to grow and distinguish Athena Bitcoin services based on our method of location selection, our global expansion, operational efficiencies, and our authenticity as a crypto industry forerunner with respect to Bitcoin ATMs.
Our strategy is to become a global financial services company that can connect the world’s cash to the world of Bitcoin. We have spent years learning how to expand our business across borders. We believe that we have assembled the people, processes, and technologies to enable us to continue to grow our global footprint that we believe is unmatched by our competition.
According to a database earth report for 2025, the median age of the population in the United States is 38.5 years while in Latin America and the Caribbean, it is 31.7 years.
As reported by the joint FINRA Foundation-CFA Institute Research Focuses on Gen Z Investors in a report dated May 2023, which examines attitudes, behaviors of investors ages 18 to 25, they find that despite their young age, a surprisingly large percentage of Gen Zs in the United States invest, with cryptocurrency as their top choice: Close to six in 10 (56 percent) report owning at least some investments. They primarily invest in cryptocurrency (55 percent) and individual stocks (41 percent). They are less likely than their older counterparts to use mutual funds and are more likely, along with millennials, to invest in crypto and non-fungible tokens compared with Gen Xers.
As a result, we believe that Bitcoin is poised to quickly become a part of the lives of a huge percentage of the developing world’s population. We project that this “global south” offers a large green field expansion opportunity for us because it combines high usage of physical currency with low median age and reduced access to quality banking and the legacy global financial system.
Growth Strategies
The Company is actively working to expand its geographic presence throughout the world, in particular in Latin America, by expanding our global Bitcoin ATMs and discussing with potential partners the service offerings that we are able to provide as the world continues to adopt the new digital financial system. By working to increase our geographic service area, including our planned expansion of operations in El Salvador, we aim to make Athena into a global financial services company that can connect the world’s cash to the world of crypto assets.
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See table below for our ATM breakdown by country and type, as of December 31, 2025.
ATMs BY COUNTRY AND TYPE
| Country | Number of Athena Bitcoin ATMs (as of December 31, 2025) |
Type of Fiat Currency | |
| Total | Two-Way | ||
| United States | 2,903* | - | U.S. Dollar |
| El Salvador | 27 | 24 | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| Total | 2,953 | 47 | |
*Excludes Chivo-branded ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service.
Also, the Company has developed and has started rolling out the Athena Bitcoin Affiliates Program which provides Bitcoin ATM operators with a turnkey solution, offering industry-leading 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. The material terms of the program include:
| · | Services Offered: Affiliates receive access to our proprietary Bitcoin ATM software platform (including regular updates and maintenance), compliance support (such as anti-money laundering (AML) and “know your customer” (KYC) procedures developed by the Company), cash management guidance (e.g. armored transport coordination and vaulting services), and marketing support to help drive customer traffic to their Bitcoin ATMs. | |
| · | Fee Structure: Affiliates are charged a monthly service fee, or they participate in a revenue share arrangement (a percentage of transaction revenues) with the Company in exchange for the above services. The exact terms may vary by affiliate contract, but generally the Company’s compensation is tied to the affiliate’s transaction volume (revenue-sharing) and/or fixed fees for software licensing and support. A portion of these fees are paid in Bitcoin and identified as Bitcoin received from independent Bitcoin ATM operators in the consolidated statements of cashflows included in the audited financial statements included in this Report. |
| · | Affiliate Obligations: Affiliates retain ownership of their Bitcoin ATMs but are required to adhere to our operational standards and compliance protocols. For example, Affiliates must implement the KYC/AML processes we provide and maintain their machines in accordance with the Company’s guidelines. This ensures a consistent and secure experience across the extended network of Bitcoin ATMs. | |
| · | Future Milestones: The Affiliates Program was launched in late 2024 (pilot phase) and fully rolled out in June 2025. A near-term milestone is to onboard additional Bitcoin ATM operators in key markets throughout 2026, which we believe will increase transaction volume and expand our brand presence without requiring significant capital expenditure by the Company. Our goal is to have a certain number of affiliate-operated Bitcoin ATMs live by the end of 2026. We also plan to evaluate the program’s progress by metrics such as the number of affiliate Bitcoin ATMs deployed, and the incremental revenue generated for the Company. No assurances can be made that we will be successful in achieving our goals with respect to future milestones. |
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Competition
We operate in a global and dynamic market and compete with a variety of organizations that offer services similar to those that we offer. We operate in a highly competitive industry with an increasing number of participants. Industries adjacent to the digital financial system are highly fragmented, quickly evolving, intensely competitive, and subject to growing regulatory scrutiny and oversight. The Bitcoin ATM industry is highly competitive. A number of companies offer products that are similar to our products and target the same markets as we do. Certain of our current and potential competitors have longer operating histories, greater financial, technical and marketing resources, and a larger installed customer base than we do. These competitors may be able to respond more quickly than we can to new or emerging technologies and changes in customer requirements, develop superior products, and devote greater resources to the development, promotion and sale of their products than we can.
There are several publicly traded companies that operate Bitcoin ATMs, including Bitcoin Depot Inc. and Bitcoin Well Inc.
Several private companies and wholly-owned subsidiaries of other publicly traded companies may be considered to be our competitors, including BitNational, Bitstop, Byte Federal, Inc., Cash2Bitcoin.com, Coin Hub, Coin Flip Bitcoin ATMs, Coinme, Instacoin, Moon Inc., dba LibertyX, a division of NCR Atleos Corporation, Localcoin, NationalBitcoin ATM, and RockItCoin, among others.
We face competition primarily from: (1) other Bitcoin ATM companies that provide competing services and products to customers, (2) online sellers and Bitcoin ATM operators that develop their own proprietary capabilities, and (3) other similar existing or developing technology providers that develop competing platforms for the purchase and sale of crypto-currency through ATMs, mobile apps or laptops / desktops.
Our primary competitors are US-based crypto-currency technology companies as discussed above.
Sales and Marketing
Our sales team focuses principally on maintaining relationships with our existing retail partners and developing new relationships with national, regional and local retail outlets such as gasoline stations, convenience stores and retail malls. The team is focused on marketing to these specific retail industry segments, which allows us to tailor our offering to the specific requirements of each retail partner. As of February 20, 2026, our sales and marketing teams consisted of 2 employees.
In addition to targeting new business opportunities, our sales team supports our business initiatives by building and maintaining relationships with new retail partners. We seek to identify growth opportunities within each account by analyzing the retailer’s sales at each of its locations and various demographic data to determine the best opportunities for the placement of new Bitcoin ATMs.
Our marketing team is focused on attracting users to our Bitcoin ATMs retail locations. Our marketing team primarily uses digital marketing tools to acquire and retain users but also deploys email, search engine optimization (SEO), and physical marketing presences as applicable. Our marketing team also supports the sales team in attracting new retail partners.
Intellectual Property, Patents and Trademarks
Although we believe our success depends upon our technical and marketing expertise more than our proprietary rights, our future success and ability to compete depend in part upon our proprietary technology. We have registered or filed applications for our primary trademarks. Most of our technology is not patented. Instead, we rely on a combination of contractual rights, copyrights, trademarks, and trade secrets to establish and protect our proprietary technology. We generally enter into confidentiality agreements with our employees, consultants, third-party contractors, and retail partners. Access to, and distribution of, our source code is restricted, and the disclosure and use of other proprietary information is further limited. Despite our efforts to protect our proprietary rights, unauthorized parties can attempt to copy or otherwise obtain or use our products or technology. We cannot be certain that the steps taken in this regard will be adequate to prevent misappropriation of our technology or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology in a manner that would avoid our intellectual property rights.
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Research and Development
We invest in ongoing research to develop new software solutions and services and enhance existing solutions with additional functionality and features required to ensure regulatory compliance. Product-specific enhancements are largely regulatory-driven and responsive to consumer input and challenges. We also continually evaluate and implement process improvements that expedite the delivery of new products, services and enhancements to our users. Associated costs are recorded in Selling, general and administrative expense on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and to date have not been material.
Our Retail Partners
In the U.S., we have contracts with over 3 thousand regional retailers, including gas stations, convenience stores, supermarkets and retail malls which represent approximately 3 thousand Bitcoin ATMs. Many of our contracts include auto-renewal features providing for additional one-year terms following the expiration of the initial term. Such contracts may be terminated at either party’s option by giving proper notice in accordance with the subject contract. The terms of our retail partner contracts vary because of negotiations at the time of execution.
Suppliers of our ATMs
In August 2021, we entered into an agreement to purchase 100 Bitcoin ATMs from Bitaccess, Inc. The agreement included a per transaction fee while the agreement was active. The machines are located in El Salvador of which 5 are Athena branded and 95 are Chivo branded machines. No additional Bitcoin ATMs have been purchased from Bitaccess, Inc. and there is no agreement to purchase additional Bitcoin ATMs. When Bitaccess, Inc. was acquired by another company, the change of ownership clause terminated the agreement along with the per transaction fee; as of December 31, 2025, the 100 Bitcoin ATMs, purchased from Bitaccess, Inc., are no longer active and are held in storage.
Agreement with Genesis Coin, Inc.
We currently do not have a written contract for purchase and sale of ATMs with Genesis Coin (currently operating under the name “BitcoinATM.com”). We have been operating based on our working relationship and the terms of the original purchase and sale contract with Genesis Coin, which we entered into on October 1, 2015 and terminated on September 12, 2024 as part of a confidential settlement agreement and release in a case captioned as Athena Bitcoin, Inc. v. Genesis Coin, Inc., Bitcoin ATM, LLC, ATM OPS, Inc., Kiosk Distributors, Inc., Andrew C. Barnard, Douglas O. Carrillo, and Neil Hernandez at the U.S. District Court for the Northern District of Illinois, Case No. 1:24-cv-5985.
On July 16, 2024, the Company, filed a Complaint against Genesis Coin, Inc., Bitcoin ATM, LLC, ATM OPS, Inc., Kiosk Distributors, Inc., Andrew C. Barnard, Douglas O. Carrillo, and Neil Hernandez, for damages for violation of a federal statute and other claims, filed at the U.S. District Court for the Northern District of Illinois (the “Court”). By September 12, 2024, the pertinent parties reached a settlement agreement and release where the complaint and other proceedings that were initiated at other forums were dismissed, and certain monetary and technological considerations were afforded between the parties.
Following the termination of our agreement with Genesis Coin on September 12, 2024, and the execution of the subsequent confidential settlement agreement, the Company no longer maintains any commercial or operational relationship with Genesis Coin. The termination resolved all outstanding obligations between the parties, and as of the date of this filing, we do not engage in any business transactions with Genesis Coin, do not utilize their software in our operations, and do not procure hardware or services from them.
In light of the contract termination, Genesis Coin had previously been a significant vendor, providing a majority of our Bitcoin ATMs and related software systems, the Company has since taken decisive steps to reduce and eliminate its dependency on Genesis Coin. Notably, we have:
| · | Successfully deployed our own proprietary ATM software platform which replaced Genesis Coin’s software across our fleet, | |
| · | Transitioned to using other ATM manufacturers and service providers for hardware procurement and support going forward, and | |
| · | Removed all reliance on Genesis Coin for technical support, software updates, or operational collaboration. |
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We no longer rely on Genesis Coin and any prior dependencies have been resolved through operational and technological changes made in 2024. The termination of the Genesis Coin relationship has not had a material adverse impact on our operations.
Agreements with Taproot Acquisition Enterprises, LLC
On April 13, 2023, Athena Bitcoin signed a sublease agreement with Taproot Acquisition Enterprises, LLC to acquire 800 Bitcoin ATM machines. The agreement had a term of three years unless terminated by either party subject to specified conditions and notifications. Lease payments under the agreement were based on revenue generated by the locations subject to a cap and allows Athena Bitcoin to buy out or purchase the Bitcoin ATM machines based on a formula that considers original cost, depreciation and market value of each unit.
On November 2, 2023, Athena Bitcoin modified and amended the sublease agreement into an equipment financing agreement with Taproot pursuant to which Athena Bitcoin agreed to purchase additional ATM machines in 2023 for a cash purchase price and certain revenue share payments. On December 31, 2023, Athena Bitcoin entered into another equipment financing agreement with Taproot for a purchase of additional Bitcoin ATMs subject to payment of the purchase price based on the specific payment dates, with the full balance due by December 31, 2024. Title to all Bitcoin ATM machines was transferred to Athena Bitcoin as of December 31, 2023, upon signing the second financing agreement. The first payment was made to Taproot in January 2024. The final payment was due by December 31, 2024. However, the payments of October 2024, November 2024 and December 2024 were rolled into a new Agreement dated September 19, 2024 (see below) along with the Agreements of April 13, 2023, the December 31, 2023 Agreement and the February 22, 2024 Agreement (see below).
On February 22, 2024, Athena Bitcoin entered into a third equipment financing agreement with Taproot for the purchase of additional Bitcoin ATMs. Title to the machines was transferred to Athena Bitcoin upon signing of the third financing agreement and required down payment which was paid on February 22, 2024.
On September 19, 2024, Athena Bitcoin and Taproot Acquisition Enterprises, LLC, a Delaware limited liability company, entered into that certain Omnibus Equipment Refinancing Agreement providing for the refinance of Athena Bitcoin’s outstanding payables.
On October 30, 2024, Athena Bitcoin entered into an Equipment Financing Agreement (the “Financing Agreement”) with Taproot, into an Equipment Financing Agreement (the “Agreement”) to purchase certain Bitcoin ATM kiosks (the “Equipment” units) listed in the 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 downpayment 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 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. 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 (see Short-term debt below).
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On September 4, 2025, Athena Bitcoin 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 $115.4 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.
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. |
During the twelve months ended December 31, 2025, 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 $4.6 million and $681 thousand of unamortized imputed interest, both of which are included in loss on extinguishment of debt expense in the consolidated statements of operations and comprehensive income (loss).
Agreements with PSBC, LLC
On June 19, 2024, Athena Bitcoin, Inc., the Company’s wholly-owned subsidiary, entered into a Development Services Agreement (the “Development Agreement”) with PSBC, LLC, a Delaware Limited Liability Company (“PSBC”), for a software platform to be used in connection with the operation of Bitcoin ATMs. The Company began using the software platform in June 2024. The payment obligation for the software platform shall be terminated when a fixed sum of payments has been achieved. These payments are based on a percentage of the Bitcoin ATM sales transactions for using the software platform. All payments shall be made in Bitcoin.
PSBC shall, as security for the payments, hold the software platform source code in an escrow account, which shall be released—along with infrastructure access for the software platform—to the Company when PSBC has received a designated metric. All rights, including new technology and intellectual property developed under the Agreement, are transferred to the Company. PSBC certifies independent creation of the software, non-infringement, and compliance with specifications and legal requirements. The Development Agreement includes customary indemnity clauses, confidentiality obligations, and a defined process for dispute resolution (including arbitration). In addition, the Development Agreement includes provisions for support services (for 12 months post-pilot) and detailed acceptance testing procedures.
On July 25, 2024, the Company amended the Development Agreement with PSBC, pursuant to which PSBC released infrastructure access for the software platform to the Company upon receiving a fixed payment amount, which was credited toward the payments for the software platform. The access to the software platform includes build instructions, build scripts, databases, and all other tools or documentation necessary or desirable to create a working software platform from the source code.
Should PSBC fail to provide the services required herein, such that doing so would interrupt the Company’s operations, then the Company would be granted unrestricted use of the source code. The released source code shall be updated on a regular basis and at the direction of the Company.
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Bitcoin ATM Operations and Cash Transportation
We contract with Move On Security LLC (of which Mr. Matias Goldenhörn, the Chief Executive Officer and director of the Company, has a 50% interest in Move On Security LLC) to support the various activities of our Bitcoin ATMs operations related to deployment, repairs and maintenance, and wireless communications (including traveling to various markets as needed).
We contract with Move On Tech Service, LLC (of which Mr. Matias Goldenhörn, the Chief Executive Officer and director of the Company, has a 50% interest in Move On Tech Services LLC) to provide Bitcoin ATM services for the Company’s Bitcoin ATM operations in various states. Move On Tech Service, LLC is responsible for Bitcoin ATM management, periodic Bitcoin ATM maintenance, installation, and deinstallation.
A significant operational aspect of our business involves collecting physical fiat currencies from our Bitcoin ATM fleet and getting them safely deposited into our bank account. The collection and deposit of the physical currencies received in our Bitcoin ATMs is a multi-step process. We do not directly handle the currency operations. This function is contracted to bonded security companies that have armored vehicles and cash storage vaults in many locations and includes multiple national and regional carriers such as Brinks International, Garda World, Thillens, Loomis, New Century Armored Logistics (NCAL) and Move On Security LLC as well as Proteccion de Valores, S.A. de C.V. (PROVAL) and Servicio Salvadoreño de Protección, S. A. de C. V.(SERSAPROSA) in El Salvador.
For logistic efficiency, it is impractical to retrieve cash from one machine and go directly to a bank branch. Rather the cash from all our machines in a city is collected by contracted armored vehicle companies on a periodic basis and brought to their regional centers where it is counted, inventoried, and grouped with cash coming from our ATMs in other cities.
We actively oversee this process in conjunction with our cash logistics contractors to adjust for factors like three-day weekends and unanticipated surges. While we can manage the Bitcoin side of our business with real-time tracking, the current time period from retrieving cash from our Bitcoin ATMs to having the funds available in our bank account is about three-to-seven (3-7) days. This time period directly impacts our working capital and our ability to buy more Bitcoin; thus, we strive to keep it as short as possible.
Just as shortages of Bitcoin can temporarily prevent us from selling Bitcoin to our customers, our Bitcoin ATMs running out of cash or becoming fully loaded with cash (and unable to take more bills) can impede our users from completing certain transactions until our cash logistics contractors fixed the issue at their next visit to our Bitcoin ATMs. Our business has variable demand, and it is unavoidable that some machines will at times run out of cash or become fully loaded with cash (and unable to take more bills) for a time period.
Bitcoin ATM Transactions
We hold an amount of Bitcoin in a hot wallet that we own and send Bitcoin to users from that wallet when transactions are completed at Bitcoin ATMs. We replenish our hot wallet from time to time through open market purchases of Bitcoin with certain liquidity providers. When a customer buys Bitcoin from us, the purchase price is based on the spot price of Bitcoin at the time of the user’s transaction. When a user sells Bitcoin to us, such Bitcoin is held in an Athena hot wallet for a period of time, which could be up to several days, until such Bitcoin is later sold through a liquidity provider to fund operations or is resold to users transacting at Bitcoin ATM kiosks; however, the volume of transactions of this type are de minimis.
We do not custody Bitcoin for our kiosk users. Our relationship with our primary liquidity provider allows us to purchase Bitcoin to quickly replenish amounts sold to users, which means that we hold relatively small amounts of Bitcoin for customer sales at any given time. Due to the minimal amount of Bitcoin held at any given time (typically 5 to 7 Bitcoin) in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users, coupled with our high transaction volumes, we do not store Bitcoin in cold wallets.
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The Company has a standard service agreement with BitGo Trust Company, Inc. (“BitGo”) (a qualified custodian) a third party custodian of the private keys for the wallets related to Bitcoin owned by the Company, who has been engaged to secure our digital assets. BitGo manages the private keys for digital wallets holding Bitcoin owned exclusively by the Company (i.e., held for our own account). All Bitcoin held as inventory, or held for operational liquidity by the Company, is secured by BitGo, which manages the corresponding private keys on our behalf. BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions.
Environmental Impact
El Salvador’s Bitcoin plan has put a spotlight on the environmental impact of cryptocurrency with the World Bank flagging such potential adverse effects among its concerns. Mining digital currency requires large amounts of energy, and the Bitcoin industry’s global CO2 emissions have risen to an equivalent of 85.89 million tons of Co2 during the 2020 to 2021 period, equal to burning 84 billion pounds of coal, according to a 2023 report by the American Geophysical Union (referred to in the article by Sanaz Chamanara, S. Arman Ghaffarizadeh, & Madani, K. (2023), The Environmental Footprint of Bitcoin Mining Across the Globe). President Bukele sought to counter sustainability concerns by engaging state-owned geothermal electric company, LaGeo SA de CV to offer Bitcoin mining facilities using renewable energy from the country’s volcanoes.
Marketing
Our marketing consists of:
| · | Trade shows, | |
| · | Digital advertising on search engines, map sites, and industry-specific platforms, | |
| · | Social media, and | |
| · | SMS messaging. |
Athena Bitcoin also maintains country-specific websites that include information about how to access our service offerings as well as country-specific disclosures.
Software Development Including Technology Research and Intellectual Property Development
Our intellectual property (“IP”) includes proprietary algorithms that we have developed. Some effort is devoted to automating a majority of our crypto purchases in a manner that helps us match supply with anticipated demand. In addition, we have invested in building automated systems for customer onboarding including the collection of required KYC documentation as well as government transaction reporting.
Athena has not filed for protection of our algorithms and maintains them as private and proprietary business information. The IP we use for the security of our Bitcoin ATMs and transaction integrity is mostly provided by vendors, although we have added additional layers and extra private security measures that are unique to the Company.
Athena Bitcoin has previously registered both its name and distinctive owl logo with the United States Patent and Trademark Office. On December 18, 2024, the Company renewed the registration of its name and logo.
Recent Events
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.
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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 agreed to pay PSBC, LLC, $50 thousand per month beginning on May 14, 2025, and each month thereafter through November 14, 2025.
As discussed above, on September 4, 2025, the Company entered into a Release and Termination Agreement with Taproot Acquisition Enterprises, LLC, a Delaware limited liability company, and its affiliated entities 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.
Competition
There are many different companies that enable people and businesses to buy or sell Bitcoin and other crypto assets, including other operators of Bitcoin ATM networks, online services and exchanges such as Coinbase and Gemini, and payment services such as Square and PayPal.
Our direct competition in the U.S. includes Bitcoin Depot, Inc. a public corporation with operations in the U.S. and Canada, Coinflip, a private company with operations in the U.S., Canada and Australia and other smaller bitcoin kiosk operators, as well as Coinstar, a major corporation that runs one of the largest kiosk networks in the U.S. Coinstar is an existing operator of kiosks at major grocery chains that are used to exchange coinage for a variety of payment instruments such as gift cards and in-store vouchers. In recent years, they have added the ability to use physical coins and cash bills to buy Bitcoin on many of their kiosks, in partnership with Coinme. The other Bitcoin ATM network operators use machines similar to the Company’s fleet of Bitcoin ATMs.
The financial performance of any Bitcoin ATM network is influenced by several factors. We believe that site selection and branding have the biggest effect on per-Bitcoin ATM transaction volumes. Bitcoin Depot is a public corporation whose operating performance can be measured. We are not aware of the operating performance of other competitors as they are private companies and do not provide any public financial disclosures. From our years of experience in this industry, we believe the Company’s Bitcoin ATMs perform at or above industry averages.
While there are many other Bitcoin ATM operators, we believe the industry is nascent and that worldwide tens of thousands of attractive locations remain untouched. While we recognize that there is a terminal limit to the number of Bitcoin ATMs that the U.S. market can support, we believe that that limit has not yet been reached and is expanding as Bitcoin and other crypto assets gain more widespread use, especially in Latin America and other regions. According to The Business Research Company, ATM Global Market Report 2025, published December 2025, where it was cited that the total number of active ATMs ranges between 520,000 and 540,000.1
Per a Knowledge Sourcing Intelligence LLP report titled Crypto ATM Market Global Forecasts Report 2025-2030: Rising Cryptocurrency Adoption and Expanding Installations Across Hospitality and Retail Sectors, in November 2025, the global crypto ATM market size is projected to increase from $191.130 million in 2025 to $1.20 billion in 2030, with a 44.54% CAGR.
Below is a partial list of Worldwide Bitcoin ATM networks3 networks (other than Athena Bitcoin) as of February 15, 2026 from coinatmradar.com:
| Company Name | Units |
| Bitcoin Depot Inc. | 9,150 |
| Coinflip | 5,679 |
| Bitstop | 2,751 |
| RockitCoin | 2,522 |
| Localcoin | 2,120 |
| CoinHub | 1,965 |
| Byte Federal | 1,300 |
| Unbank | 665 |
| Cash2Bitcoin | 631 |
We have a small percentage of the total market, operating approximately 10% of Bitcoin ATMs according to coinradar.
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1 ATM Global Market Report 2025, The Business Research Company. https://www.thebusinessresearchcompany.com/report/atm-global-market-report#:~:text=For%20instance%2C%20in%20September%202023,growth%20of%20the%20ATM%20industry
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Apps like Robinhood, PayPal, and Cash App offer customers a way to purchase crypto assets using their smartphones and funds from their bank accounts. These apps offer competitive pricing relative to our Bitcoin ATMs; however, they do not accept physical currency and typically require users to connect their bank accounts. They also typically do not allow users access to the private keys of the cryptocurrency, thus resulting in centralization which we believe many users do not want.
Full-service exchanges like Coinbase Pro, Gemini, and Kraken allow traders to make investments in a wide variety of crypto assets. These exchanges cater to active traders and the most highly price sensitive consumers. The Company often uses such services for purchasing its crypto assets. Users from this segment of the overall market rarely overlap with the Bitcoin ATM industry.
Competitive Advantages
We believe we enjoy several competitive advantages. We believe our foremost advantage is our many years of business experience combined with our insight into optimizing many interrelated factors and aspects of the crypto business. We believe that this combination ultimately drives our bottom-line profits.
We believe that site selection is a substantial factor in our overall performance. Our site selection methodology is a trade secret of our business. We believe that our methodology is not easily uncovered as we have ATMs located in rural, urban, and suburban areas. We have learned and refined our site selection methodology over the years, and we believe our expertise in this area constitutes a material competitive advantage.
We believe operational efficiency is in the same category of importance to us as site selection. Our operational efficiencies included developing and implementing several proprietary approaches to manage our operations efficiently with respect to all aspects of crypto transactions, risk management, and efficient cash handling spanning five countries.
Unlike many competitors that focus on quickly installing dozens or hundreds of Bitcoin ATMs, we prioritized working to obtain profitability on a global scale with a small base of Bitcoin ATMs that were installed in strategic sites. From 2017 through 2022, we focused on developing and putting in place scalable systems and methods for managing a diverse global operation. This gave us a foundation to not only provide us with profitable operations (during that period) but also the foundation to continue to grow. As a result of this strategy, we were able to increase our total ATMs in service from 60 to 2,953 from 2017 to December 2025, respectively, with the ability to install hundreds of Bitcoin ATMs at scale. When comparing Bitcoin ATMs to other methods of transacting, the primary advantage of a Bitcoin ATM is its ability to complete a transaction from accepting payment to delivering crypto assets quickly. The Bitcoin ATM will only accept physical Fiat Currency, which is an immediate and permanent form of payment. This subsequently facilitates the immediate delivery of crypto assets; also, an immediate and permanent form of transaction. Apps and services that rely on ACH or other bank mechanisms for the fiat leg of a transaction often cannot deliver the crypto assets quickly because the funding mechanism is neither immediate nor permanent.
We believe our branding gives us a competitive advantage with many store owners. Large companies often have access to capital, but many have minimal to no experience in the crypto industry. Companies that want to start a Bitcoin ATM network tomorrow can copy our offerings and hire top branding specialists, but what they cannot do is create a brand that has roots to the early years of Bitcoin and Bitcoin ATMs. In our experience, many of these large companies are treated with skepticism by many users of Bitcoin, as they represent centralized and institutionalized interests that many believe are contrary to the goals of Bitcoin. The bright orange on our Athena Bitcoin ATMs is the same color as the orange in the original Bitcoin logo, helping our brand stand out and represent the spirit and essence of Bitcoin and the entire crypto industry in any stores where our Bitcoin ATMs are placed.
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While the end result of a transaction on one Bitcoin ATM versus another may be similar, we believe that many store owners and customers looking for a Bitcoin ATM will often prefer an Athena Bitcoin ATM versus, for example, a multipurpose Coinstar machine that can handle your loose change and also sell you Bitcoin. We believe our branding and brand authenticity have been a contributing factor to getting good performing sites, and that it will continue to be a big contributor to our expected future growth.
Competitive Disadvantages
Our competitive disadvantages are that some of our competitors still have greater resources available to deploy new Bitcoin ATMs, develop new markets, and invest in technology. We intend to raise capital several times in the coming years, through debt or the sale of equity, which may be dilutive to existing stockholders, to expand our network, but we remain focused on keeping true to our core principles and will continue to focus on bottom line performance and maintain our standards of effective site selection and monitoring.
Employees
We strive to foster a productive and engaging work environment. Our talent strategy is aligned with our business vision and platform strategy. We hire intelligent people with a passion for crypto assets and the possibilities to empower our customers to achieve their financial and transactional goals.
As of February 20, 2026, we employed 18 people within the United States, and 47 people in our foreign subsidiaries. We also engage temporary consultants; as of February 20, 2026, 12 consultants were engaged throughout the Company and its subsidiaries, of which 10 consultants were engaged in the United States and the remaining 2 consultants were engaged in Latin America. The employees in El Salvador are primarily responsible for customer support of the Bitcoin ATMs, the Chivo wallet and the Chivo POS terminals in El Salvador.
Seasonality and Inflation
We have typically experienced seasonality in the 4th quarter of the calendar year in our revenue and the related cost of cryptocurrency. We believe this trend is attributable to less business days in the quarter as a result of public holidays. Our cost of goods, services and labor and third-party services have been impacted by the recent high inflationary environment. To date, we have been successful in managing these inflationary cost increases through pricing, productivity and cost-cutting initiatives. There can be no assurance that our operating results will not continue to be affected by inflation in the future or that we will be successful in managing such cost increases.
Governmental Regulation
Currently, we operate in the U.S., El Salvador, Argentina, Colombia and Mexico in a complex and rapidly evolving regulatory environment and are subject to a wide range of laws, rules and regulations enacted by federal, state, territorial, local governments and regulatory authorities. At a high-level, this evolving regulatory environment currently is characterized by a heightened focus by regulators on the cryptocurrency industry and countering terrorist financing and anti-money laundering. The scope of laws, rules, and regulations that can impact our business, including many laws, rules, and regulations that were enacted prior to the creation of the digital financial system, are expansive and include certain of the requirements that apply to financial services, money transmission, privacy protection, cybersecurity, electronic payments, and securities and commodities regulation, as well as bespoke cryptocurrency laws that have been adopted in some jurisdictions. Notwithstanding the applicability of the above-described regulatory framework, currently we are not supervised or examined by any banking, securities or commodities regulator such as the Office of the Comptroller of the Currency, the Office of the Superintendent of Financial Institutions, the SEC, or the Commodity Futures Trading Commission.
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We monitor changes to the regulatory environment closely and invest significant resources in our legal and compliance teams to ensure that we are able to design and maintain appropriate compliance systems and practices. However, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the digital financial system and related industries, require us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that regulators may disagree with our conclusions. New or changing laws and regulations, including changes to their interpretation or implementation, as well as our failure to appreciate that the laws and regulations apply to our business could have a material adverse impact on our business, results of operations, and financial condition.
We regularly monitor official SEC releases and comments made by senior SEC officials, including the sitting Chairman, regarding the regulation of cryptocurrencies and related activities. Based on such statements, historical enforcement actions and existing regulations and laws, we have made the determination that our activities and the cryptocurrencies that we currently sell, which consists of only Bitcoin, do not subject us to SEC regulation (other than in connection with our status as a public company) and thus we believe we are not required to be registered with the SEC to support transactions which consist of only Bitcoin at our Bitcoin ATMs. We have previously provided products and services related to Litecoin, Ethereum, Bitcoin Cash and Tether; however, based on a risk-based determination made after consideration of public statements by the SEC, historical enforcement actions, and existing regulations and laws in effect at the time, we limited our activities to Bitcoin only.
Anti-money laundering and counter-terrorist financing
We are subject to various anti-money laundering and counter terrorist financing laws, including the Bank Secrecy Act (“BSA”) in the U.S. As a money services business registered with the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), the BSA requires us to develop, implement, and maintain a risk-based anti-money laundering program, provide an anti-money laundering-related training program, report suspicious activities and transactions, comply with certain reporting and recordkeeping requirements, and collect and maintain information about our users. In addition, the BSA requires us to comply with certain user due diligence requirements as part of our anti-money laundering obligations, including developing risk-based policies, procedures, and internal controls reasonably designed to verify each user’s identity. We have implemented a compliance program designed to prevent our kiosks, products and services from being used to facilitate money laundering, terrorist financing, and other illicit activity in countries, or with persons or entities, included on designated lists issued by the OFAC, and equivalent foreign authorities. Our compliance program includes policies, procedures, reporting protocols, training and internal controls, and is designed to address legal and regulatory requirements as well as to assist us in managing business risks associated with money laundering and terrorist financing.
Money transmission and virtual currency business activity
In the U.S., we have obtained licenses to operate as a money transmitter, or the equivalent, in the states where we understand such licenses or equivalent are required to conduct our business. As a licensed money transmitter, we are subject to a range of legal obligations and requirements including bonding, net worth maintenance, customer notice and disclosure, reporting and recordkeeping requirements, and obligations that apply to the safeguarding of third-party funds and crypto assets. In addition, the licensed entity within our corporate structure is subject to inspection and examination by the state licensing agencies and certain actions involving that entity, such as changes in controlling equity holders, board members, and senior management, may require regulatory approval.
Privacy and protection of user data
We are subject to a number of laws, rules, directives, and regulations relating to the collection, use, retention, security, processing, and transfer of personally identifiable information about our users and employees in the jurisdictions where we operate. We are subject to privacy and information safeguarding requirements under the Gramm-Leach-Bliley Act and the California Consumer Privacy Act in the U.S., which impose certain privacy protections and require the maintenance of a written, comprehensive information security program.
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Our business relies on the processing of personal data in many jurisdictions and the movement of data across state and national borders. As a result, much of the personal data that we process, which may include certain financial information associated with individuals, is regulated by multiple privacy and data protection laws and, in some cases, the privacy and data protection laws of multiple jurisdictions. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries, and other parties with which we have commercial relationships.
Regulatory scrutiny of privacy, data protection, cybersecurity practices, and the processing of personal data is increasing in the U.S. and around the world. Regulatory authorities are continuously considering numerous new legislative and regulatory proposals and interpretive guidelines that may contain additional privacy and data protection obligations. Any expansion or changes in the application of these privacy, data protection and cybersecurity laws or other regulatory requirements could increase our compliance costs and have a material adverse impact on our business, results of operations, and financial condition.
Consumer protection
The U.S. Federal Trade Commission (‘FTC”), the Consumer Financial Protection Bureau (“CFPB”), and other U.S. federal, state, and local and foreign regulatory agencies regulate business activities, including money transfer services related to remittance or user-to-user transfers. These agencies, as well as certain other governmental bodies, including state attorneys general, have broad consumer protection mandates and discretion in enforcing consumer protection laws, including matters related to unfair or deceptive, and, in the case of the CFPB, abusive, acts or practices, or Unfair, deceptive, or abusive acts and practices (“UDAAPs”), and they promulgate, interpret, and enforce rules and regulations that affect our business. The CFPB has enforcement authority to prevent an entity that offers or provides financial services or products to consumers in the United States from committing or engaging in UDAAPs, including the ability to engage in joint investigations with other agencies, issue subpoenas and civil investigative demands, conduct hearings and adjudication proceedings, commence a civil action, grant relief (e.g., limit activities or functions; rescission of contracts), and refer matters for criminal proceedings.
Federal Regulation
Certain federal agencies and representatives have introduced or have pending legislation regarding cryptocurrency, digital or virtual currency. We cannot be sure of the impact such pending or future legislation might have on our results of operations or financial condition, or the probability that such bills will be entered into law. We continue to monitor the status of pending legislation.
The Company is subject to regulation by the United States, “FinCEN as a money services business. This regulation was established in 2013 when FinCEN released interpretive guidance to “clarify the applicability of the regulations implementing the Bank Secrecy Act (“BSA”) to person creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies” (FIN-2013-G001). Since that time, all businesses that deal in crypto assets in the manner of the Company must register as a Money Service Business (“MSB”) with FinCEN and comply with the requirements of the BSA, the Patriot Act, and other amendments and administrative guidance issued by FinCEN and the Department of the Treasury.
We are subject to various anti-money laundering and counter-terrorist financing laws, including the BSA in the United States, and similar laws and regulations abroad. In the United States, as a money services business registered with FinCEN, the BSA requires us to among other things, develop, implement, and maintain a risk-based anti-money laundering program, provide an anti-money laundering-related training program, report suspicious activities and transactions to FinCEN, comply with certain reporting and recordkeeping requirements, and collect and maintain information about our customers. In addition, the BSA requires us to comply with certain customer due diligence requirements as part of our anti-money laundering obligations, including developing risk-based policies, procedures, and internal controls reasonably designed to verify a customer’s identity. Many states and other countries impose similar and, in some cases, more stringent requirements related to anti-money laundering and counter-terrorist financing. We have implemented a compliance program designed to prevent our platform from being used to facilitate money laundering, terrorist financing, and other illicit activity in countries, or with persons or entities, included on designated lists promulgated by Office of Foreign Assets Control (“OFAC”) and equivalent foreign authorities. Our compliance program includes policies, procedures, reporting protocols, and internal controls, and is designed to address legal and regulatory requirements as well as to assist us in managing risks associated with money laundering and terrorist financing. Anti-money laundering regulations are constantly evolving and vary from jurisdiction-to-jurisdiction. We continuously monitor our compliance with anti-money laundering and counter-terrorist financing regulations and industry standards and implement policies, procedures, and controls in light of the most current legal requirements.
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Athena Bitcoin is registered with FinCEN and has registration number 31000207507771. In addition, Athena Bitcoin has appointed Sam Nazzaro as its Chief Compliance Officer, written and distributed a BSA Compliance Policy, and engages an outside review firm to perform an annual review of its Compliance Policy.
Under the U.S. Commodities Exchange Act of 1936, the Commodity Futures Trading Commission (“CFTC”) has broad enforcement authority to police market manipulation and fraud in spot commodity markets, including the spot crypto markets.
The Securities and Exchange Commission has broad regulatory and enforcement authority over intermediaries transacting in crypto assets, to the extent those crypto assets meet the criteria to be considered to constitute securities (see also “Risk Factors”).
FinCEN has issued a notice of proposed rulemaking to see public comments on a proposal to require banks and money service businesses to submit reports, keep records, and verify the identity of customers in relation to transactions involving convertible virtual currency (“CVS”) or digital assets with legal tender status (“LTDA”) held in unhosted wallets (as defined below), or held in wallets hosted in a jurisdiction identified by FinCEN. FinCEN is proposing to adopt these requirements pursuant to the BSA. To effectuate certain of these proposed requirements, FinCEN proposes to prescribe by regulation that CVC and LTDA are “monetary instruments” for purposes of the BSA. However, FinCEN is not proposing to modify the regulatory definition of “monetary instruments” or otherwise alter existing BSA regulatory requirements applicable to “monetary instruments” in FinCEN’s regulations, including the existing currency transaction reporting (“CTR”) requirement and the existing transportation of currency or monetary instruments reporting requirement.
On February 25, 2025, the Crypto ATM Fraud Prevention Act was introduced by Senator Dick Durbin (D-IL), proposing significant regulatory changes that could materially adversely impact our operations. If enacted, the bill would impose new customer transaction limits, fee caps, refund requirements, and additional compliance measures for cryptocurrency kiosk operators. The bill defines “new customers” as individuals who have signed up within the past 14 days and imposes a transaction limit of $2,000 per day and $10,000 in total transactions during that period. Specifically, operators would be required to issue full refunds for transactions conducted by new customers within the first 14 days of signing up, with refund requests allowed up to 30 days after the transaction. For existing customers, fee refunds would be required if requested within 30 days. The bill also mandates verbal confirmation for transactions exceeding $500, which may introduce operational challenges and increased processing times. We are unable to predict whether or not the proposed legislation will be passed into law (or even if it will be voted upon).
International Regulations
Outside of the United States, the countries where the Company operates are members of an array of regional Anti-Money-Laundering (“AML”) treaty organizations. Specifically, Argentina and Colombia are signatories to the Financial Action Task Force of Latin America (“GAFILAT”). Argentina is also a member of Financial Action Task Force (“FATF”). El Salvador is a member of Caribbean Financial Action Task Force (“CFATF”). The United States is a member of both FATF and Asia/Pacific Group on Money Laundering (“APG”). These relationships, both overlapping and non-overlapping, result in legal interpretations, regulation, and enforcement that is heterogeneous. In each of these jurisdictions, membership in one or more AML treaty organizations can influence the specific documentation, record keeping, and financial limits placed on MSB, or dealers in crypto assets.
State Regulations
Depending on the state where the Company places a Bitcoin ATM, there are local laws and regulations which the Company must comply with to operate legally. These laws usually require the Company to register with a state agency, provide a surety bond, and make regular reports about its activities in the state and its financial health.
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In some jurisdictions, the Company may be required to obtain operating permits from the city or county. These typically involve the payment of registration fees.
California
As expanded upon below, California passed certain legislation over the past year which limited our ability to operate effectively in that state. As a result, the Company has significantly reduced its footprint of kiosks in the state of California. However, we continue to evaluate the regulatory environment and our ability to comply with new regulations and reinstate operations there.
On November 20, 2023, the California Department of Financial Protection and Innovation (“DFPI”) issued an invitation for comments on a potential rulemaking relating to two new California laws that impose sweeping obligations on companies engaged in virtual currency activities in California and with California residents. The first law, Assembly Bill 39, prohibits people from engaging in digital financial asset business activity – or holding themselves out as being able to engage in digital financial asset business activity – without meeting certain criteria and obtaining a license from the DFPI, including compliance obligations and stable coin approvals among other guidelines. The second, Senate Bill 401, imposes requirements on operators of digital financial asset transaction kiosks. The DFPI refers to the two bills collectively as the Digital Financial Assets Law (“DFAL”). The DFAL took effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2026.
Requirements applicable to digital financial asset kiosks
The State Senate Bill 401 supplements the DFAL by prohibiting an operator of a digital financial asset kiosk from accepting or dispensing more than $1,000 a day from, or to, a customer through a kiosk. Further, this law requires operators to provide certain written disclosures to a customer before the digital financial asset transaction takes place, including disclosure of terms and conditions of the transaction, whether the operator provides a method to reverse or refund a transaction (including any warnings if such transaction is final and cannot be reversed), the amount of the digital financial asset involved, and the amount of fees and other charges in U.S. Dollars, among other disclosures. The operators will also be required to provide customers with detailed transaction disclosures, including the crypto amount, dollar amount, and fees charged thus customers must receive receipts containing vital transaction details, including the information of the licensed exchange used to calculate the price spread.
The law includes various customer protections and prohibits an operator from charging fees that exceed the greater of $5.00 or 15% of the U.S. Dollar equivalent of the digital financial assets involved in the transaction based on the market price of that same asset quoted by a licensed digital financial asset exchange. Under the new law, operators must maintain an up-to-date list of kiosk locations.
There is no private right of action under the DFAL except under a narrow exception related to a covered person’s obligation to hold digital financial assets on behalf of California residents pursuant to the state Uniform Commercial Code.
Impact of DFAL on digital assets regulation
The enactment of the new laws is significant as it pushes California to the forefront of the digital asset regulatory landscape with other states that have enacted similar requirements.
Moreover, in light of the acknowledgment from California Governor Newsom that certain aspects of the laws are ambiguous, as well as the legal complexity of engaging in digital assets activities throughout the United States, we expect further refinement of the DFAL requirements as the DFPI introduces regulations or guidance to supplement the law.
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The Company has tested its procedures in its kiosks in the state of California and believes that they are fully compliant with the requirements of DFAL. See also “Risk Factors”.
Effective as of January 1, 2025, the DFAL requires a kiosk operator to: (a) limit the charges that may be collected from a customer, such that they may not collect direct or indirect charges from a customer related to a single digital financial asset transaction that exceeds the greater of (x) $5, or (y) 15% of the U.S. Dollar equivalent of digital financial assets involved in the transaction, and (b) provide written disclosures to a customer prior to completing a transaction, that includes the following certain minimum information.
Effective as of January 1, 2024, pursuant to the Digital Financial Assets Law of California, operators of digital financial asset transaction kiosks in California are required to 1) provide to the Department of Financial Protection and Innovation of California (“DFPI”) a list of all locations of kiosks that the operator owns, operates or manages in California and to provide the DFPI with any updates to these locations within 30 days of any change; 2) abide by transaction limits of $1,000 in a day from a customer via kiosk; and 3) provide customers with receipts that include certain information regarding the transaction.
Connecticut
On October 1, 2024, the Connecticut Act Concerning Digital Assets became effective in Connecticut, placing heavy regulatory, process and compliance burdens on our operations in the state. This bill allows the banking commissioner to adopt regulations, forms and orders governing the business use of digital assets by entities that, and individuals, who are under his regulatory jurisdiction (e.g. state-chartered banks and credit unions). The regulations, forms, and orders must ensure consumer protection and the commissioner may consult with federal and other states’ financial services regulators, other stakeholders, and industry professionals to ensure that digital assets receive, to the extent practicable, consistent treatment. Further, the bill created a transaction limit of $2,500 for new customers and a $5,000 transaction limit for existing customers and capped fees for all transactions at 15%.
The bill also imposes several disclosures and receipt requirements on virtual currency kiosk owners and operators. It further requires them to allow customers to cancel and receive a full refund for a virtual currency transaction within seventy-two hours after the new customer registered as a customer of such owner or operator if, not later than thirty days after the last virtual currency transaction that occurred during such seventy-two-hour period. Lastly, the bill allows the banking commissioner to establish a schedule of maximum fees that an owner or operator of a virtual currency kiosk may charge for specific services.
Minnesota
On August 1, 2024, the Minnesota Act Regulating Disclosures and Consumer Protections Related to Virtual-Currency Kiosks became effective, which placed additional compliance burdens on our operations and increased the risk of deterring consumers or decreasing market confidence in cryptocurrency. This bill requires virtual currency kiosk operators to (1) disclosure to consumers the relevant terms and conditions of the transactions; (2) issue full refunds for transactions made within seventy two hours of becoming a new customer if fraudulently induced to engage in virtual currency transactions and is reported within 14 days of the last transaction during the seventy two hour window and the customer contacts the virtual currency kiosk operator and a government or law enforcement agency informing of them of the fraudulent nature of the transaction; and (3) set maximum daily transaction limits of $2,000 for new customers. The disclosures on material risks must be made to customers before entering into the virtual currency transaction and must include at least certain enumerated risks.
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Nebraska
In September 2025, LB 609 took effect in Nebraska. The law establishes a transaction limit of $2,000 for new customers (defined as individuals within 14 days of signing up), while existing customers will be permitted to transact up to $10,500 per day. Additionally, LB 609 imposes an 18% fee cap on transactions and requires operators to issue full refunds for transactions conducted by new customers within their first 14 days of registration, with refund requests permitted up to 90 days after the transaction.
Vermont
On May 10, 2024, the Vermont Act Relating to Banking, Insurance and Securities was signed into law. This act imposes a daily transaction limit of $1,000, a fee cap of 3% on transactions and a one year moratorium (beginning at the end of June 2024) on the installation of any new kiosks in the state. Effective July 1, 2025, these limits were raised to $2,000 for new customers and $5,000 for existing customers and raised the maximum fee to the greater of $5 or 15% of the transaction value, with a moratorium on new installations extended to July 1, 2026. This has limited our ability to grow sales, transaction volumes and our consumer base in the state.
Additional regulatory developments
Various regulatory authorities continue to evaluate and implement laws, rules and regulations governing a wide variety of issues, including cryptocurrencies, identity theft, account management guidelines, disclosure rules, cybersecurity, marketing, environmental, social and governance performance, transparency, and reporting, including requirements related to overall corporate environmental, social and governance disclosures and climate-related financial disclosures which may impact our business. For an additional discussion on the impact of governmental regulation on our business, please see “Risk Factors” included in this Annual Report on Form 10-K.
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Item 1A. Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, operating results, financial condition, and future prospects could be materially and adversely affected. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
A summary of risk factors relating to the Company and our securities follows:
Risks Related to Our Business, Operations, and Financial Position
| · | Dependence on Transaction Volume and Volatility: Our revenue relies heavily on crypto transaction volumes, which fluctuate with volatile crypto prices. Declines in prices or volume, as well as failures of major market participants, could materially harm results and investor confidence. | |
| · | Forecasting Challenges: Operating in a new, rapidly evolving crypto product market makes forecasting demand, volume, and performance difficult. | |
| · | Indebtedness: We carry significant debt secured by most assets, with restrictive covenants that limit flexibility. We may lack sufficient cash flow to meet obligations, and raising additional capital may be difficult, forcing operational changes or, in extreme cases, closure. | |
| · | Asset and Private Key Security: Our cash and crypto assets face risks of theft or loss, especially from compromised private keys. Hacks, breaches, or key loss could cause major financial, regulatory, and reputational damage. Insurance coverage is limited. | |
| · | Operational Disruptions: Failures in ATMs, software, information technology (IT), or blockchain networks could reduce users, harm our brand, and negatively affect results. Retaining and growing users is critical to our success. | |
| · | International Risks: Operations in El Salvador and elsewhere create risks from political or economic instability, enforcement issues, and restrictions on asset ownership. Our role in El Salvador’s Bitcoin Law and Chivo wallet carries custody and government-related risks. | |
| · | Economic and Market Confidence: Weak global or regional economies and negative sentiment toward crypto could reduce demand for our services. | |
| · | Intellectual Property: Inability to protect our IP or defend against infringement claims could disrupt operations. |
Risks Related to the Bitcoin Network, Crypto Assets, and Blockchain Technology
| · | Crypto Nature and Private Keys: Control depends solely on private keys, which carry theft and loss risks. | |
| · | Development and Acceptance: Future growth and adoption of Bitcoin, crypto assets, and blockchain protocols are uncertain; if they stall, our business could suffer. Stablecoins may not retain value. | |
| · | Forks and Technical Issues: Blockchain forks or integration challenges could create instability and harm operations. | |
| · | Transaction Fees: High miner or validator fees increase costs and reduce margins. |
Risks Related to Regulation, Legal Compliance, and Enforcement
| · | Regulatory Uncertainty: Crypto laws and regulations are rapidly changing. Reclassification of assets as securities, forfeiture actions, or banking restrictions could harm our business. | |
| · | Licensing and Registration: Failure to secure required licenses or comply with AML, privacy, and other laws could halt operations or result in penalties. | |
| · | Government Intervention: Crypto use may be restricted or banned by governments, limiting our ability to operate. |
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Risks Related to Employees and Service Providers
| · | Key Personnel: Loss of senior management or inability to attract talent could hurt performance. | |
| · | Misconduct: Employee or service provider errors or misconduct could damage financials and reputation. | |
| · | Conflicts of Interest: Interests in other crypto projects by insiders could create conflicts affecting our business. |
Risks Associated with Governing Documents and Nevada Law
| · | Change of Control Limits: Provisions in our charter, bylaws, and Nevada law may deter takeovers, affecting stock value. |
Risks Related to Our Securities
| · | No Market / Volatility: Our stock lacks a trading market and may face volatility unrelated to performance. | |
| · | Insider Control: Founders and major shareholders hold significant control, influencing shareholder decisions. | |
| · | Dilution: Future equity raises, if any, may dilute shareholders. | |
| · | Stock Price Volatility: Prices may remain volatile and decline significantly. |
Implications of Being an Emerging Growth Company and Smaller Reporting Company
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until December 31, 2030, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any December 31 before that time or, if we have total annual gross revenue of $1.235 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Additionally, even if we no longer qualify as an emerging growth company, as long as we are neither a “large accelerated filer” nor an “accelerated filer,” we would not be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our securities less attractive because we may rely on these exemptions, which could result in a less active trading market for our securities and increased volatility in the price of our securities.
Finally, we are a “smaller reporting company” (and may continue to qualify as such even after we no longer qualify as an emerging growth company) and accordingly may provide less public disclosure than larger public companies, including the inclusion of only two years of audited financial statements and only two years of management’s discussion and analysis of financial condition and results of operations disclosure. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
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The Most Material Risks Related to Our Business and Financial Position
We might require additional capital to support business growth, and this capital might not be available on favorable terms, if at all.
We have funded our operations since inception primarily through debt and revenue generated by our operations. While we believe that our existing cash and cash equivalents and availability under our debt financing agreements are sufficient to meet our working capital needs and planned capital expenditures, and to service our debt, there is no guarantee that this will continue to be true in the future. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments in our business to respond to business opportunities and challenges, including developing new products and services, enhancing our operating infrastructure, expanding our non-U.S. operations, and acquiring complementary businesses and technologies, all of which may require us to secure additional funds. In the future, we may also require additional capital due to refinancing needs, regulatory surety bond requirements, or unforeseen circumstances and may decide to engage in equity, equity-linked or debt financings, or enter into additional debt financing agreements for any of the foregoing reasons. We may not be able to secure any such additional financing on terms favorable to us, in a timely manner, or at all.
The trading prices for our common stock may be highly volatile, which may reduce our ability to access capital on favorable terms or at all. In addition, a slowdown or other sustained adverse downturn in the general economic or digital asset markets could adversely affect our business and the value of our common stock. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of the common stock and diluting their interests. Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.
Our total revenue is substantially dependent on the volume of transactions conducted by our customers. If such volume declines, our business, operating results, and financial position would be adversely affected.
We generate substantially all our revenue from the sale of crypto assets to our customers, either using our Bitcoin ATMs or over the phone. Revenue is based on the prices that we charge our customers based on prevailing market prices. This revenue may fluctuate based on the price of crypto assets. As such, any declines in the volume of transactions, the price of crypto assets, or market liquidity for crypto assets generally may result in lower total revenue to us.
The price of crypto assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant volatility. The price and trading volume of any crypto asset is subject to significant uncertainty and volatility, depending on several factors, including:
| · | market conditions across all elements of the crypto-economy; | |
| · | our business is in a relatively new consumer product segment, which is difficult to forecast; | |
| · | our operating results may fluctuate due to the highly volatile nature of crypto; | |
| · | changes in liquidity, market-making volume, and trading activities; | |
| · | trading activities on other crypto platforms worldwide, many of which may be unregulated, and may include manipulative activities; | |
| · | investment and trading activities of highly active retail and institutional users, speculators, miners, and investors; | |
| · | the speed and rate at which crypto assets and specifically Bitcoin can gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all; | |
| · | decreased user and investor confidence in crypto assets and associated exchanges and service providers; | |
| · | negative publicity and events relating to Bitcoin, blockchain technology, or the digital currency economy as a whole; |
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| · | unpredictable social media coverage or “trending” of Bitcoin or other crypto assets; | |
| · | the ability for crypto assets to meet user and investor demands; | |
| · | consumer preferences and perceived utility and value of crypto assets and associated markets; | |
| · | increased competition from other payment services or other crypto assets that exhibit better speed, security, scalability, or other characteristics; | |
| · | regulatory or legislative changes and updates affecting the use, storage, ownership, exchange, or any other aspect of the crypto-economy; | |
| · | the characterization of crypto assets under the laws of various jurisdictions around the world; | |
| · | the maintenance, troubleshooting, and development of the blockchain networks underlying crypto assets, including by miners, validators, and developers worldwide; | |
| · | the ability for protocol networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently; | |
| · | ongoing technological viability and security of protocols and their associated crypto assets, smart contracts, applications, and networks, including vulnerabilities against hacks and scalability; | |
| · | fees and speed associated with processing blockchain transactions, including on the underlying protocol networks and on exchanges and other platforms for trading; | |
| · | financial strength of wholesale market participants; | |
| · | the availability and cost of funding and capital; | |
| · | the liquidity of over-the-counter trading desks, market-makers, exchanges, and other wholesale dealers of crypto assets; | |
| · | interruptions in service from or failures of major crypto exchanges and platforms; | |
| · | availability of banking and payment services to support crypto-related projects; | |
| · | global level of interest rates and inflation; | |
| · | monetary policies of governments, trade restrictions, and Fiat Currency valuation changes; and | |
| · | national and international economic and political conditions. |
There is no assurance that any supported crypto asset will maintain its value or that there will be meaningful levels of interest from customers. If the demand for purchasing or selling crypto assets declines, our business, operating results, and financial condition would be adversely affected.
The prices of Bitcoin and other crypto assets are volatile.
We generate substantially all our revenue from the sale of crypto assets to our customers, either using our Bitcoin ATMs or over the phone. Revenue is based on the prices that we charge our customers based on prevailing market prices. The price at which we are able to purchase crypto assets prior to selling those same crypto assets may not be lower than the sale price if the market conditions change between those two points in time. The value of the entirety of our crypto assets held could be lost if the prices of those crypto assets were to significantly decrease, which would adversely affect our operating results. There are no assurances that the crypto assets we hold will have value from one day to the next and we could suffer a loss if any of the prices of those crypto assets declines or is permanently depressed.
Bitcoin has experienced significant price volatility in recent months, with sharp and unpredictable swings in valuation that can materially affect investment outcomes. In late 2025 and early 2026, Bitcoin’s price has fluctuated widely, at times dropping from near record highs of over $126,000 to levels around $60,000, followed by abrupt rebounds and multi-day swings of 5% or more. This heightened volatility reflects broader market sell-offs, divergence in macroeconomic expectations, leveraged trading dynamics, and rapid shifts in sentiment rather than fundamentals alone.
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Our transaction volume may be partially dependent on the prices of Bitcoin we sell, which can be volatile. If such prices decline, the volume of user transactions could decrease and our business, operating results, and financial condition would be adversely affected.
We generate substantially all of our revenue from the cash paid by customers to purchase Bitcoin from our ATMs. The number of user transactions and our transaction volumes may be partially dependent on the prices of Bitcoin, as well as the associated demand for buying, selling and trading Bitcoin, which can be and historically have been volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease. As such, any such declines, or any declines in the price of Bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us. The price and trading volume of any cryptocurrency, including Bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, including:
| · | market conditions of, and overall sentiment towards, cryptocurrency; | |
| · | changes in liquidity, market-making volume, and trading activities; | |
| · | trading activities in cryptocurrency, including on other cryptocurrency platforms worldwide, many of which may be unregulated, and may include manipulative activities; | |
| · | investment and trading activities of highly active retail and institutional users, speculators, miners, and investors; | |
| · | the speed and rate at which cryptocurrency is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all; | |
| · | changes in user and investor confidence in cryptocurrency and cryptocurrency platforms; | |
| · | negative publicity and events relating to the digital financial system; | |
| · | unpredictable social media coverage or “trending” of, or other rumors and market speculation regarding cryptocurrency; | |
| · | the ability for cryptocurrency to meet user and investor demands; | |
| · | the functionality and utility of cryptocurrency and its associated ecosystems and networks, including cryptocurrency designed for use in various applications; | |
| · | retail user preferences and perceived value of cryptocurrency and cryptocurrency markets; | |
| · | increased competition from other payment services or cryptocurrency for which we do not sell that exhibit better speed, security, scalability, or other characteristics; | |
| · | regulatory or legislative changes and updates affecting the digital financial system; | |
| · | the characterization of cryptocurrency under the laws of various jurisdictions around the world; | |
| · | the adoption of unfavorable taxation policies on cryptocurrency investments by governmental entities; | |
| · | the maintenance, troubleshooting, and development of the blockchain networks underlying cryptocurrency, including by miners, validators, and the development community; | |
| · | the ability for cryptocurrency networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently; | |
| · | legal and regulatory changes affecting the operations of miners and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory requirements as a result of growing environmental concerns around the use of energy in mining cryptocurrency, including Bitcoin, and other proof-of-work mining activities; | |
| · | ongoing technological viability and security of cryptocurrency and its associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability; |
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| · | fees and speed associated with processing cryptocurrency transactions, including on the underlying blockchain networks and on cryptocurrency platforms; | |
| · | financial strength of market participants; | |
| · | the availability and cost of funding and capital; | |
| · | interruptions in service from or failures of major cryptocurrency platforms; | |
| · | availability of an active derivatives market for various cryptocurrencies; | |
| · | availability of banking and payment services to support cryptocurrency-related projects; | |
| · | level of interest rates and inflation; | |
| · | monetary policies of governments, trade restrictions, and Fiat Currency devaluations; and | |
| · | national, North American and international economic and political conditions. |
There is no assurance that any given cryptocurrency will maintain or increase in value or that there will be meaningful transaction volumes from our users. In the event that the price or trading of, or demand for, cryptocurrency declines, our business, operating results, and financial condition would be adversely affected.
Bankruptcies of major crypto asset market participants have impacted the broader crypto economy.
The failure of several prominent crypto trading venues and lending platforms, such as FTX, Celsius Networks and Voyager has impacted and may continue to affect the broader cryptoeconomy. The full extent of these impacts may not yet be known but may include, the consequent and ongoing financial distress and bankruptcy of certain crypto market participants, loss of confidence in the broader cryptoeconomy, reputational harm to crypto asset platforms generally, increased negative publicity of the broader cryptoeconomy, heightened scrutiny by regulators and lawmakers and calls for increased regulation of crypto assets and crypto asset platforms. We have not experienced a material direct impact to our business, financial condition, customers or counterparties from these bankruptcies; however, these bankruptcies did cause a change to crypto market prices, crypto market volatility, crypto market volume and customer sentiment, and each of these drivers do indirectly impact our business and our revenue potential. A combination of such drivers could have been a contributing factor in a decrease in transaction volume that the Company experienced after these bankruptcies. We do not have any known material financial exposure to other cryptoeconomy participants that faced insolvency and liquidity issues, experienced excessive redemptions or suspended redemptions or withdrawals of crypto assets, allegedly mishandled customer funds, or experienced significant corporate compliance failures in connection with these bankruptcies.
Our business is in a new consumer product segment, which is difficult to forecast.
Our industry segment is new and is constantly evolving. As a result, there is a lack of available information with which to forecast industry trends or patterns. There is no assurance that sustainable industry trends or preferences will develop that will lead to predictable growth or earnings forecasts for individual companies or the industry segment. We are also unable to determine what impact future governmental regulation may have on trends and preferences or patterns within our industry segment. See “Risk Factors Related to Current and Future Regulations and other Law Enforcement Actions” for a discussion of the risks associated with governmental regulation.
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We have a significant level of indebtedness that may have an adverse impact on us.
As of December 31, 2025, our total indebtedness, excluding lease liabilities, was $21.3 million including, $4.0 million of short-term notes payable, and $327 thousand of insurance financing debt. Our significant level of indebtedness could have important consequences for us, including the following:
| · | requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations and future business opportunities; | |
| · | restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; | |
| · | limiting our ability to obtain additional equity or debt financing for general corporate purposes, acquisitions, investments, capital expenditures or other strategic purposes; | |
| · | limiting our ability to adjust to changing business conditions and placing us at a competitive disadvantage to our less highly leveraged competitors; and | |
| · | making us more vulnerable to general economic downturns and adverse developments in our business. |
The above factors could limit our financial and operational flexibility and, as a result, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, if our debt obligation is not repaid prior to its respective maturity date, it will go into default which could cause you to lose a portion or all of your investment in the Company.
The future development and growth of crypto assets and protocols is subject to a variety of factors that are difficult to predict and evaluate. If the future does not develop and grow as we expect, our business, operating results, and financial condition could be adversely affected.
Blockchain technology was only introduced in 2008 and remains in the early stages of development. In addition, different protocols are designed for different purposes. Bitcoin, for instance, was designed to serve as a peer-to-peer electronic cash system, while Ethereum was designed to be a smart contract and decentralized application platform. Many other protocol networks—ranging from cloud computing to tokenized securities networks—have only recently been established. The further growth and development of any crypto assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of crypto assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:
| · | Many protocol networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective tokens and underlying blockchain networks, any of which could adversely affect their respective usefulness. | |
| · | Many networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective crypto networks. | |
| · | Several large networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues. If these issues are not successfully addressed, or are unable to receive widespread adoption, it could adversely affect the underlying crypto asset. | |
| · | Security issues, bugs, and software errors have been identified with many protocols and their underlying blockchain networks, some of which have been exploited by malicious actors. There are also inherent security weaknesses in some crypto assets and their networks and protocols, such as when creators of certain crypto networks use procedures that could allow hackers to counterfeit tokens. Any weaknesses identified with a protocol, token or blockchain could adversely affect its price, security, liquidity, and adoption. If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the compute or staking power on a crypto network, as has happened in the past, it may be able to manipulate transactions, which could cause financial losses to holders, damage the network’s reputation and security, and adversely affect its value. |
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| · | The development of new technology for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks, lead to increased liquid supply of the crypto asset token, and reduce its price and attractiveness. | |
| · | If rewards and transaction fees for miners or validators on any protocol network are not sufficiently high to attract and retain miners, a network’s security and speed may be adversely affected, increasing the likelihood of a malicious attack. | |
| · | The governance of many decentralized blockchain networks is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any crypto network, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network’s utility and ability to respond to challenges and grow. | |
| · | Many crypto networks are in the early stages of developing partnerships and collaborations, all of which may not succeed and adversely affect the usability and adoption of the respective crypto asset token. | |
| · | Various other technical issues have also been uncovered from time to time that resulted in disabled functionalities, exposure of certain users’ personal information, theft of users’ assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user, and development communities. If any such risks or other risks materialize, and if they are not resolved, the development and growth of crypto assets, blockchain technology, or Bitcoin may be significantly affected and, as a result, our business, operating results, and financial condition could be adversely affected. |
Loss of a banking relationship could adversely impact our business, operating results, and financial condition.
Athena depends on having regular and normalized access to a bank checking account for normal business purposes and also for taking deposits of the cash received from the ATM fleet. As a money services business registered with the Financial Crimes Enforcement Network (“FinCEN”) under the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and its implementing regulations enforced by FinCEN, our banking partners view us as a higher risk customer for purposes of their anti-money laundering programs. We may face difficulty establishing or maintaining banking relationships due to our banking partners’ policies and some prior bank partners have terminated their relationship with Athena. The loss of these banking partners or the imposition of operational restrictions by these banking partners and the inability for us to utilize other redundant financial institutions may result in a disruption of business activity as well as regulatory risks. In addition, financial institutions in the United States and globally may, because of the myriads of regulations or the perceived risks of crypto assets, decide to not provide accounts, payments, or other financial services to us. Such events could negatively affect an investment in our common stock.
We may be unable to generate sufficient cash to service all of our indebtedness and financial commitments.
Our ability to make scheduled payments on or to refinance our indebtedness and financial commitments depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions including financial, business and other factors beyond our control. We may be unable to generate sufficient cash flow to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund debt and other obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure our indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to service our debt would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. If we face substantial liquidity problems, we might be required to sell assets to meet debt and other obligations. Our debt restricts our ability to dispose of assets and dictates our use of the proceeds from such disposition.
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We may not be able to consummate dispositions, and the proceeds of any such disposition may be inadequate to meet obligations. We may be unable to access adequate funding as a result of a decrease in lender commitments due to an unwillingness or inability on the part of lending counterparties to meet their funding obligations and the inability of other lenders to provide additional funding to cover a defaulting lender’s portion. As a result, we may be unable to execute our plan of operations, make acquisitions or otherwise conduct operations, which would have a material adverse effect on our financial condition and results of operations.
The Company may be forced to cease operations.
It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the inability by the Company, whether in the United States or globally, to obtain clients, the failure of commercial relationships, the failure of development of the necessary technical environment, the failure of government actors to provide needed regulatory clarity, the failure of technology development by third parties, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve, either in whole or part, or take actions that result in a dissolution event. During the past six years there have been several rumors that regulation specifically aimed at terminating the practice of selling crypto assets via kiosks, such as the Company’s fleet of Bitcoin ATMs, would be forthcoming. While the regulations hypothesized by these rumors have never been enacted, the state of California recently enacted the law (“DFAL”) regulating digital assets and restricting operations of financial assets kiosks (see “Business—Governmental Regulation— State Regulation” of this Report), it remains a risk to the Company’s principal operations and could be detrimental to an investment in the Company’s common stock. The DFAL began taking effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2025.
Other Risk Factors Related to Our Business Operations and Financial Position
Currently, there is a small use of Bitcoin in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in our common stock.
Bitcoin and the Bitcoin Network have only recently become accepted as a means of payment for goods and services by certain major retail and commercial outlets, and the use of Bitcoin by consumers to pay such retail and commercial outlets remains limited. Conversely, a significant portion of Bitcoin demand is generated by speculators and investors seeking to profit from the short- or long-term holding of Bitcoin. A lack of expansion by Bitcoin or other crypto assets into retail and commercial markets, or a contraction of such use, may result in decreased demand for the Company’s services or increased demand for services the Company is not able to provide, either of which could adversely affect an investment in our common stock.
The Company’s assets could be stolen and would be difficult to recover due to the nature of cash and crypto assets.
It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the inability by the Company, whether in the United States or globally, to obtain clients, the failure of commercial relationships, the failure of development of the necessary technical environment, the failure of government actors to provide needed regulatory clarity, the failure of technology development by third parties, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve, either in whole or part, or take actions that result in a dissolution event. During the past six years there have been several rumors that regulation specifically aimed at terminating the practice of selling crypto assets via kiosks, such as the Company’s fleet of Bitcoin ATMs, would be forthcoming. While the regulations hypothesized by these rumors have never been enacted, the state of California recently enacted the law (“DFAL”) regulating digital assets and restricting operations of financial assets kiosks (see “Business—Governmental Regulation— State Regulation” of this Report), it remains a risk to the Company’s principal operations and could be detrimental to an investment in the Company’s common stock. The DFAL began taking effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2025.
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Crypto assets and funds that the Company holds on Bitcoin exchanges could be lost, stolen, or otherwise impaired.
From time to time and for customary reasons of procuring Bitcoin on crypto exchanges. The Company uses Kraken as its primary crypto exchange. The Company carefully selects the platforms that it chooses to do business with; however this may not be sufficient to avoid losses if those exchanges suffer losses or other impairments. In 2018, Quadriga filed for bankruptcy protection following the death of its Chief Executive Officer and subsequent discovery of its insolvency. In addition, several other well-known and highly regarded exchanges have suffered similar fates. For example, in February 2014, Mt. Gox, then the largest bitcoin exchange worldwide, filed for bankruptcy protection in Japan after an estimated 700,000 bitcoin were stolen from its wallets. In May 2019, Binance, one of the world’s largest exchanges was hacked, resulting in losses of approximately $40 million. Neither of these incidents had any impact on the Company. Any such losses by an exchange could have a negative impact on the financial position of the Company and adversely impact an investment in our common stock.
The Company may not always maintain sufficient crypto assets to satisfy customer transaction requests, which could adversely affect its business and results of operations.
The Company relies on proprietary tools and analytics, together with management’s judgment, to monitor its crypto asset holdings and determine the level of crypto assets it believes is necessary to support anticipated customer transactions. If these tools, analytics, or judgments indicate that the Company’s holdings are insufficient, the Company seeks to acquire additional crypto assets from liquidity providers. There have been limited instances prior to fiscal year 2023, each lasting less than 24 hours, in which the Company did not maintain adequate levels of crypto assets to permit customer transactions, and during such periods no customer transactions were processed. Although the Company subsequently acquired additional crypto assets and resumed transaction processing, any future failure to maintain sufficient levels of crypto assets could impair the Company’s ability to satisfy customer demand, result in lost revenue, and negatively impact the Company’s business, financial condition, and results of operations.
The theft, loss, or destruction of private keys required to access any Bitcoin may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any bitcoin, it could cause regulatory scrutiny, reputational harm, and other losses.
Bitcoin is generally accessible only by the possessor of the unique private key relating to the digital wallet in which the Bitcoin is held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private to prevent a third party from accessing the Bitcoin held in the applicable wallet. To the extent that any of the private keys relating to our wallets containing Bitcoin held for our own account or our users’ private keys relating to their un-hosted wallets is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we or our users will be unable to access the Bitcoin held in the related wallet. Further, we cannot provide assurance that our or our users’ wallets will not be hacked or otherwise compromised. Cryptocurrency and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or any hack or other compromise of, digital wallets used to store our users’ Bitcoin could adversely affect our users’ ability to access or sell their Bitcoin, as well as result in loss of user trust in us. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. However, the Company does not (i) custody Bitcoin purchased by customers, (ii) manage or have access to private keys belonging to customers’ personal (un-hosted) wallets, or (iii) hold private keys for users. Customers are solely responsible for their own wallets and private keys. When a customer uses an Athena Bitcoin ATM to purchase Bitcoin, the Bitcoin is directly delivered to a wallet address provided by the user (typically a mobile wallet app). These user wallets are “un-hosted” or self-custodied, meaning the users alone control their private keys.
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The risk of loss or compromise of private keys related to Bitcoin owned by the Company is mitigated by our use of a third-party custodian, BitGo Trust Company, Inc. (a qualified custodian) who has been engaged to secure our digital assets. BitGo manages the private keys for digital wallets holding Bitcoin owned exclusively by the Company (i.e., held for our own account). This means all Bitcoin held as inventory, or held for operational liquidity by the Company, is secured by BitGo, which manages the corresponding private keys on our behalf. If these keys were lost or compromised, BitGo’s protocols, including secure backups and recovery processes, would mitigate this risk.
BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions. By entrusting this function to BitGo, we add a layer of security and risk mitigation (given BitGo’s expertise and insurance arrangements) beyond what could be achieved with in-house custody.
The Company has a standard service agreement with BitGo under which BitGo safeguards the private keys and crypto assets that the Company deposits with it. BitGo’s custodial accounts are segregated and secure, and BitGo carries insurance policies that may cover certain losses (providing an additional layer of protection to the Company). BitGo has and maintains insurance policies for custodial services through Lloyd’s of London who provides crime insurance coverage with a limit of $5.0 million and specie insurance coverage with a limit of $250 million. The specie insurance aims to cover the permanent loss of cryptocurrency from its designated blockchain address if an insured event occurs. However, this coverage has significant exclusions, such as theft or dishonesty by key company insiders (like major shareholders or directors, unless they are specifically designated custodians), losses from trading or loan defaults, and issues arising from improperly secured or lost private keys (like those stored on internet-connected devices). It also doesn’t cover cryptocurrency network failures or losses not reported promptly, nor does it apply to broader events like war, terrorism, or money laundering.
The crime insurance component addresses risks like employee theft, losses of property at BitGo’s premises or during transit, and fraud committed by third parties through computer systems or fund transfers, including related legal expenses. Exclusions under this part include fraud by directors with significant ownership (with some exceptions if they’re treated as regular employees), losses from employees known to be previously dishonest, and losses of potential income or trade secrets. It also won’t cover issues like accounting errors, mechanical failures, the cryptocurrency’s underlying protocol failing, or broader events like war.
BitGo is a qualified custodian regulated by the South Dakota Division of Banking, which provides assurance that our custodied assets are held in a compliant manner.
Any significant disruption in our ATMs or software, information technology systems, or any of the blockchain networks related to our business, could result in a loss of users or funds and adversely impact our brand and reputation and our business, operating results, and financial condition.
Our reputation and ability to attract and retain users and grow our business depends on our ability to operate our products and services at high levels of reliability, scalability, and performance, including the ability to process and monitor, on a daily basis, the transactions that occur across multiple systems. Our ATMs and software, the ability of our users to transact in Bitcoin, and our ability to operate at a high level, are dependent on our ability to access the blockchain networks underlying the supported Bitcoin, for which access is dependent on our systems’ ability to access the internet. Further, the successful and continued operations of such blockchain networks will depend on a network of computers, miners, or validators, and their continued operations, all of which may be impacted by service interruptions.
Our ATMs and certain cryptocurrency and blockchain networks have experienced from time to time, and may experience in the future, service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. In addition, extraordinary transactions or site usage could cause our kiosks to operate at an unacceptably slow speed or even fail.
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If any of our ATMs are disrupted for any reason, our products and services may fail, resulting in unanticipated disruptions, slower response times and delays in our users’ transaction execution and processing, failed transactions, incomplete or inaccurate accounting, recording or processing of transactions, unauthorized transactions, loss of user information, increased demand on limited user support resources, user claims, complaints with regulatory organizations, lawsuits, or enforcement actions. A prolonged interruption in the availability or reduction in the availability, speed, or functionality of our products and services could harm our business. Significant or persistent interruptions in our services could cause current or potential users to believe that our ATMs or software are unreliable, leading them to switch to our competitors or to avoid or reduce the use of our products and services, and could permanently harm our reputation and brands. Moreover, to the extent that any system failure or similar event results in damages to our users, these users could seek significant compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. Problems with the reliability or security of our ATMs or software could cause damage to our reputation and the cost of resolving these problems could negatively affect our business, operating results, and financial condition.
Because we are a regulated money services business in certain jurisdictions, interruptions have resulted and in the future may result in regulatory scrutiny, and significant or persistent interruptions could lead to significant fines and penalties, and mandatory and costly changes to our business practices, and ultimately could cause us to lose existing licenses or banking and other relationships that we need to operate or prevent or delay us from obtaining additional authorizations, registrations or licenses that may be required for our business.
In addition, we are continually improving and upgrading our information systems and technologies. We also rely on technologies developed by others, and if we are unable to continue to obtain licenses for such technologies or licenses to substitute for similar technologies, our business could be adversely impacted. Implementation of new systems and technologies is complex, expensive, time-consuming, and may not be successful. If we fail to timely and successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies, or if such systems and technologies do not operate as intended, it could have an adverse impact on our business, internal controls (including internal controls over financial reporting), operating results, and financial condition.
The Company does not insure against all potential losses, which could result in significant financial exposure. Additionally, our lack of insurance protection for crypto assets held by the Company could adversely impact our business, operating results, and financial condition.
The Company does not have commercial insurance or third-party indemnities to fully cover all operational risks or potential liability in the event of a significant incident or series of incidents causing catastrophic loss. As a result, the Company is, to a substantial extent, self-insured for such events. The Company relies on existing liquidity, financial resources and borrowing capacity to meet short-term obligations that would arise from such an event or series of events. The occurrence of a significant incident, series of events, or unforeseen liability for which the Company is self-insured, not fully insured or for which insurance recovery is significantly delayed could have a material adverse effect on the Company’s results of operations or financial condition.
Additionally, the crypto assets held by us are not insured. We also do not rely on insurance carriers to insure losses resulting from a breach of our physical security, cyber security, or by employee or service provider theft since we do not carry crime insurance. We only maintain a general liability insurance which does not cover crypto assets or breaches described above. Therefore, we may suffer a loss which is not covered by insurance in damages. Such a loss could cause a substantial business disruption of our operations, adverse reputational impact, inability to compete with our competitors, regulatory scrutiny, and consequently, it could adversely impact an investment in our shares of common stock.
The Company operates in locations outside of the United States and, as such, is subject to additional risks with respect to enforcement of its contractual rights.
We currently operate and intend to grow our operations in a number of jurisdictions outside of the United States. Laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses, or our failure to adapt our practices, systems, processes, and business models effectively to the traveler and supplier preferences (as well as the regulatory and tax landscapes) of each country into which we expand, could impede our ability to enter into, negotiate or enforce contracts in those markets. In addition to the other risks described in this Report, our company’s international operations would be subject to numerous other risks, including, but not limited to, weaker enforcement of our company’s contractual rights, longer payment cycles, and difficulties in collecting accounts receivable.
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The countries we operate in, may or may not have stable economies, stable banking sectors, or stable governments which may or may not permit us to repatriate profits, maintain ownership of our business or its assets, or continue operations.
From time to time, certain governments have seized foreign companies, their assets, and/or their operations. It is possible for us to face significant losses if such an event occurs, either specific to us or broadly across the entire country or industry in which we operate. We may, for example no longer be permitted to purchase additional crypto assets, or operate our machines, or return capital or profits to our parent company in the United States. This may result in a total and complete loss of our assets within that country as well as further costs to continue to pay our existing liabilities within that country.
If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products and services, our business, operating results, and financial condition may be significantly harmed.
Our success depends on our ability to retain existing users and attract new users to increase engagement with our products and services. To do so, we must continue to offer leading technologies and ensure that our products and services are secure, reliable, and engaging. We must also expand our products and services and offer competitive transaction and other fees in an increasingly crowded and price-sensitive market. There is no assurance that we will be able to continue to do so, that we will be able to retain our current users or attract new users, or keep our users engaged. Any number of factors can negatively affect user retention, growth, and engagement, including if:
| · | we fail to increase awareness of our brand and successfully compete with the offerings and prices of other companies, or if our users otherwise increasingly engage with competing products and services, including those that we are unable to offer due to regulatory reasons; | |
| · | we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received; | |
| · | we fail to successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our business; | |
| · | we fail to support new and in-demand cryptocurrencies or if we elect to support cryptocurrencies with negative reputations; | |
| · | there are changes in sentiment about the quality or usefulness of our products and services or concerns related to privacy, security, or other factors including, without limitation, changes in macro-level user preference for using cash to purchase Bitcoin; | |
| · | there are adverse changes in our products and services that are mandated by legislation, regulatory authorities, or litigation; | |
| · | we fail to maintain existing authorizations as well as obtain newly required authorizations, registrations and licenses for our products; | |
| · | users perceiving Bitcoin and other cryptocurrencies to be a bad investment, or experiencing significant losses in Bitcoin or other cryptocurrencies, may not desire to utilize our products and services; | |
| · | technical or other problems prevent us from delivering our products and services with the speed, functionality, security and reliability that our users expect, or if we fail to otherwise gain and maintain the trust and confidence of our users; | |
| · | there are cybersecurity incidents, employee or service provider misconduct or other unforeseen activities that cause losses to us or our users; | |
| · | there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell bitcoin to users or the separate flat transaction fee that we are able to charge our users, or modifications by competitors to their fee models; | |
| · | we fail to provide adequate customer service for our users and retail partners; | |
| · | regulatory and governmental bodies in countries that we target for expansion express negative views towards cryptocurrency-related services and, more broadly, the digital financial system; or | |
| · | we or other companies in our industry are the subject of adverse media reports or other negative publicity. |
From time to time, certain of these factors have negatively affected user retention, growth, and engagement to varying degrees. If we are unable to maintain or increase our user base and user engagement, our revenue and financial results may be adversely affected. Any decrease in user retention, growth, or engagement could render our products and services less attractive to users, which may have an adverse impact on our revenue, business, operating results, and financial condition. If our user growth rate slows or declines, we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive growth of revenue.
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Adverse economic conditions may affect our business.
Our performance is subject to general economic conditions, and their impact on the digital currency markets and our customers. The United States and other international economies have experienced cyclical downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. The impact of general economic conditions on the Company is highly uncertain and dependent on a variety of factors, including global adoption of cryptocurrencies, central bank monetary policies, and other events beyond our control. Geopolitical developments, such as trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility of global financial and digital currency markets. To the extent that conditions in the general economic and digital currency markets materially deteriorate, our ability to attract and retain customers may suffer.
Due to unfamiliarity and some negative publicity associated with cryptocurrency-related businesses, existing and potential users may lose confidence in cryptocurrency-related products and services, which could negatively affect our business.
Cryptocurrency and related products and services are relatively new. Many of our competitors are unlicensed, unregulated, operate without supervision by any governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. As a result, users and the general public may lose confidence in cryptocurrency businesses, including regulated businesses like ours.
Since the inception of the digital financial system, numerous cryptocurrency businesses have been sued, investigated, or shut down due to fraud, manipulative practices, business failure, and security breaches. In many of these instances, customers of these businesses were not compensated or made whole for their losses. Larger businesses, like us, are more appealing targets for hackers and malware and may also be more likely to be targets of regulatory enforcement actions. For example, in May 2019, Binance, one of the world’s largest platforms, was hacked, resulting in losses of approximately $40 million, and in February 2021, Bitfinex settled a long-running legal dispute with the State of New York related to Bitfinex’s alleged misuse of over $800 million of customer assets. Further, in the first half of 2022, major cryptocurrency lending platforms declared bankruptcy, resulting in a loss of confidence in participants of the digital financial system and negative publicity surrounding cryptocurrency more broadly.
Risk Factors Related to Our Operations in El Salvador
Expansion of business operations in El Salvador may not produce the positive results as planned.
We have established significant operations in El Salvador. However, there are many factors that could disrupt the implementation of Bitcoin Law in El Salvador, and as a result, our operations in El Salvador. Any of such disruptions can have a negative impact on the financial position of the Company. They could jeopardize our expansion plan and be detrimental to our business. 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.
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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.
Our operations in El Salvador are subject to the following additional risks:
| · | Exposure to Bitcoin volatility. While Bitcoin can be used as a speculative asset to generate significant gains, it can also generate major losses. Bitcoin pricing has fluctuated from $16,500 on December 31, 2022 to $42,000 on December 31, 2023 to $93,429 on December 31, 2024 to $87,711 on December 31, 2025, with more recent trading as of the date of this Report being around $60,000-$70,000. Holding or transacting in such an unstable asset is particularly risky for people with low incomes, who can ill afford to sustain price swings as large as 30% in a single day and may become victims of a significant collapse. If there was a significant reduction in the fair value of Bitcoin, the reduction of value of Bitcoin held in the El Salvadoran national reserves could be a destabilizing event for the country and could impact the existing Bitcoin Law. 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. |
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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. | ||
| · | Depletion of banking assets. In today’s El Salvador, banks connect savers and borrowers. If most Salvadorans start using Bitcoin, their savings will be stored in digital wallets away from potential borrowers who would otherwise use it to fund projects. Massive adoption of Bitcoin could drain banks of savings and raise the cost of borrowing for companies and individuals, who would face higher interest rates. If that occurs, the economy of El Salvador and implementation of the Bitcoin Law could be negatively affected. | |
| · | Lack of transparency/money laundering. Internationally, the cryptocurrency has been used for money laundering and to facilitate illegal activities. The intergovernmental Financial Action Task Force (“FATF”) may increase monitoring of El Salvadoran banks, businesses, and other financial institutions. The FATF is the international “money laundering and terrorist financing watchdog.” It reviews countries’ anti-money laundering and counter-financing terrorism practices. If the FATF determines that a country is exposed to financial crime, the flagged country is placed on either the list of “Jurisdictions under Increased Monitoring,” known as the “grey list,” or the list of “Jurisdictions subject to a Call for Action,” known as the “black list.” When a country is placed on the grey list, it must cooperate with increased FATF monitoring. When a country is placed on the black list, the FATF urges its 39 member nations and over 200 affiliated nations to apply enhanced due diligence and impose countermeasures, such as sanctions. From an FATF regulatory perspective, El Salvador has been in full compliance, however, that may likely change after the Bitcoin Law has been fully implemented. For example, the FATF mandates that the parties engaging in virtual-asset transactions provide complete and sufficient know-your-customer information. It also requires that senders and recipients of virtual assets obtain accurate knowledge and information about “the transaction, the source of funds, and the relationship with the counterparty.” The chances of Bitcoin transactions meeting such requirements are unlikely and El Salvador may be subject to sanctions. Please note that six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company’s operations. |
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| · | Loss of central bank reserves. El Salvador currently carries a large debt burden (approximately 87.9% of GDP as of April 2025 according to the International Monetary Fund (“IMF”)) and has a challenging amortization schedule. To navigate this difficult fiscal environment during the pandemic, El Salvador reached out to the IMF and was approved for a 40-month arrangement under the Extended Fund Facility for El Salvador, with access to $1.4 billion and an immediate disbursement of $113 million. The IMF stipulated that the arrangement is expected to catalyze additional multilateral financial support, for a combined overall financing package of over US$3.5 billion over the program period. The IMF also declared that “the potential risks of the Bitcoin project are being addressed in line with Fund policies and with Fund advice to the authorities. Prior actions include legal reforms that have made acceptance of Bitcoin by the private sector voluntary and ensured that tax payments are made only in U.S. dollars. Transparency of the public crypto e-wallet has been strengthened, and the government plans to gradually unwind its participation in the e-wallet. Going forward, program commitments will confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin. Regulation and supervision of digital assets will be enhanced in line with evolving international best practices”. Moody’s rating agency has downgraded the country’s debt further from B3 to Caa3 on November 26, 2024, with its outlook stable; that rating has remained unchanged. Those factors may negatively affect the economy of El Salvador and disrupt the implementation of the Bitcoin Law. However, six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the modified Bitcoin Law and their impact on the Company’s operations. | |
| · | Continued negative publicity in the media with respect to Chivo S.A. de C.V. the Chivo Ecosystem, of Bitcoin ATMs in general, or of the Company’s services could have a material adverse effect on our business. The Government of El Salvador, through Chivo operates the Chivo digital wallet. The government purchased software and related services from the Company and used this software from the launch of the Chivo digital wallet in September of 2021 until December of 2021. According to media reports, the Chivo company’s operation of the Chivo digital wallet is not subject to public reporting or auditing by a banking regulator. Therefore, there is no way for an outside observer to know that the assets held by Chivo S.A. de C.V. are sufficient to cover the liabilities (user balances) of the Chivo digital wallet. If there are negative views presented in the news about the assets held by Chivo S.A. de C.V, or of the quality of its service offerings, or its lack of transparency, or fraud, or identity theft connected with the usage of the Chivo digital wallet, or any reported problems related to the Chivo digital wallet (either the version written by the Company or any subsequent version not using the Company’s Intellectual Property), then the Company’s reputation could be damaged which may negatively affect an investment in our common stock. | |
| · | Failure to maintain sufficient cash in Chivo branded ATMs to meet demand could have a material adverse effect on our reputation. Chivo S.A. de C.V. also directs the Company as to how much physical cash should be loaded into the Chivo ATMs in El Salvador for the purpose of ATM users retrieving U.S. Dollar currency in exchange for their Bitcoin or dollars held in the Chivo digital wallet. If for any reason, there is not sufficient physical cash loaded into a Chivo ATM to meet the total demand for such cash, the ATM will be unable to initiate additional transactions to dispense cash to a user and the user will see the machine as non-functional. This could create negative impression of the Chivo Ecosystem, of Bitcoin ATMs in general, of the Company’s services, or the Company’s reputation and negatively affect an investment in our common stock. | |
| · | Capital flight. Bitcoin Law could facilitate a capital flight, especially during a crisis. Many emerging markets control the flow of capital in and out of their countries to avoid a macroeconomic crisis or to prevent one from worsening. However, Bitcoin can facilitate such a flight: Once dollars are converted to Bitcoin, they can easily be sent to anyone in the world, without any control or tracking. Such an event would have a negative effect on the economy of El Salvador. Six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See the Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company’s operations. | |
| · | Environmental concerns about Bitcoin mining. The system on which Bitcoin is currently based consumes large amounts of electricity, making it particularly taxing for the environment. President Bukele believes that the country’s cheap, clean, and renewable geothermal energy from volcanoes can power Bitcoin mining rigs, thus reducing its carbon footprint. It is not clear at this time if such a solution would solve the environmental concerns. |
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Risks related to the custody of the private keys associated with the Chivo wallet system, including any risk of loss or compromise of such private keys.
The Government of El Salvador (or its designated Chivo wallet operator) retains custody of the private keys associated with the Chivo wallet system. The Company’s role is strictly limited to operating the ATM infrastructure and facilitating the transfer of cash from the ATMs to the banks that Chivo transacts with. We do not have custody or manage Bitcoin on behalf of Chivo or its end users. Furthermore, the Company does not have access to end users of the Chivo system. The end users who participate in the Chivo wallet system, also do not have access to the private keys to the Chivo wallet. When the end user chooses to receive Bitcoins in the Chivo wallet, the end user agrees that the Government of El Salvador (or its designated Chivo wallet operator) retains custody of the private keys associated with the wallet. Since the Company is neither the custodian of the private keys nor is the Company involved in the transactions between the end users and Chivo, any compromise or loss of these private keys could adversely affect public confidence in the Chivo wallet system, negatively affecting its reputation or brand, and consequently potentially reducing the number of transactions conducted through Chivo-branded ATMs resulting in lowering associated management fees earned by the Company. However, based on the Company’s assessment, such loss or compromise of private keys associated with the Chivo wallet system, would likely have only limited potential impact on the Company’s overall business because revenues from Chivo represent an insignificant fraction of the Company’s total operations and revenues. No assurance can be made that the impact of any reputational risk will not be of a significant nature in the future.
The Company entered into certain agreements with the government of El Salvador, for the operation and management of the Chivo branded ATMs, however such contracts do not obligate the Company to assume the risk of loss or compromise of private keys associated with the Chivo wallet system.
Political and economic developments in El Salvador may adversely affect Bitcoin Law.
El Salvador’s Bitcoin Law has been greeted with skepticism from both Salvadorans and international financial institutions. The population might not fully embrace Bitcoin. Requiring every business to accept Bitcoin for goods and services without adequate access to technology may be a difficult obstacle to overcome and Bitcoin Law can be changed if it remains unpopular under a successor administration. Any of these concerns could disrupt our operations in El Salvador and have a negative impact on the financial position of the Company. It should be noted that six articles of the El Salvadorian Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company’s operations.
There is political discontent in El Salvador with President Bukele’s ouster of Supreme Court judges and the potential for the president to seek a second consecutive term. The presidential period is five years in El Salvador. Consecutive re-election is not permitted, though previously elected presidents may run for a second, non-consecutive term. Recently, El Salvador’s top court and its election authority have removed what seemed to be a constitutional ban on consecutive presidential reelection, which has resulted in President Nayib Bukele seeking a second term in 2024. President Bukele won his second term in February 2024 with the vote of 85%, however, if there is a change in El Salvador’s administration after his five-year term expires, it may negatively affect Bitcoin Law and our operations in El Salvador.
Our contracts with the El Salvador government may be negatively impacted.
We have entered into agreements with the Government of El Salvador, pursuant to which we have installed and are currently operating 194 Chivo Bitcoin ATMs in El Salvador, 14 Chivo Bitcoin ATMs at El Salvador consulates in the U.S., 29 Chivo Bitcoin ATMs in other U.S. locations, with 27 ATMs in storage (as of December 31, 2025), importing and delivering 950 Chivo POS terminals for local businesses in El Salvador to transact with bitcoin, and developing and maintaining the software for the Chivo digital wallet. Each obligation comes with its own set of operational risks in addition to risks set forth herein, including but not limited to the volatile nature of crypto assets, data breach and crypto hacks, fraud conducted by users of the services offered by the Government of El Salvador, changes in U.S. and foreign laws and regulations, talent acquisition and retention, and general economic conditions. If we fail to fulfil our contractual obligations, our agreements may be terminated which may negatively impact our financial standing and reputation. For the twelve months ended December 31, 2025, and 2024, approximately 1% and 2%, respectively, of our revenues have been from the El Salvador government through our white-label service. In December 2024, the Company entered into a new Master Services Agreement (“MSA”) and Service Level Agreement (“SLA”) with the Government of El Salvador, which expires in December 2027. In conjunction with the new MSA and SLA, the Company and CHIVO completed a financial settlement agreement to finalize balances owed between the parties and terminate the original MSA, Contracts and Addendums between the Company and the Department of Treasury of El Salvador. The settlement was effective as of April 2023 with full satisfaction of all obligations thereunder. Our agreements with the Government of El Salvador may also be modified or terminated by the Government of El Salvador for any reason including but not limited to regime change, additional competition, and loss of political support. Any such unfavorable change in our business operations in El Salvador, including the termination of any contracts with the Government of El Salvador, would adversely affect our revenues and profitability, and could negatively affect an investment in our shares of common stock. No white-label ATMs have been terminated by the El Salvador government through December 31, 2025. Please note that six articles of the Bitcoin Law were modified, and three others were repealed as of January 29, 2025. See Risk Factor(s) above discussing the new rules under the provisions of the modified Bitcoin Law and their impact on the Company’s operations.
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Risk Factors Related to the Bitcoin Network, Wallets, Bitcoin, and Crypto Assets
Bitcoin, and most other crypto assets based on public key cryptography, are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet in which the bitcoin are held.
While the Bitcoin Network, and similar blockchain protocol networks, require a public key relating to a digital wallet to be published when used in a spending transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the Bitcoin held in such wallet. To the extent a private key is lost, destroyed, or otherwise compromised and no backup of the private key is accessible, Athena will be unable to access the Bitcoin, or other crypto assets, held in the related digital wallet. Any loss of private keys relating to digital wallets used to store Athena’s Bitcoin, or other crypto assets, could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock. Our hot wallets are maintained by BitGo, a regulated third-party custodian, and not by Company personnel. The Company has engaged BitGo (a qualified custodian) to secure our digital assets. BitGo provides multi-signature wallet services and secure key management for the Bitcoin that the Company holds for its own account and for facilitating customer transactions. By entrusting this function to BitGo, we add a layer of security and risk mitigation (given BitGo’s expertise and insurance arrangements) beyond what could be achieved with in-house custody.
The future and development of the Bitcoin Protocol and other blockchain technologies are subject to a variety of factors that are difficult to evaluate.
The further development and acceptance of the Bitcoin Network and other cryptographic and algorithmic protocols governing the issuance of transactions in Bitcoin and other crypto asset, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. Athena does not participate in the development of the Bitcoin Network and has little to no influence over the software developers who write the code or the miners who run the Bitcoin Network. The slowing or stopping of the development or acceptance of the Bitcoin Network could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock.
The further development and acceptance of cryptocurrency networks and other cryptocurrencies, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to predict and evaluate. The slowing or stopping of the development or acceptance of digital asset systems may adversely affect an investment in us.
Cryptocurrency that may be used to buy and sell goods and services, among other things, are a new and rapidly evolving industry which is subject to a high degree of uncertainty. The factors affecting the further development of the digital asset industry, as well as the digital asset networks, include:
| · | continued worldwide growth in the adoption and use of cryptocurrencies; | |
| · | governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the digital asset network or similar cryptocurrency systems; | |
| · | the maintenance and development of the open-source software protocol of cryptocurrency networks; | |
| · | changes in consumer demographics and public tastes and preferences; | |
| · | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; | |
| · | general economic conditions and the regulatory environment relating to cryptocurrency; and | |
| · | the impact of regulators focusing on cryptocurrencies and digital securities and the costs associated with such regulatory oversight. A decline in the popularity or acceptance of the digital asset networks could adversely affect an investment in us. |
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We are, or may in the future, be susceptible to risks arising from disruptions in crypto asset markets. Such risks could potentially result in, among other things:
| · | the depreciation of investments held in us, including the depreciation in the price of our publicly-traded stock; | |
| · | decreased user demand for our products and services; | |
| · | financing risks to us, including relating to our ability to obtain equity and debt financing; | |
| · | increased losses attributable to the crypto assets held by us; | |
| · | legal proceedings and government investigations involving us or our affiliates or other third-parties with which we do business; or | |
| · | indirect risks to our business due to any adverse impact of recent or future crypto market disruptions on our users, suppliers or other counterparties. |
Additionally, although we are not directly connected to recent crypto market events, we may still suffer reputational harm due to our association with the cryptocurrency industry in light of the recent disruption in, or as a result of any future disruptions in, the crypto asset markets. Specifically, recent negative publicity stemming from these market disruptions and speculation of potential future disruptions increases our risk of reputational harm simply by association with the industry.
Further, any future market disruptions resulting in overall decreased interest in Bitcoin could harm our business. The prevalence of cryptocurrency is a relatively recent trend, and the long-term adoption of cryptocurrency by investors, consumers, and businesses remains uncertain.
The number of user transactions and our transaction volumes is partially dependent on the price of bitcoin, as well as the associated demand for buying, selling, and trading bitcoin, which can be, and historically have been, volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease. As such, any such declines, or any declines in the price of bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us due to an associated decrease in demand for our products and services. The price and trading volume of any cryptocurrency, including bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, as discussed elsewhere in this section under the subheading “Our transaction volume may be partially dependent on the prices of bitcoin we sell, which can be volatile. If such prices decline, the volume of user transactions could decrease and our business, operating results, and financial condition would be adversely affected.”
Stablecoins may not have any intrinsic value.
Tether, USD Coin, Dai and TrueUSD are examples of stablecoins. Stablecoins are crypto assets designed to have a stable value over time as compared to typically volatile crypto assets and are typically marketed as being pegged to a Fiat Currency, most commonly the U.S. Dollar, at a rate of 1:1. Stablecoins’ market cap is at $312 Billion and has a 12.69% share of the total crypto market cap as of December 31, 2025 (according to CoinGecko https://www.coingecko.com/). The largest stablecoin is Tether, which is the third largest crypto asset by market cap at $187 billion per coinmarketcap.com as of December 31, 2025. Some have argued that some stablecoins, particularly Tether, are improperly issued without sufficient backing, and have also argued that those associated with certain stablecoins may be involved in laundering money. On February 17, 2021, the New York Attorney General entered into an agreement with Tether’s operators, requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. Terra (LUNA), another stablecoin, collapsed in May 2022 due to issues with its algorithm, resulting in the stablecoin losing all value. This sent shockwaves through the crypto market, with the total market cap of crypto assets decreasing significantly during May 2022. Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries, such as crypto asset spot markets, that support stablecoins, could have a significant impact on the global crypto market.
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A temporary or permanent blockchain “fork” to any supported crypto asset could adversely affect our business.
Blockchain protocols, including Bitcoin, Ethereum, and Litecoin, are open source. Any user can download the software, modify it, and then propose that Bitcoin, Ethereum, Litecoin, or other blockchain protocols users and miners adopt the modification. When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin, Ethereum, Litecoin, or other blockchain protocol networks, as applicable, remain uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork” (i.e., “split”) of the impacted blockchain protocol network and respective blockchain, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two parallel versions of the Bitcoin, Ethereum, Litecoin, or other blockchain protocol network, as applicable, running simultaneously, but with each split network’s crypto asset lacking interchangeability.
Both Bitcoin and Ethereum protocols have been subject to “forks” that resulted in the creation of new networks, including Bitcoin Cash ABC, Bitcoin Cash SV, Bitcoin Diamond, Bitcoin Gold, Ethereum Classic, and others. Some of these forks have caused fragmentation among platforms as to the correct naming convention for forked crypto assets. Due to the lack of a central registry or rulemaking body, no single entity can dictate the nomenclature of forked crypto assets, causing disagreements and a lack of uniformity among platforms on the nomenclature of forked crypto assets, and which results in further confusion to customers as to the nature of assets they hold on platforms. In addition, several of these forks were contentious and as a result, participants in certain communities may harbor ill will towards other communities. As a result, certain community members may take actions that adversely impact the use, adoption, and price of Bitcoin, Ethereum, Litecoin, or any of their forked alternatives.
Furthermore, hard forks can lead to new security concerns. For instance, when the Ethereum and Ethereum Classic networks split in July 2016, replay attacks, in which transactions from one network were rebroadcast on the other network to achieve “double-spending”, plagued platforms that traded Ethereum through at least October 2016, resulting in significant losses to some crypto asset platforms. Similar replay attacks occurred in connection with the Bitcoin Cash and Bitcoin Cash SV network split in November 2018. Another result of a hard fork is an inherent decrease in the level of security due to the splitting of some mining power across networks, making it easier for a malicious actor to exceed 50% of the mining power of that network, thereby making crypto assets that rely on proof-of-work more susceptible to attack, as has occurred with Ethereum Classic.
Future forks may occur at any time. A fork can lead to a disruption of networks and our information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to temporary or even permanent loss of our assets.
From time to time, we may encounter technical issues in connection with the integration of supported crypto assets and changes and upgrades to their underlying networks, which could adversely affect our business.
To support any crypto asset, a variety of front and back-end technical and development work is required to ensure proper operations including pricing, transfer, accounting, and other solutions for our Bitcoin ATM fleet, and to integrate such supported crypto asset with our existing infrastructure. For certain crypto assets, a significant amount of development work is required and there is no guarantee that we will be able to integrate successfully with any existing or future crypto asset. In addition, such integration may introduce software errors or weaknesses into our platform, including our existing infrastructure. Even if such integration is initially successful, any number of technical changes, software upgrades, soft or hard forks, cybersecurity incidents, or other changes to the underlying blockchain network may occur from time to time, causing incompatibility, technical issues, disruptions, or security weaknesses to our platform. If we are unable to identify, troubleshoot and resolve any such issues successfully, we may no longer be able to support such crypto assets, our assets may be frozen or lost, the security of our crypto asset wallets may be compromised, and technical infrastructure may be affected, all of which could adversely impact our business.
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If miners or validators of any crypto asset network demand high transaction fees, our operating results may be adversely affected.
We pay miner fees when transmitting crypto assets including bitcoin to customers upon completion of their purchase. In addition, we also pay miner fees when we move crypto assets for various operational purposes, such as when we transfer bitcoin between our regional wallets. However, miner fees can be unpredictable. For instance, in 2017, Bitcoin miner fees increased from approximately $0.35 per transaction in January 2017 to over $50 per transaction in December 2017. Even though Bitcoin’s miner fees have since decreased to an average of $0.30 per transaction as of February 20, 2026, if the demand for Bitcoin remains at current levels, we could experience high costs in excess of our historical performance. Although we attempt to adjust our pricing to pass through these expenses to our customers, we have in the past incurred, and expect to incur from time to time, losses associated with the payment of miner fees in excess of what we charge our customers, resulting in adverse impacts on our operating results.
We are subject to an extensive and rapidly evolving regulatory environment, and if a particular crypto asset we transact or transacted in is characterized as a “security”, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.
Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, and legal and regulatory interpretations and guidance in the markets in which we operate. The scope of laws, rules, and regulations that can impact our business is expansive and includes certain of the requirements that apply to financial services, money transmission, privacy protection, cybersecurity, electronic payments, securities and commodities regulation, data governance, data protection, fraud detection, marketing (including the Telephone Consumer Protection Act of 1991), civil rights (including the Americans with Disabilities Act, which generally requires, among other things, that our Athena Bitcoin ATMs be accessible to individuals with disabilities, such as visually- impaired persons), competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing as well as bespoke cryptocurrency, and related cryptocurrency laws that have been adopted in some jurisdictions that can impact cryptocurrency custody, cryptocurrency exchange and transfer, as well as cross-border and domestic cryptocurrency transmission.
We evaluate all products and services prior to launch under U.S. federal and applicable international securities laws. As part of determining whether a particular crypto asset is a security for purposes of the federal securities laws, we have taken into account a number of factors, including the various definitions of “security” under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as reports, orders, press releases, public statements and speeches by the SEC and its staff providing guidance on when a digital asset may be a security for purposes of the federal securities laws. Depending on its characteristics, a digital asset may be considered a “security” under the federal securities laws. The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict. Whether a digital asset is a security under the federal securities laws depends on whether it is included in the lists of instruments making up the definition of “security” in the Securities Act, the Exchange Act and the Investment Company Act. Digital assets as such do not appear in any of these lists, although each list includes the terms “investment contract” and “note,” and the SEC has typically analyzed whether a particular digital asset is a security by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as the Howey and Reves tests, respectively. For many digital assets, whether or not the Howey or Reves tests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular digital asset qualifying as a security under one or both of the Howey and Reves tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular digital asset can change over time as the relevant facts evolve. The laws, rules, and regulations thereunder may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptoeconomy requires us to exercise our judgment as to whether these crypto assets meet the definition of a security. Our conclusions based on our legal analysis of the criteria discussed herein, do not constitute a legal determination and are not binding on regulators or the courts. It is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on or temporary or permanent suspensions of our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
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The SEC and its staff have taken the position that certain crypto assets fall within the definition of a “security” under the U.S. federal securities laws. The SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given crypto asset is a security in April 2019. The legal test for determining whether any given crypto asset is a security is a highly complex, fact-driven analysis that evolves over time. We have established policies and practices to evaluate each crypto asset that we sell to customers, as discussed above, including applying the Howey and Reves tests, as may be applicable, to each crypto asset that we sell to customers. The Howey test is a legal framework outlined by the U.S. Supreme Court to determine whether a transaction qualifies as an investment contract (security) and would be subject to U.S. securities laws. This test requires the following four criteria to be met: investment of money, expectations of profits, common enterprise and reliance on the efforts of others. The crypto assets that the Company sells to customers do not meet all four of these definitions. The Company does not believe that Bitcoin and Bitcoin Cash meet the criterion of satisfying the definition of a common enterprise; as investors are not pooling their funds, there is no promoter or issuer and they have never sought public funds to help develop its technology. Further, an investor’s success is not reliant on the efforts of others. The Company evaluated Ethereum, including the assessment of the impacts of the change from proof-of-work to proof-of-stake and concludes that Ethereum does not meet the definition of a security as it does not satisfy the common enterprise criterion or the reliance of others criterion. We believe that the Ethereum network remains decentralized and that there is no horizontal or vertical commonality between validators. Horizonal and vertical commonality requires the entrepreneurial efforts of a promoter, which the Company believes that Ethereum does not have. Profits (rewards) are determined primarily based on each validator’s individual effort and they do not expect rewards from the efforts of other validators. The Company further notes that the Company has not provided staking abilities and benefits to customers for Ethereum, resulting in no change in the Company’s conclusion that Ethereum does not meet the Howey test.
We have considered and determined that the recent completion of Ethereum’s transition to Proof-of-Stake consensus, known as “the Merge”, has not caused Ethereum to have become a security for a variety of reasons including, but not limited to those discussed below. Consistent with the holdings in recent federal court cases involving Ripple and Terraform, we believe that whether something is an investment contract under the Howey test is a transaction-specific assessment that does not attach to the underlying object of that transaction as the underlying object of a transaction is not itself “a contract, transaction or scheme.” We therefore believe that a digital asset such as Ethereum cannot itself be an investment contract security, including after the Merge. We also believe that Ethereum is a consumable commodity that is not a security. Ethereum was used in making gas fee payments on the Ethereum Network prior to the Merge and continues to be extensively used in this capacity after the Merge. The Merge also introduced a new use for Ethereum as part of the new consensus mechanism, which provides further evidence that Ethereum is a consumable commodity and not a security. We further believe that any expectations of profit a purchaser of Ethereum may possess from their purchase depends on the overall market for Ethereum, not any identifiable “other” or issuer as required in the Howey test. Specifically, we believe that Ethereum’s value derives from the supply and demand for useful applications built on the Ethereum Network. We believe this to be the case before the Merge and continues to be the case after the Merge. We also believe that even if a holder of Ethereum expects profits based upon the action of persons directly involved in updating the Ethereum Network’s code, or in publishing new blocks of transactions on the Ethereum Network, the group of persons involved in such activities is sufficiently decentralized such that there is no “other” upon whom a purchaser could rely for Howey purposes. There were thousands of developers working on the Ethereum Network’s code before the Merge, and there continue to be today, and the same can be said of thousands of miners publishing blocks on the Ethereum Network. We therefore believe that the Ethereum Network remains “sufficiently decentralized” and that Ethereum is not a security. We have also considered that, similar to profits that could be sought from mining under proof of work, any profits realized from validating Ethereum transactions only accrue to those who affirmatively engage in validation efforts, rather than holders of Ethereum more generally. Any of these profits are also based on the validator’s own efforts to engage in validation, and not the efforts of identifiable “others” more generally. We believe Ethereum is not a security because futures contracts with Ethereum as the underlying asset continue to be offered by trading platforms regulated only by the Commodity Futures Trading Commission (CFTC), even after the Merge. In addition, we have considered generally whether the Merge may have caused Ethereum to be classified as a security under Reves or any other instrument making up the definition of “security” in the Securities Act, the Exchange Act and the Investment Company Act, and concluded that it did not.
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We believe that we have applied the proper legal standards in determining that Ethereum is not a security in light of the uncertainties inherent in the Howey and Reves tests. In light of these uncertainties and the fact-based nature of the analysis, we acknowledge that Ethereum may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to be a security under the federal securities laws notwithstanding our prior conclusion; and our prior conclusion, even if reasonable under the circumstances, would not constitute a legal determination binding on regulators or the courts and would not preclude legal or regulatory action based on the presence of a security.
The Company does not believe that Tether or Litecoin meet the criterion of expectation of profit and therefore they are not securities. While Tether is a stable coin that is pegged to the U.S. Dollar, Litecoin is not a stable coin, and it is valued based on market value.
We currently offer only Bitcoin for sale at all our ATM machines. We also operate Athena Plus for private clients and trade customers of the Company. We buy and sell Bitcoin through our Athena Plus services, but we have also facilitated transactions in other crypto assets prior to July 19, 2023. For the year ended December 31, 2025, and 2024, we had 228 and 83 Athena Plus transactions, respectively, for Bitcoin. Since July 19, 2023, we do not transact, or make offers to transact with our customers, in any crypto assets except Bitcoin. We may offer additional cryptocurrencies in the future only if there were significant customer demand for a specific crypto asset and that crypto asset was available to us through multiple trading partners, crypto exchanges and crypto asset brokers.
We believe that we have applied the proper legal standards in determining that the crypto assets we sell to customers are not a “security” in light of the uncertainties inherent in the Howey and Reves tests. In light of these uncertainties and the fact-based nature of the analysis, we acknowledge that a crypto asset we sell to customers may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to be a security under the federal securities laws notwithstanding our prior conclusion based on our analysis; and our prior conclusion, even if reasonable under the circumstances, would not constitute a legal determination binding on regulators or the courts, and would not preclude legal or regulatory action based on the presence of a security.
The classification of a crypto asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, and clearing of such assets. For example, a crypto asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in crypto assets that are securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade crypto assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system, or ATS, in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. If Bitcoin, Ether, Litecoin, and BCH or any other crypto asset we transacted in the past as listed above, is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such supported crypto asset (if it is still being used in our transactions) or for our Company if it is determined that certain securities laws were violated and we may be subject to regulatory scrutiny, investigation and penalties. Moreover, the networks on which such supported crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto asset to be traded, cleared, and custodied as compared to other crypto assets that are not considered to be securities. Additionally, new laws, regulations, or interpretations may result in litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying us from offering certain products or services, or could impact how we offer such products and services. Foreign jurisdictions may have similar regulations and licensing, registration, and qualification requirements.
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Any failure to obtain or maintain necessary money transmission and virtual currency business activity registrations and licenses could adversely affect our operations.
In the United States, we have obtained licenses to operate as a money transmitter, or the equivalent, in the states where we understand such licenses or equivalent are required to conduct our business. We also currently operate in states where we do not believe we are required, or have been informed by the relevant jurisdiction that we are not required, to obtain money transmitter licenses or any other required licenses. This belief is based on our analysis of the applicable laws and regulations and/or our communications with the regulators in the relevant jurisdiction. We plan to apply for money transmitter or virtual currency licenses or their equivalents in additional jurisdictions as needed. As we obtain additional licenses, we may be required to bear substantial costs to comply with the requirements of the additional states or jurisdictions. If our licenses are not renewed, we are denied licenses in additional states or jurisdictions where we choose to apply for a license, or jurisdictions that have previously not required a license require a license in the future, we could be forced to seek a license or change our business practices.
Additionally, from time to time, we are the 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.
As a money services business and a money transmitter, we are subject to a range of legal obligations and requirements including bonding, net worth maintenance, user notice and disclosure, reporting, recordkeeping and cybersecurity requirements, and obligations that apply to the safeguarding of third-party funds and crypto assets. In addition, the licensed entity within our corporate structure is subject to inspection and examination by the state licensing agencies and certain actions involving that entity, such as changes in controlling equity holders, board members, and senior management, may require regulatory approval. Further, similar to as discussed above, if we were found by these regulators to be in violation of any applicable laws, rules, or regulations, we could be subject to fines, penalties, lawsuits, and enforcement actions, additional compliance requirements, increased regulatory scrutiny of our business, restriction of our operations, or damage to our reputation or brand. Regulatory requirements are constantly evolving, and we cannot predict whether we will be able to meet changes to existing regulations or the introduction of new regulations without such compliance harming our business, financial condition, and operating results.
Certain jurisdictions have enacted rules that require money transmitters, money services businesses, or virtual currency businesses to establish and maintain transaction monitoring, filtering, scanning and cybersecurity. programs. Wherever we are subject to these rules, we are required to adopt business practices that require additional expenditures and impact our operating results.
Additionally, if federal, state, or international regulators were to take actions that limit or prohibit us or our business partners from continuing to operate our business or their businesses as currently operated, whether by imposing additional requirements, compliance obligations or sanctions, such actions could harm our business. Any change to our business practices that makes our service less attractive to users or prohibits use of our services by residents of a particular jurisdiction could decrease our transaction volume and harm our business.
Risk Factors Related to Current and Future Regulations and Other Law Enforcement Actions
The regulations that govern our primary business operations are in flux and could change in unpredictable ways that negatively affect our business operations, demand for our services, or our financial position.
Current regulations acknowledge and allow for companies to sell bitcoin and other crypto assets in the United States and other countries where Athena operates. If regulations change to disallow the sale of bitcoin or other crypto assets such a change could have a negative impact on revenues and adversely affect an investment in our common stock. Current regulations require Know Your Customer (“KYC”) information be collected as part of a Customer Information Program (“CIP”).
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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.
If regulations change and require significantly more information to be collected from customers, this change may have a negative impact on customer behavior and could adversely affect our business, financial condition and results of operations and ultimately any investment in our common stock.
We are subject to an extensive and highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws, rules, and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.
Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, and legal and regulatory interpretations and guidance in the markets in which we operate. The scope of laws, rules, and regulations that can impact our business is expansive and includes certain of the requirements that apply to financial services, money transmission, privacy protection, cybersecurity, electronic payments, securities and commodities regulation, data governance, data protection, fraud detection, marketing. civil rights (including the Americans with Disabilities Act, which generally requires, among other things, that our employees be accessible to individuals with disabilities), competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. These laws include bespoke cryptocurrency and cryptocurrency laws that have been adopted in some jurisdictions that can impact cryptocurrency custody, exchange, and transfer, cross-border and domestic crypto asset transmissions.
Many of these laws, rules and regulations were adopted prior to the advent of the internet, mobile technologies, crypto assets and related technologies. As a result, some applicable laws, rules and regulations may not contemplate or address unique issues associated with crypto assets or the digital financial system, may be subject to significant uncertainty, and may vary widely across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of cryptocurrencies and the digital financial system requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. See also “We are subject to an extensive and rapidly evolving regulatory environment, and if a particular crypto asset we transact or transacted in is characterized as a “security”, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition”.
To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of authorizations, registrations or licenses, limitations on our products and services, whistleblower complaints, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
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In addition to existing laws, rules and regulations, various governmental and regulatory bodies, including legislative and executive bodies, in the U.S. and in other jurisdictions may adopt new laws, rules, regulations and regulatory requirements. For example, we could become subject to laws, regulations or other regulatory action imposing restrictions, disclosure requirements or limitations on the transaction fees that we are able to charge our users for bitcoin transactions, including the markup at which we sell bitcoin to users and the separate flat transaction fee that we charge. As a result, we may not be able to sell bitcoin at a profitable margin, which would adversely affect our revenue and financial condition. Furthermore, new interpretations of existing laws, rules, and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the digital financial system as a whole and our legal and regulatory status in particular by changing how we operate our business, how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new registration or licensing requirements, or imposing a total ban on certain bitcoin transactions, as has occurred in certain jurisdictions in the past.
We are subject to ongoing supervision, examination, oversight, and reviews and currently are, and expect in the future, to be subject to investigations and inquiries, by U.S. federal and state regulators, and foreign financial service regulators. As a result of findings from these reviews and examinations, regulators have, are, and may in the future require us to take certain actions, including amending, updating, or revising our compliance policies and procedures from time to time, limiting the kinds of users that we provide services to, changing, terminating, or delaying our registrations or licenses and the introduction of our existing or new product and services, and undertaking further external audits. From time to time, we may receive examination reports citing violations of rules and regulations, inadequacies in existing compliance programs, and requiring us to enhance certain practices with respect to our compliance program, including user due diligence, transaction monitoring, training, and regulatory reporting and recordkeeping. Implementing appropriate measures to properly remediate these examination findings may require us to incur significant costs, and if we fail to properly remediate any of these examination findings, we could face civil litigation, significant fines, damage awards, forced removal of certain employees including members of our executive team, barring of certain employees from participating in our business in whole or in part, revocation of existing authorizations, registrations or licenses, limitations on existing and new products and services, reputational harm, negative impact to our existing relationships with regulators, exposure to criminal liability, or other regulatory consequences. Further, we believe increasingly strict legal and regulatory requirements and additional regulatory investigations and enforcement, any of which could occur or intensify, may continue to result in changes to our business practices, as well as increased costs, and supervision and examination for ourselves and our service providers. Moreover, new laws, rules, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors or could impact how we offer such products and services. Adverse changes to, or our failure to comply with, any laws, rules, and regulations have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.
It may become illegal to acquire, own, hold, sell, or use Bitcoin or other cryptocurrencies, participate in blockchains or utilize cryptocurrencies in other countries, which would adversely affect us.
Although currently the use of crypto assets generally is not restricted in most countries, countries such as China and Russia have taken harsh regulatory actions to curb the use of cryptocurrencies and may continue to take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use cryptocurrencies or to exchange them for Fiat Currency. In September 2021, China instituted a blanket ban on all cryptocurrency transactions and mining, including services provided by overseas cryptocurrency exchanges in mainland China, effectively making all cryptocurrency-related activities illegal in China. In other nations, including Russia, it is illegal to accept payment in cryptocurrency for consumer transactions, and banking institutions are barred from accepting deposits of Bitcoin or other cryptocurrencies. In January 2022, the Central Bank of Russia called for a ban on crypto asset activities ranging from mining to trading. Russia more recently plans to introduce a comprehensive crypto market regulatory framework by July 1, 2027, where qualified and unqualified investors will be allowed to buy cryptocurrencies under different rules, with qualified investors facing mandatory risk testing but no limits on most purchases. While our operations are currently limited to the U.S. and Latin America, such restrictions may adversely affect our growth potential or us if the restrictions limit the large-scale use of cryptocurrency or if the use of cryptocurrency becomes confined to certain regions globally. Such circumstances could have a material adverse effect on our business, prospects, operating results, and financial condition.
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The digital financial system is continually being developed. As a result, governments and policymakers are still considering what a regulatory regime for cryptocurrencies should look like. If we are unable to effectively react to future proposed legislation and regulation of cryptocurrencies or cryptocurrency businesses, our business, operating results, and financial condition could be adversely affected.
The digital financial system is continually being developed and the new laws are being proposed and enacted. As a result, many policymakers are just beginning to consider what a regulatory regime for cryptocurrency should look like and the elements that would serve as the foundation for such a regime. As cryptocurrency has grown in both popularity and market size, various U.S. federal, state, and local and foreign governmental organizations, consumer protection agencies, and public advocacy groups have been examining the operations of cryptocurrency networks, users and platforms, with a focus on how cryptocurrencies can be used to launder the proceeds of illicit activities, fund criminal or terrorist enterprises, and the safety and soundness of platforms and other service providers that hold cryptocurrencies for users. Many of these entities have called for heightened regulatory oversight, and have proposed legislation and regulations, undertaken enforcement actions and/or issued consumer advisories describing the risks posed by cryptocurrencies to users and investors. The impacts of such potential and proposed heightened regulatory oversight are not yet known. For example, on November 20, 2023, the California Department of Financial Protection and Innovation (“DFPI”) issued an invitation for comments on a potential rulemaking relating to two new California laws that will impose sweeping obligations on companies engaged in virtual currency activities in California and with California residents. The first law, Assembly Bill 39, prohibits people from engaging in digital financial asset business activity – or holding themselves out as being able to engage in digital financial asset business activity – without meeting certain criteria and obtaining a license from the DFPI, including compliance obligations and stable coin approvals among other guidelines. The second, Senate Bill 401, imposes requirements on operators of digital financial asset transaction kiosks. The DFPI refers to the two bills collectively as the Digital Financial Assets Law. The DFAL began taking effect on January 1, 2024, with covered persons required to be licensed, or to have submitted a license application and be awaiting approval or denial of that application, on or before July 1, 2025.
Competitors, including traditional financial services, have spent years cultivating professional relationships with relevant policymakers on behalf of their industry so that those policymakers may understand that industry, the current legal landscape affecting that industry, and the specific policy proposals that could be implemented to responsibly develop that industry. The lobbyists working for these competitors have similarly spent years developing and working to implement strategies to advance these industries. Members of the digital financial system have started to engage policymakers directly and with the help of external advisors and lobbyists, but this work is still in a relatively nascent stage. As a result, new laws, rules, and regulations may be proposed and adopted in the U.S. and internationally, or existing laws, rules, and regulations may be interpreted in new ways, that harm the digital financial system or digital asset businesses, which could adversely impact our business.
We may be subject to liability under, or face business risks in connection with, state cryptocurrency laws.
May states have also begun passing cryptocurrency kiosk laws, limiting the daily amount of cash that can be exchanged for cryptocurrencies, limiting the number of new Bitcoin ATMs which can be placed into service, requiring notices be placed near Bitcoin ATMs relating to potential scam and fraud risks, capping the amount of fees an Bitcoin ATM operator can charge, and in many cases, requiring the refund for fraudulent transactions (some of which only apply to first time customers). Such laws may limit the amount of revenue our Bitcoin ATMs can generate, limit our ability to expand the number of Bitcoin ATMs we operate, require us to spend significant amounts of money on signage or refunds, or otherwise reduce the amount of revenue we generate from the operation of our Bitcoin ATMs.
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Our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions may increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering.
If we expand our activities to other countries we do not currently operate in, we may become obligated to comply with additional laws, rules, regulations, policies, and legal interpretations of both the jurisdictions in which we operate and those into which we offer products and services on a cross-border basis. For instance, financial regulators outside the U.S. have in recent months significantly increased their scrutiny of digital asset exchanges, such as by requiring digital asset exchanges operating in their local jurisdictions to be regulated and licensed under local laws. Moreover, laws regulating financial services, the internet, mobile technologies, cryptocurrencies, and related technologies outside of the U.S. are evolving, extensive and could impose different, more specific, or even conflicting obligations on us, as well as broader liability. In addition, we are required to comply with laws, rules, and regulations related to economic sanctions and export controls enforced by U.S. Department of Commerce’s Bureau of Industry and Security, and U.S. anti-money laundering and counterterrorist financing laws, rules, and regulations enforced by FinCEN and certain state financial services regulators. U.S. sanctions and export control laws and regulations generally restrict dealings by persons subject to U.S. jurisdiction with certain jurisdictions that are the target of comprehensive embargoes, currently the Crimea Region, the Donetsk People’s Republic of Ukraine, the Luhansk People’s Republic of Ukraine, Cuba, Iran, North Korea, and Syria, as well as with persons, entities, and governments identified on certain prohibited party lists. Moreover, as a result of the Russian invasion of Ukraine, the U.S., the E.U., the United Kingdom, and other jurisdictions have imposed wide-ranging sanctions on Russia and Belarus and persons and entities associated with Russia and Belarus. There can be no certainty regarding whether such governments or other governments will impose additional sanctions, or other economic or military measures against Russia or Belarus.
We have an Office of Foreign Assets Control (“OFAC”) compliance program in place that includes monitoring of IP addresses to identify prohibited jurisdictions and of blockchain addresses that have either been identified by OFAC as prohibited or that otherwise are believed by us to be associated with prohibited persons or jurisdictions. Nonetheless, there can be no guarantee that our compliance program will prevent transactions with particular persons or addresses or prevent every potential violation of OFAC sanctions, and our expansion into additional jurisdictions may subject us to additional risks related to use of our services by sanctioned persons.
From time to time, we have submitted voluntary disclosures to OFAC or responded to administrative subpoenas from OFAC. Certain of these voluntary self-disclosures are currently under review by OFAC. To date, none of those proceedings has resulted in a monetary penalty or finding of violation. Any present or future government inquiries relating to sanctions could result in negative consequences for us, including costs related to government investigations, financial penalties, and harm to our reputation. The impact on us related to such matters could be substantial. Although we have implemented controls and are working to implement additional controls and screening tools designed to prevent sanctions violations, there is no guarantee that we will not inadvertently provide access to our products and services to sanctioned parties or jurisdictions in the future.
Regulators worldwide frequently study each other’s approaches to the regulation of the digital financial system. Consequently, developments in any jurisdiction may influence other jurisdictions. New developments in one jurisdiction may be extended to additional services and other jurisdictions. As a result, the risks created by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting our business in another place or involving another service. Conversely, if regulations diverge worldwide, we may face difficulty adjusting our products, services, and other aspects of our business with the same effect. The complexity of U.S. federal and state and international regulatory and enforcement regimes could result in a single event prompting numerous overlapping investigations and legal and regulatory proceedings by multiple government authorities across different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm our reputation, damage our brands and business, and adversely affect our operating results and financial condition. Due to the uncertain application of existing laws, rules, and regulations, it may be that, despite our regulatory and legal analysis concluding that certain products and services are currently unregulated, such products or services may indeed be subject to financial regulation, licensing, or authorization obligations that we have not obtained or with which we have not complied. As a result, we are at a heightened risk of enforcement action, litigation, regulatory, and legal scrutiny which could lead to sanctions, cease and desist orders, or other penalties and censures which could significantly and adversely affect our continued operations and financial condition.
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Complex and evolving U.S. and international laws, rules and regulation regarding privacy and data protection could result in claims, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business.
We are subject to requirements relating to data privacy and the collection, processing, storage, transfer, and use of data under U.S. federal, state and foreign laws. For example, the U.S. Federal Trade Commission (FTC) routinely investigates the privacy practices of companies and has commenced enforcement actions against many, resulting in multi-million-dollar settlements and multi-year agreements governing the settling companies’ privacy practices. The California Consumer Protection Act, which became effective on January 1, 2020, imposes heightened data privacy requirements on companies that collect information from California residents. If we are unable to meet any such requirements, we may be subject to significant fines or penalties. As the number of jurisdictions enacting privacy and related laws increases and the scope of these laws and enforcement efforts expands, we will increasingly become subject to new and varying requirements. Failure to comply with existing or future data privacy laws, rules, regulations and requirements, including by reason of inadvertent disclosure of personal information, could result in significant adverse consequences, including reputational harm, civil litigation, regulatory enforcement, costs of remediation, increased expenses for security systems and personnel, and harm to our users. These consequences could materially adversely affect our business, financial condition and results of operations.
In addition, we make information available to certain U.S. federal and state agencies, as well as certain foreign, government agencies in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing and pursuant to legal obligations and authorizations. In recent years, we have experienced increasing data sharing requests by these agencies, particularly in connection with efforts to prevent terrorist financing or reduce the risk of identity theft. During the same period, there has also been increased public attention to the corporate use and disclosure of personal information, accompanied by legislation and regulations intended to strengthen data protection, information security, and consumer privacy. These regulatory goals may conflict, and the law in these areas may not be consistent or settled. While we believe that we are compliant with our regulatory responsibilities, the legal, political, and business environments in these areas are rapidly changing, and subsequent legislation, regulation, litigation, court rulings or other events could expose us to increased program costs, liability and reputational damage that could have a material adverse effect on our business, financial condition, and results of operations.
Future developments in tax laws or regulations regarding the treatment and reporting of cryptocurrencies for U.S. and foreign tax purposes could adversely impact our tax expense and liabilities, reporting obligations, liquidity, and business.
Due to the new and evolving nature of cryptocurrencies and the absence of comprehensive legal and tax guidance with respect to digital asset products and transactions, many significant aspects of the U.S. and foreign tax treatment of transactions involving cryptocurrencies, such as the purchase and sale of cryptocurrencies, are uncertain, and it is unclear whether, when and what guidance may be issued in the future on the treatment of digital asset transactions for U.S. and foreign income tax purposes. In 2014, the IRS released Notice 2014-21, discussing certain aspects of “virtual currency” for U.S. federal income tax purposes and, in particular, stating that such virtual currency (i) is “property,” (ii) is not “currency” for purposes of the rules relating to foreign currency gain or loss, and (iii) may be held as a capital asset. In 2019, the IRS released Revenue Ruling 2019-24 and a set of “Frequently Asked Questions” (which have been periodically updated), that provide additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital currencies are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of virtual currency. However, this guidance does not address other significant aspects of the U.S. federal income tax treatment of cryptocurrencies and related transactions.
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There continues to be uncertainty with respect to the timing, character and amount of income inclusions for various digital asset transactions. Although we believe our treatment of digital asset transactions for federal income tax purposes is consistent with existing guidance provided by the IRS and existing U.S. federal income tax principles, because of the rapidly evolving nature of digital asset innovations and the increasing variety and complexity of digital asset transactions and products, it is possible the IRS and various U.S. states may disagree with our treatment of certain digital asset transactions for U.S. tax purposes, which could adversely affect our users and our business. Similar uncertainties exist in the foreign markets in which we operate, affecting our non-U.S. user base, and these uncertainties and potential adverse interpretations of tax law could affect our non-U.S. users and the vitality of our platforms outside of the U.S. There can be no assurance that the IRS, the U.S. state revenue agencies or other foreign tax authorities, will not alter their respective positions with respect to cryptocurrencies in the future or that a court would uphold the treatment set forth in existing guidance. It also is unclear what additional guidance may be issued in the future on the treatment of existing digital asset transactions and future digital asset innovations for purposes of U.S. tax or other foreign tax regulations. Any such alteration of existing IRS, U.S. state and foreign tax authority positions or additional guidance regarding digital asset products and transactions could result in adverse tax consequences for holders of cryptocurrencies and could have an adverse effect on the value of cryptocurrencies and the broader cryptocurrency markets. Future technological and operational developments that may arise with respect to cryptocurrencies may increase the uncertainty with respect to the treatment of cryptocurrency for U.S. and foreign tax purposes. The uncertainty regarding tax treatment of digital asset transactions impacts our users, and could adversely impact our business, including if the volume of cryptocurrency transactions decreases due to an adverse tax effect.
Sanctions could cause us to cease operations in foreign countries or dealings with foreign citizens.
Sanctions, such as those promulgated by the U.S. Department of Treasury, could be brought against countries where the Company operates, or against citizens of certain countries regardless of where they reside. Ceasing operations in such a country would have a negative impact on revenues and the Company may also incur extraordinary costs which may adversely impact an investment in our common stock.
Heightened scrutiny by regulators could be detrimental to the operations of the Company or its brand image.
Our existing operations and any future operations or investments may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the United States or globally. As a result, we may be subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on our ability to operate or invest in the United States or any other jurisdiction, in addition to those described herein. Further any negative connotations directed at the Company by such public officials could be detrimental to the Company’s brand image and adversely impact an investment in our common stock.
We or our assets may become subject to federal and state asset forfeiture laws which could negatively impact our business operations or financial position.
Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions, or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, seizure of assets, disgorgement of profits, cessation of business activities or divestiture.
As an entity that conducts business in cash (physical currency), we are potentially subject to federal and state forfeiture laws (criminal and civil) that permit the government to seize the proceeds of suspected criminal activity. Civil forfeiture laws could provide an alternative for the federal government or any state (or local police force) that wants to discourage residents from conducting transactions with crypto asset related businesses. Also, an individual can be required to forfeit property suspected to be the proceeds of a crime even if the individual is not charged or convicted of a crime. Many law enforcement agencies consider large amounts of cash to be suspicious of criminal activity and have been known to seize such property when discovered. Any seizure or forfeiture of the Company’s assets, even if only temporary, could disrupt its normal operations or financial position and negatively affect an investment in our common stock.
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Regulators and payment processors have historically taken actions relating to access to banking services, which could materially adversely affect our business.
Actions by the U.S. Department of Justice (the “Justice Department”), the Federal Deposit Insurance Corporation, (“FDIC”), and certain state regulators beginning in 2013, referred to as “Operation Choke Point,” appear to have been intended to discourage banks and payment processors from providing access to banking for certain businesses that are considered high-risk. This heightened regulatory scrutiny by the Justice Department, the FDIC and other regulators has caused various banks and payment processors to cease doing business with Bitcoin ATM companies or companies who do business with Bitcoin ATM companies, without consideration of the actual risk to the banks or processors, simply to avoid heightened federal and state regulatory scrutiny. The operation was officially ended in August 2017; however, future discouragement by the Justice Department, the FDIC, or the Office of the Comptroller of the Currency (“OCC”) could cause the Company, or its service providers including locations where the Company places its fleet of Bitcoin ATMs, to have restricted access to the U.S. financial system as provided by banks, payment providers, or other financial intermediaries, and that could have a negative impact on the Company’s operations, its ability to perform its contractual obligations, or its financial position.
If the Company is unable to satisfy data protection, security, privacy, and other government- and industry-specific requirements, its growth could be harmed.
There are several data protections, security, privacy, and other government and industry-specific requirements, including those that require companies to notify individuals of data security incidents involving certain types of personal data, enacted across various jurisdictions globally. In addition, our agreements to deliver software may have requirements for the protection of user data. Security compromises or cyberattacks could harm the Company’s reputation, erode market confidence in the effectiveness of its security measures and reliability of its endorsements, negatively impact its ability to attract new clients, or cause clients to stop using the Company’s services.
The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected.
The accounting rules and regulations that we must comply with are complex and subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. In addition to the United States, the Company operates in several Latin American countries that may or may not offer similar accounting treatments to some of the Company’s transactions. This could have a significant effect on the ability of the Company to offer comparable results segmented by country in the future. A change in these principles or interpretations could have a significant effect on our reported financial results and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Recent actions and public comments from the FASB and the SEC have focused on the integrity of financial reporting and internal controls. In addition, many companies’ accounting policies are being subject to heightened scrutiny by regulators and the public.
On December 13, 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. When adopting the standard, entities are required to record a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. Retrospective restatement would not be required or allowed for prior periods. For all entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. Early adoption is permitted. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company adopted this ASU as of January 1, 2025. There was no material impact on the financial statements due to the Company’s holding period of crypto assets being typically two days or less.
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Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government of officials, and if those negative characterizations become increasingly accepted by current or potential new users and/or our retail partners, or result in restrictions or limitations on the fees we charge to users, our reputation could be significantly impacted, which when coupled with required modifications to our fee model could result in decreased demand for our products and services and a corresponding decrease in our transaction volume, all of which could materially and adversely impact our business.
Certain media reports have asserted that laws and regulations regarding cryptocurrencies and related transactions and activities should be broader and more restrictive. In many cases, these media reports can focus on fees charged to users, which are often alleged to be higher than the fees typically charged by banks or similar institutions, as well as marketing tactics, which are alleged to target socioeconomically vulnerable communities. The fees and marketing strategies associated with our kiosks are from time to time characterized by consumer advocacy groups and media reports as predatory or abusive without discussing the numerous benefits to users. If the negative characterization of our marketing strategies and/or fee structure becomes increasingly accepted by current or potential new users of our ATMs, demand for our products and services could decrease, which could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to effectively respond to such characterizations, or if there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell bitcoin to users, we may experience declines in user loyalty and transactions, which could have a material adverse effect on our business, results of operations and financial condition. Additionally, any actions by our competitors that are challenged by users, advocacy groups, the media or governmental agencies or entities as being abusive or predatory, could result in our products and services being perceived as unlawful or inappropriate activities or business practices, merely because we operate in the same general industries as such competitors. Such perception, whether or not accurate, could have a material adverse effect on our business, results of operations and financial condition, and as a result, the value of our common stock.
Litigation or investigations involving us, our agents or other contractual counterparties could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations.
From time to time we are subject to allegations and complaints that individuals or entities have used our products and services for fraud-induced money transfers, as well as certain money laundering activities, which may result in fines, penalties, judgments, settlements and litigation expenses. We also are the subject from time to time of litigation related to our business (including as discussed under “Legal Proceedings”). For example, we are from time to time 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.
Regulatory and judicial proceedings and potential adverse developments in connection with ongoing litigation may adversely affect our business, financial condition and results of operations. There may also be adverse publicity associated with lawsuits, consents, and investigations that could decrease third-party and consumer use and acceptance of our products and services. Additionally, our business may be the subject of class action lawsuits including securities litigation, regulatory actions and investigations and other general litigation. The outcome of class action lawsuits, including securities litigation, regulatory actions and investigations and other litigation is difficult to assess or quantify but may include substantial fines and expenses, as well as the revocation of required authorizations, registrations or licenses or the loss of approved status, which could have a material adverse effect on our business, financial position, and results of operations or users’ confidence in our business. Plaintiffs or regulatory agencies in these lawsuits, actions or investigations may seek recovery of very large or indeterminate amounts, and the magnitude of these actions may remain unknown for substantial periods of time. The cost to defend or settle future lawsuits or investigations may be significant. In addition, improper activities, lawsuits or investigations involving third-parties may adversely impact our business operations or reputation even if we are not directly involved. Any adverse outcome in these or other proceedings, including any that may be asserted in the future, could harm our reputation, and have an adverse impact on our business, financial condition, results of operations, cash flows, or prospects. We cannot assure you what the ultimate outcome of any particular dispute or legal proceeding will be.
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New regulation or legislation may impact our business operations and financial results.
The Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions effective in September 2024, requires brokers, including digital asset trading platforms, digital asset payment processors, and certain digital asset hosted wallets, to file information returns, and furnish payee statements, on dispositions of digital assets effected for customers in certain sale or exchange transactions. The impact of these regulations on businesses can be significant.
These regulations could increase compliance costs, create operational challenges, cause our general and administrative costs to increase and potentially impact the profitability of our businesses.
To comply with laws adopted by the United States government or other United States or foreign regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of which may cause our general and administrative and compliance costs to increase without an ability to pass through any increased expenses through higher prices considering that other federal and state regulations may also place restrictions on volume, margin and pricing.
The Company is diligently monitoring developments related to these regulations, but the ultimate outcome and the specific requirements that may be imposed remain uncertain. The uncertainty surrounding the interpretation and enforcement of these regulations may create additional challenges in our digital asset transactions and reporting practices as the regulatory landscape evolves.
Risk Factors Related to Intellectual Property
Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition.
Our business depends in large part on our proprietary technology and our brand. We rely on, and expect to continue to rely on, a combination of trademark, trade dress, domain name, copyright, and trade secret and laws, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights. However, our efforts to protect our intellectual property rights may not be sufficient or effective. Our proprietary technology and trade secrets could be lost through misappropriation or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. There can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services, or technologies that are substantially like ours and that compete with our business.
We may in the future be sued by third parties for alleged infringement of their proprietary rights.
In recent years, there has been considerable patent, copyright, trademark, domain name, trade secret and other intellectual property development activity in the crypto economy, as well as litigation, based on allegations of infringement or other violations of intellectual property, including by large financial institutions. Furthermore, individuals and groups (collectively “patent trolls”) can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. Our use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation. We cannot guarantee that our internally developed or acquired technologies and content do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or services or using certain technologies, force us to implement expensive workarounds, or impose other unfavorable terms. We expect that the occurrence of infringement claims is likely to grow as the market grows and matures. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources. Further, during any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities analysts and investors regard these announcements as negative, the market price of our common stock may decline. Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures. Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial condition and negatively affect an investment in our common stock.
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Risk Factors Related to Our Employees and Other Service Providers
The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could adversely impact our business, operating results, and financial position.
We operate in a new industry that is not widely understood and requires highly skilled and technical personnel. We believe that our future success is highly dependent on the talents and contributions of our senior management team, members of our executive team, and other key employees across operations, customer support, finance, and compliance. Our future success depends on our ability to attract, develop, motivate, and retain highly qualified and skilled employees. Due to the nascent nature of the crypto asset industry, in particular the Bitcoin ATM market, the pool of qualified talent is extremely limited, particularly with respect to executive talent, engineering, cross-border operations, risk management, and financial regulatory expertise. We face intense competition for qualified individuals from numerous software, finance and other technology companies. To attract and retain key personnel, we incur significant costs, including salaries, benefits and equity incentives. Even so, these measures may not be enough to attract and retain the personnel we require to operate our business effectively. The loss of even a few qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business could adversely impact our operating results and impair our ability to grow.
In the event of employee or service provider misconduct or error, our business may be adversely impacted.
Employee or service provider misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of funds, identity theft, misappropriation of information, failing to supervise other employees or service providers, and improperly using confidential information. Employee or service provider errors, including mistakes in executing, recording, or processing transactions for customers, could expose us to the risk of material losses even if the errors are detected. Although we have implemented processes and procedures and provide training to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful. Moreover, the risk of employee or service provider error or misconduct may be even greater for novel products and services. It is not always possible to deter misconduct, and the precautions we take to prevent and detect such activities may not be effective in all cases. If we were found to have not met our regulatory oversight, compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, and restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation.
Our officers, directors, employees, and large shareholders may encounter potential conflicts of interests with respect to their positions or interests in certain crypto assets, projects, entities, and other initiatives, which could adversely affect our business and reputation.
Certain of our officers, directors, and employees are involved with or active investors in certain digital asset-related businesses, such as cryptocurrency miners, as well as active investors in digital asset projects themselves, and may make investment decisions that favor projects that they have personally invested in. Our largest stockholders may also make investments in these digital asset projects. Similarly, certain of our directors, officers, employees, and large stockholders may hold cryptocurrencies that we are considering supporting and may be more supportive of such listing notwithstanding legal, regulatory, and other issues associated with such cryptocurrencies. While we have instituted policies and procedures to limit and mitigate such risks, there is no assurance that such policies and procedures will be effective, or that we will be able to manage such conflicts of interests adequately. If we fail to manage these conflicts of interests, or we receive unfavorable media coverage with respect to actual or perceived conflicts of interest, our business may be harmed and the brand, reputation and credibility of our company may be adversely affected.
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Additionally, we frequently engage in a wide variety of transactions and maintain relationships with a significant number of other firms in the broad economy surrounding Bitcoin, blockchain and other crypto assets. These transactions and relationships could create potential conflicts of interests in management decisions that we make. For instance, certain officers, directors, and employees of the Company are active investors in crypto projects themselves, and may make investment decisions that favor projects that they have personally invested in. Many of our large shareholders also make investments in these crypto projects.
If we fail to manage these conflicts of interests, our business may be harmed and the brand, reputation and credibility of our company may be adversely affected.
We depend heavily on our senior management, including our Chief Executive Officer. The ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so may adversely affect our revenues and as a result could materially adversely affect our business, financial condition and results of operations.
We must retain the services of our key employees and strategically recruit and hire new talented employees. Our future business and results of operations depend in significant part upon the continued contributions of our senior management personnel, particularly our Chief Executive Officer, Matias Goldenhörn. If we lose his services or if he fails to perform in his current position, or if we are not able to attract and retain skilled personnel as needed, our business could suffer. Significant turnover in our senior management could significantly deplete our institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key personnel in managing our operations, product development, marketing and sales aspects of our business, any part of which could be harmed by turnover in the future.
Moving forward, should the services of Mr. Goldenhörn be lost for any reason, we will incur costs associated with recruiting replacements and any potential delays in operations which this may cause. If we are unable to replace such individual with a suitably trained alternative individual(s), we may be forced to scale back or curtail our business plan.
Risks Associated with Our Governing Documents and Nevada Law
Our Second Amended and Restated Articles of Incorporation provide for indemnification of officers and directors at our expense, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.
Our Second Amended and Restated Articles of Incorporation provide for us, to the fullest extent permitted by the Nevada Revised Statutes (NRS) and other applicable law, to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which the NRS permits the Company to provide indemnification).
Notwithstanding the above, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Company), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder.
These indemnification obligations may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.
We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the reasonable opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares.
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Our board of directors can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change of control of our company more difficult even if it might benefit our stockholders.
Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Shares of preferred stock may be issued by our board of directors without stockholder approval, with voting powers and such preferences and relative, participating, optional or other special rights and powers as determined by our board of directors, which may be greater than the shares of common stock currently outstanding. As a result, shares of preferred stock may be issued by our board of directors which cause the holders to have majority voting power over our shares, provide the holders of the preferred stock the right to convert the shares of preferred stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock stockholders and/or have other rights and preferences greater than those of our common stock stockholders including having a preference over our common stock with respect to dividends or distributions on liquidation or dissolution.
Investors should keep in mind that the board of directors has the authority to issue additional shares of common stock and preferred stock, which could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred stock which we may issue may be exacerbated given the fact that such preferred stock may have voting rights and/or other rights or preferences which could provide the preferred stockholders with substantial voting control over us and/or give those holders the power to prevent or cause a change in control, even if that change in control might benefit our stockholders. As a result, the issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease.
Our Second Amended and Restated Articles of Incorporation contain a specific provision that limits the liability of our directors and officers and requires us, under certain circumstances, to indemnify officers, directors and employees.
The limitation of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights to them may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.
Anti-takeover provisions in our Second Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws, as well as provisions of Nevada law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our securities.
Our Second Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, and Nevada law contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for our securities. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions:
| · | the removal of directors only with the approval of shareholders holding at least two-thirds of the voting power of the issued and outstanding stock entitled to vote in the election of directors; | |
| · | authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and | |
| · | limiting the liability of, and providing indemnification to, our directors and officers. |
Any provision of our Second Amended and Restated Articles of Incorporation or Amended and Restated Bylaws, or Nevada law that has the effect of delaying or deterring a change in control could limit the opportunity for our shareholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
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We will indemnify and hold harmless our officers and directors to the maximum extent permitted by Nevada law.
Our bylaws provide that we will indemnify and hold harmless our officers and directors against claims arising from our activities, to the maximum extent permitted by Nevada law. In addition, if we are called upon to perform under our indemnification agreements entered into with each one of our directors, then the portion of our assets expended for such purpose would reduce the amount otherwise available for our business.
Risks Related to SEC Reporting and Public Company Status
We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.
Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. As of December 31, 2025, our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures were not effective. Separately, in connection with the preparation of the Company’s consolidated financial statements as of December 31, 2024, 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.
As of December 31, 2024, 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.
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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. In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or facilitate the fair presentation of our financial statements or our periodic reports filed with the SEC.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and, for as long as we continue to be an “emerging growth company,” we currently take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements (provided that we are not currently required to file proxy statements), and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth until December 31, 2030, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.2357 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior December 31st, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior December 31st. To the extent we take advantage of such reduced disclosure obligations, it may also make a comparison of our financial statements with other public companies difficult or impossible.
After we are no longer an “emerging growth company,” we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict or estimate the number of additional costs we may incur or the timing of such costs.
Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of the Sarbanes-Oxley Act, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.
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We do not currently have an independent audit or compensation committee. As a result, directors have the ability, among other things, to determine each other’s level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand.
Being a public company results in additional expenses, diverts management’s attention and could also adversely affect our ability to attract and retain qualified directors.
As a public reporting company, we are subject to the reporting requirements of the Exchange Act. These requirements generate significant accounting, legal and financial compliance costs and make some activities more difficult, time-consuming or costly and may place significant strain on our personnel and resources. The Exchange Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to establish the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight are required.
As a result, management’s attention may be diverted from other business concerns, which could have an adverse and even material effect on our business, financial condition and results of operations. These rules and regulations may also make it more difficult and expensive for us to obtain director and officer liability insurance. If we are unable to obtain appropriate director and officer insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent, could be adversely impacted.
We incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.
As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
If our estimates or judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve the identification of performance obligations in revenue recognition, evaluation of tax positions, and crypto assets we hold, among others. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our common stock.
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Risk Factors Related to Ownership of Our Common Stock
The market price of our common stock has been volatile in the past and may continue to be volatile and could decline significantly and rapidly.
The market price of our common stock has in the past been, and in the future may continue to be subject to wide fluctuations in response to factors beyond our control, including:
| · | the number of shares of common stock publicly owned and available for trading; | |
| · | overall performance of the equity markets or publicly-listed financial services, cryptocurrency and technology companies; | |
| · | our actual or anticipated operating performance and the operating performance of our competitors; | |
| · | changes in the projected operational and financial results we provide to the public or our failure to meet those projections; | |
| · | failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; | |
| · | any major change in our board of directors, management or key personnel; | |
| · | the highly volatile nature of the digital financial system and the prices of cryptocurrencies; | |
| · | rumors and market speculation involving the digital financial system or us or other companies in our industry; | |
| · | announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; and | |
| · | other events or factors, including those resulting from political instability, and acts of war, or terrorism, or responses to these events, including the current conflict in Ukraine. |
In addition, broad market and industry fluctuations, as well as general macroeconomic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
Because of the speculative nature of investment risk, you may lose your entire investment.
An investment in the Company’s securities carries a high degree of risk and should be considered as a speculative investment. The Company has a limited operating history, has not paid dividends and is highly unlikely to pay dividends in the immediate or near future. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. An investment in the Company’s securities may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an investment in the Company.
Future sales of our common stock, other securities convertible into our common stock, or preferred stock could cause the market value of our common stock to decline and could result in dilution of your shares.
Our Board of Directors is authorized, without shareholder approval, to cause us to issue additional shares of our common stock or to raise capital through the creation and issuance of preferred stock, other debt securities convertible into common stock, options, warrants and other rights, on terms and for consideration as our Board of Directors in its sole discretion may determine.
If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could decrease significantly. The perception in the public market that our stockholders might sell shares of our common stock could also depress the market price of our common stock.
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If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly.
We cannot predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the value of our common stock. Sales of substantial amounts of our common stock by large stockholders, or the perception that such sales could occur, may adversely affect the market price of our common stock.
The market price for shares of our common stock may drop significantly when such securities are sold in the public markets. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.
Our founders, single major shareholder, and director control, and may may exert substantial influence over us, and their interests may differ from those of other stockholders..
Our founders, include Eric Gravengaard, who beneficially owns 27.5% of our outstanding shares of common stock, and Tom Kerestes, who beneficially owns 10.5% of our outstanding shares of common stock. Michael Komaransky is the single major shareholder who beneficially owns 37.1% of the Company.
By contrast, our directors and executive officers as a group beneficially own approximately 1.5% of our outstanding common stock.
Our majority stockholders may have interests, with respect to their common stock, that are different from other holders of our common stock and the concentration of voting power held by our majority stockholders may have an adverse effect on the price of our common stock.
As a result of their substantial ownership positions, these stockholders, acting individually, have significant influence over matters requiring stockholder approval and, if they were to act together, would be able to control the outcome of substantially all matters submitted to our stockholders for approval. Such matters may include the election and removal of directors, amendments to our certificate of incorporation and bylaws, approval of mergers, consolidations or other business combinations, the sale of all or substantially all of our assets, and other significant corporate transactions. The interests of these stockholders may differ from, or conflict with, the interests of our other stockholders.
Although these stockholders are not currently party to any voting agreement or other arrangement and are not presently acting as a “group” within the meaning of Section 13(d)(3) of the Exchange Act, they may decide to act together in the future. If they were to do so, they would likely be able to effectively control our company and significantly influence our management and affairs. This concentration of ownership could delay, deter or prevent a change in control, discourage potential acquirers from making an offer to purchase our company, or otherwise adversely affect the market price of our common stock.
In addition, this concentration of ownership may make our common stock less attractive to certain investors and could result in reduced trading liquidity or increased volatility in the market price of our common stock.
Our securities are “Penny Stocks” that may make them less desirable or accessible by investors or potential investors.
Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer must approve a person’s account for transactions in penny stocks; and (b) the broker or dealer must receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Securities analysts may not cover, or continue to cover, our common stock and this may have a negative impact on the market price of our securities.
The trading market for our common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We currently have no independent analysts that cover our common stock, and if any analysts do cover our common stock, they may discontinue coverage of our common stock at any time. Further, we may not be able to obtain additional research coverage by independent securities and industry analysts. If no independent securities or industry analysts continue coverage of us, the trading price for our common stock could be negatively impacted. If one or more of the analysts who cover us downgrades our common stock, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our stock price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.
We have never paid dividends on our common stock and have no plans to do so in the future.
Holders of shares of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. To date, we have paid no cash dividends on our shares of common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have, will be in the form of appreciation, if any, in the market value of their shares of common stock.
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The Company and its common stock may be negatively affected if any of the Company’s restricted securities are resold without registration or an available exemption from registration requirements under the Securities Act.
On March 17, 2022, the Company learned that 1,000,000 shares of its restricted common stock owned by an existing shareholder were transferred by its transfer agent to another party. Such shares were subsequently deposited by a new holder into Depository Trust Company and some portion of said shares (approximately 50%) have been sold on the trading market. Our stock certificates representing restricted shares of common stock carry a legend that states that such shares “have not been registered under the Securities Act, and may not be sold, transferred, or otherwise disposed unless, in the opinion of counsel satisfactory to the issuer, the transfer qualifies for an exemption from or exemption to the registration provisions thereof.” The transfer took place without the Company’s knowledge, approval or required authorization. The Company immediately notified the relevant parties to cease any sales of such shares into the public market and has been assured by the new holder that no shares will be sold pending the Company’s ongoing investigation. The Company believes that even though it was an unusual event (and the Company took immediate remedial steps to ensure that the resale of such shares was immediately ceased and prevented in the future, including termination of its transfer agent), any future sale of restricted and unregistered securities without registration or an available exemption can expose the Company and its common stock to the number of adverse consequences, including: (i) regulatory scrutiny, investigations, enforcement or other actions, potentially preventing or delaying us from offering our shares or trading our stock, which could negatively impact an investment in our common stock; (ii) decline or volatility of the market price of our common stock as a result of sales of a material number of shares of our common stock in the thinly trading public market, or (iii) securities litigation targeting the Company which could result in substantial costs and which could harm our business.
Certain previously registered shares of our common stock are required to be sold at fixed prices until such time as our common stock is quoted on the OTCQX, or the OTCQB, operated by OTC Markets, or listed on any national securities exchange or automated interdealer quotation system, if ever, which may result in our common stock not significantly increasing above those fixed prices and have other negative effects on our common stock.
The Company has previously obtained effectiveness of two resale registration statements on Form S-1, one which became effective on May 14, 2025, relating to the resale of 34.65 million shares of common stock by the selling stockholders named therein (the “May 2025 Registration Statement”); and one which became effective on July 2, 2025, relating to the resale of 473.87 million shares of common stock by the selling stockholders named therein (the “July 2025 Registration Statement”). Until such time as our common stock is quoted on the OTCQB or OTCQX tiers of the OTC Markets, or listed on a national securities exchange or an automated interdealer quotation system (including Nasdaq), if ever, selling stockholders may only sell shares of our common stock under the May 2025 Registration Statement at a fixed price of $0.05 per share and selling stockholders may only sell shares of our common stock under the July 2025 Registration Statement at a fixed price of $0.0493 per share. As a result, such selling stockholders will be unable to sell their shares at market prices above the fixed prices, which could discourage sales activity and reduce overall trading volume in our stock.
This limitation may artificially cap the market price of our common stock and create downward pressure on the trading price, particularly if market participants anticipate future selling activity at the fixed prices. Even if our common stock is trading above the $0.05/$0.0493 fixed sales prices, the continued offering of shares at those prices could result in the market price drifting back toward or remaining near the fixed price until such time as the restrictions are lifted, if ever. This could adversely affect investor perception, limit price appreciation, and impair our ability to raise capital at more favorable valuations.
In addition, the presence of a fixed-price offering could create disincentives for investor participation in the public market, reduce liquidity, and increase volatility. There is also no assurance as to when or if our common stock will be quoted or listed on a higher-tier market, and the longer this restriction remains in place, the greater the potential impact on the trading price and stability of our common stock.
There is a significant liquidity risk associated with an investment in our common stock.
The shares of our common stock we may issue in the future and the options, warrants and other convertible securities we may issue in the future may have an adverse effect on the market price of our common stock and cause dilution to investors.
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We may issue shares of common stock and warrants to purchase shares of common stock pursuant to private offerings and we may issue options to purchase shares of common stock to our executive officers and employees pursuant to their employment agreements. The sale, or even the possibility of sale, of shares pursuant to a separate offering or to executive officers and employees could have an adverse effect on the market price of our common stock or on our ability to obtain future financing.
Our Common Stock is subject to liquidity risks.
Our Common Stock is quoted on the OTC ID Tier of the OTC Markets under the symbol “ABIT”. The high and low sales prices of our common stock over the prior 52 weeks was approximately $0.0945 and $0.0038, respectively. As of the date of this Report, our Common Stock is quoted on the OTC ID, and it is not otherwise regularly quoted on any other over-the-counter market or exchange.
The OTC ID tier is a significantly less liquid market than a national securities exchange such as the New York Stock Exchange or Nasdaq. Trading in securities quoted on the OTC Markets is often limited and sporadic, with low daily trading volumes, significant price volatility, and wide bid-ask spreads. As a result, stockholders may find it difficult to sell their shares at desired times or prices, or at all. Limited liquidity may also contribute to substantial fluctuations in the market price of our Common Stock, which may not be related to our operating performance or financial condition.
Because of these factors, investors in our Common Stock may experience difficulty in reselling their shares and may incur substantial losses if they need to sell their shares at a time when market demand is limited.
General Risk Factors
We may engage in acquisitions, mergers, strategic alliances, joint ventures, and divestures that could result in results that are different than expected.
In the normal course of business, we engage in discussions relating to acquisitions, equity investments, mergers, strategic alliances, joint ventures, and divestitures. Such transactions are accompanied by a number of risks, including the use of significant amounts of cash, potentially dilutive issuances of equity securities, incurrence of debt on potentially unfavorable terms, accruement of impairment expenses related to goodwill and amortization expenses related to other intangible assets, the possibility that we overpay for an acquisition relative to the economic benefits that we ultimately derive from such acquisition, and various potential difficulties involved in integrating acquired businesses into our operations.
Global economic conditions could materially adversely affect our business, results of operations, financial condition and growth.
Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect our operations, expenses, access to capital and the market for our ATMs and/or Bitcoin in general. In addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on our expected funding sources, suppliers and partners. A downturn in the economic environment could also lead to limitations on our ability to issue new debt; reduced liquidity; and declines in the fair value of our financial instruments. These and other economic factors could materially adversely affect our business, results of operations, financial condition and growth.
Regulatory developments and government action on climate change issues may drive medium-to-long term increases in our operational costs.
Our business operations and financial condition are subject to regulatory developments and government action on climate change. Governments across the world are responding to climate change by adopting ambitious climate policies as public awareness of and concern about climate change continues to grow. Government climate policies include the enactment of circular economy regulations, regulating greenhouse gas (“GHG”) emissions, carbon pricing and increasing energy and fuel costs. Increased fuel and energy prices and taxes and pricing of GHG emissions could make it more expensive for us to power our networks and operations and may also result in our being subject to carbon emission taxation, which would drive medium-to-long term increases in our operational costs. In addition, there are initial capital costs that we will have to incur as we transition towards the use of renewable energy across our operations.
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There could also be medium-to-long-term increases in our operational costs due to changing levels of precipitation, increased severity and frequency of storms and other weather events, extreme temperatures and rising sea levels, which could cause potential damage to vital infrastructure and utilities. Increased risk of flooding to low-lying facilities and infrastructure due to longer-term increases in precipitation patterns could increase operating costs to maintain and/or repair facilities and network equipment. Decreased precipitation and rising and extreme temperatures could generate drought conditions that could create an increased burden to local power and water resources, which are required to operate our cooling infrastructure. In addition, these climate change impacts could also result in drops in productivity or increased operational costs for our vendors, which, in turn, may be passed on to us, which could harm our business, financial condition, results of operations, cash flows or prospects.
Our business could be adversely affected by security threats, including cybersecurity threats.
We face various security threats, including cybersecurity threats to gain unauthorized access to our sensitive information, to seek initiation of unauthorized fund transfers, or to render our information or systems unusable, and threats to the security of our facilities and infrastructure or third-party facilities and infrastructure. The potential for such security threats subjects our operations to increased risks that could have a material adverse effect on our business, financial condition and results of operations.
Our implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for our information, systems, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to our business and operations, as well as data corruption, reputational damage, communication interruptions or other disruptions to our operations, which, in turn, could have a material adverse effect on our business, financial position and results of operations.
Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our previously filed financial statements, which could cause our stock price to decline.
We prepare our consolidated financial statements in accordance with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
Identifying, assessing, and managing material risks associated with “cybersecurity threats,” as such term is defined in Item 106(a) of Regulation S-K, is important to Athena Bitcoin. Among the risks we strive to address and mitigate are the disruption of our business operations and the loss of personal and confidential data due to cybersecurity incidents, fraud, or extortion.
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We
Our cybersecurity threat
and risk management processes also involve assessing third-party risks. We maintain a Vendor Management Policy pursuant to which we assign
a risk rating and assess third-party risks by conducting cybersecurity due diligence on our vendors, suppliers, and other entities with
whom we do business. Due diligence includes, as appropriate, either requiring proof of security standard compliance or satisfactory responses
to our Vendor Assessment Security Questionnaire. We also evaluate the cyber practices of, and cybersecurity risks associated with, the
Although we constantly evaluate cyber risks, we are unaware of any prior cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial conditions.
Item 2. Properties
We lease approximately 5,075 square feet of space in Miami, Florida, located at 1 S.E. 3rd Avenue, Miami, Florida 33131. Monthly lease payments for the Miami office are currently approximately $22,000, and the rental cost increases yearly to approximately $25,500 through the end of the lease term, December 31, 2029. We also pay our portion of shared expenses of the property.
The Company has short-term storage, office, and warehousing contracts in Illinois and Florida for approximately 1,750 square feet. We also lease approximately 3,650 square feet of space in El Salvador with monthly lease payments of approximately $7 thousand.
We maintain international offices or co-working facilities in Colombia and Argentina.
We believe we will be able to obtain additional space on commercially reasonable terms.
Item 3. Legal Proceedings
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 $3.0 million 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 $1.6 million and Lozano transferred the ownership of XPay Assets to the Company. Lozano alleges breach of contract, promissory estoppel, unjust enrichment, fraud in the inducement and conversion. He asserts the claim for failure to compensate Lozano pursuant to the terms of the purchase price provided in the non-binding letter of intent (and the unsigned draft letter of intent), which includes the remaining amount of the purchase price ($1.4 million) and 270,000,000 shares of the Company’s common stock. Lozano did not offer any evidence of a signed and binding acquisition agreement. The claim also seeks an award for legal and other costs relating to the proceeding.
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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 proceeded to file its counter-complaint against Plaintiff who presented his answer on October 6, 2024. The potential loss related to the identified claim is between $0 and $1.4 million and the issuance of 270,000,000 shares of common stock valued at $27.0 million, the amount of damages that Lozano is seeking in the lawsuit. The additional costs mentioned in the claim are not able to be estimated at this time. The Company does not believe that it is probable that liability has been incurred as of December 31, 2025 and December 31, 2024, related to this lawsuit. Currently, trial is scheduled for March 21, 2026.
On June 21, 2024, Digital Access, LLC, a Michigan limited liability company (“Digital Access”) and two additional co-defendants, filed a complaint against Athena before the US District Court for the Eastern District of Michigan. The complaint alleges tortious interference with business relationships and business expectancy, statutory and common law conversions, and trespass to chattels and seeks injunctive relief. The case was removed to the U.S. District Court for the Northern District of Indiana. Although the Company did not believe that there was any merit to the allegations against it, a mutually acceptable settlement was reached by the parties that concluded the case. The parties completed the agreement and its requirements. The corresponding court entered an Order of Dismissal on March 25, 2025.
On August 20, 2024, Keon Jackson (“Jackson”), an individual, commenced what was entitled as a “Class Action Complaint” against Athena, filed at the US District Court for the Northern District of Florida (the “Court”). The complaint alleges receipt of unwanted telemarketing text messages in contravention to 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 did grant Jackson’s summary judgment under the Florida Telephone Solicitation Act (“FTSA”), in 4,512 instances and where this statute establishes a penalty of $500 per instance. The Court did not adjudicate at that time if violations occurred under the federal Telephone Consumer Protection Act of 1991 (“TCPA”), and such question will be decided in a trial on the merits. However, on December 22, 2025 the parties signed a Settlement Terms Sheet with a structured settlement with a total payment of $4.5 million which is currently subject to preliminary and final Court approval.
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 at the Common Pleas Court at Cuyahoga County, Ohio. The complaint against Company alleges negligence and violations to the Ohio Products Liability Act because of alleged elder financial scams involving cryptocurrency and the operation of 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 (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) 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. But the case has been 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 alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. 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 already Athena has in place. The claim by Carew against Athena is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief.
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After removing the case to Federal Court, the case got 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.
The Company disputes the claims and believes that the allegations are based on flawed legal theories and incorrect factual assumptions, and the Company intends to vigorously defend itself against these claims and allegations including the possibility of asserting counterclaims against Carew. Although the outcome of any litigation is inherently uncertain and may be materially adverse, based on current information, our management does not expect this litigation 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”), filed a complaint that includes class action allegations, against Athena, and two other retail establishments as defendants, filed at Colorado’s Arapahoe County District Court. The complaint against the Company alleges negligence and violations to various Colorado statutes such as its consumer protection act, civil theft, 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 to what the Company already has in place. The claim by Yilma against the Company is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) 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 obligatory arbitration on August 13, 2025. Yilma initiated the arbitration proceedings under JAMS as established in Athena’s Terms of Service. In 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 thousand 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. Therefore, the Company’s assessment of this case at this time is there is no liability by Athena.
No actions have been served upon Athena pertaining to any lawsuit that may have been filed by Odoms. However, the statute of limitation for a tort action in the State of Florida is 2 years, if not properly tolled. Thus, Odoms still has at least a year to file any judicial claims against Athena.
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 at the Circuit County Court of Montgomery in Maryland. The complaint was served upon Athena on March 24, 2025. The complaint against Athena alleges violations to Maryland’s Safe Act, negligence, product liability because of defective design, and violation of the State’s Consumer Protection Act. Similar to the previous akin cases, (i.e., the cases above of S.M. filed on September 9, 2024 and Girma Yilma filed on January 21, 2025) but using a different law firm this time, 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 (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) 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.
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On February 26, 2025, the State of Iowa through its Attorney General (“Iowa”), filed separate complaints against Athena 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 to 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 thousand per violation of the Consumer Fraud Act because of any misrepresentation, deception or unfair practices. Additionally, it demands the reimbursement of funds of the full transaction to defrauded victims, and a penalty of $5.0 million 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 (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) 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 has requested the removal of the case to the US District Court for the District of New Jersey. However, Gnadinger has moved to request the case be remanded back to the State Court in a September 15, 2025 filing. Therefore, at this time, the parties continue to await the Federal Court’s decision to remand or not the case to the State Court. Once the decision is made, remanded or not, Athena will then move to request that two of the claimants be compelled to arbitrate in accordance to the Terms of Service in effect at the time of their transactions.
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 CCPA; 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 transmissions in the District of Columbia until Athena has required licenses; order Athena to pay damages and restitution for the entire transaction amounts it is alleged to have 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 $10,000 for each violation of the Financial Exploitation Act; award civil penalties of $5,000 for each violation of the CPPA; and award the District the costs of the action and reasonable attorneys’ fees. On October 31, 2025, Athena Bitcoin filed a motion to dismiss and is currently awaiting the Court’s decision after the matter has been fully briefed by all the parties involved and a hearing is scheduled for March 17, 2026, for its oral arguments.
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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 $9 million for the kiosks and associated software, which AML claims improperly included its proprietary source code.
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 Athena Bitcoin in the United States District Court for the Southern District of Florida. The complaint names only Athena Bitcoin 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 Athena Bitcoin 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. As of the date of this letter, Athena Bitcoin has engaged counsel and is moving to file an initial motion to dismiss the case. Still, at this early stage, Athena Bitcoin is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.
We believe we have strong arguments against these open claims and litigation matters and plan to defend ourselves vigorously in these matters.
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.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information for Common Stock
Our common stock is currently quoted on the OTCID Market operated by OTC Markets Group, Inc. under the symbol “ABIT”. The sale prices of our common stock on the OTCID Market are insignificant and therefore, do not represent a reliable indication of the fair market value of these shares. The following table sets forth the high and low closing-bid quotations for our common stock as reported on the OTC Pink Market for the periods indicated. These quotations reflect inter-dealer prices, without retail mark up, mark down or commission and may not necessarily represent actual transactions. The OTC Markets Quotation System is a quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities. The market is limited for our stock and any prices quoted may not be a reliable indication of the value of our shares of common stock.
| For the year ended December 31, 2024 | High | Low | ||||||||
| First Quarter | $ | 0.340 | $ | 0.0801 | ||||||
| Second Quarter | $ | 0.151 | $ | 0.0676 | ||||||
| Third Quarter | $ | 0.080 | $ | 0.0363 | ||||||
| Fourth Quarter | $ | 0.264 | $ | 0.0208 | ||||||
| For the year ended December 31, 2025 | High | Low | ||||||||
| First Quarter | $ | 0.105 | $ | 0.0225 | ||||||
| Second Quarter | $ | 0.075 | $ | 0.0300 | ||||||
| Third Quarter | $ | 0.065 | $ | 0.0121 | ||||||
| Fourth Quarter | $ | 0.038 | $ | 0.0067 | ||||||
Holders of Record
As of March 6, 2026, we had 4,095,009,545 shares of our common stock issued and outstanding held by approximately 185 shareholders of record. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Dividends
We have not paid, nor declared any cash dividends since our inception and do not intend to declare or pay any such dividends in the foreseeable future as we intend to retain any earnings for use in our business. Any future determination to pay dividends will be at the discretion of our Board of Directors, subject to limitations imposed by state law.
Prior to November 24, 2025, the terms of the Senior Secured Loan Agreement related to the Amended and Restated Convertible Debenture dated May 15, 2023 precluded us from paying dividends without the written consent of KGPLA, until such time as our $3.0 million Secured Convertible Debenture is paid in full. As of November 24, 2025, the debenture was paid in full.
Securities Authorized for Issuance Under Equity Compensation Plans
For certain information concerning securities authorized for issuance under our equity compensation plan, see Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities
None.
Issuer Purchases of Equity Securities
None
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Item 6.
[Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking statements
The following discussion of the Company’s historical performance and financial condition should be read together with the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplemental Data” of this Report. This discussion contains forward-looking statements based on the views and beliefs of our management, as well as assumptions and estimates made by our management. These statements by their nature are subject to risks and uncertainties, and are influenced by various factors. As a consequence, actual results may differ materially from those in the forward-looking statements. See “Item 1A. Risk Factors” of this Report for the discussion of risk factors and see “Cautionary Statement Regarding Forward-Looking Statements” for information on the forward-looking statements included below.
Summary of Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations
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:
| · | Overview. Discussion of our business and overall analysis of financial and other highlights affecting us, to provide context for the remainder of MD&A. | |
| · | Results of Operations. An analysis of our financial results comparing the twelve-month periods ended December 31, 2025 and 2024. | |
| · | Liquidity and Capital Resources. An analysis of changes in our 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. |
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.
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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 33 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 December 31, 2025.
ATMs BY COUNTRY AND TYPE
| Country | Number of Athena Bitcoin ATMs (as of December 31, 2025) |
Type of Fiat Currency | |
| Total | Two-Way | ||
| United States | 2,903* | - | U.S. Dollar |
| El Salvador | 27 | 24 | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| Total | 2,953 | 47 | |
*Excludes Chivo-branded Bitcoin ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service.
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 years ended December 31, 2025 and 2024, we completed 213,683 and 185,789 transactions in Bitcoin through our Bitcoin ATMs, respectively.
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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 years ended December 31, 2025, and 2024, the average markup on Bitcoin sold was 24% and 22%, 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 $2,000 per transaction (maximum of $1,000 in California). We replenish or withdraw fiat currencies at our Bitcoin ATMs twice a week or depending on usage, using bonded security companies.
Between January 1, 2022, and December 31, 2025, Bitcoin’s price exhibited significant fluctuations. In early 2022, Bitcoin’s price was around $47,459 by the end of March, before declining to approximately $29,000 by May 11, 2022. The downward trend continued, with the price falling below $23,000 in June 2022. By the end of 2022, Bitcoin’s price was under $20,000. In 2023, Bitcoin’s price rose consistently, ending the year at $42,258. In 2024, Bitcoin’s price continued to rise, reaching a then all-time high of $106,147 on December 17, 2024. By December 31, 2024, the price was approximately $93,425. As of February 20, 2026, the price of Bitcoin was $67,711 and as of December 31, 2025, the price of Bitcoin was $87,711. On August 14, 2025, Bitcoin reached an all-time high price of $124,457. Refer below for a graph from statista.com of the price of bitcoin from January 1, 2022 through December 31, 2025. This shows the fluctuations of the price of bitcoin over time.
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BITCOIN PRICE
*Through February 1, 2026
Bitcoin closing prices every 3 months from January 1, 2022 through February 1, 2026. Data source: Stooq Bitcoin historical quarterly data.
We believe that we are in the early stages of the new digital financial order system and that as crypto asset use cases expand and there is more worldwide adoption, the fluctuations in volume and price will decrease. Our focus is on prioritizing growth, especially in geographic areas where consumers are restricted from accessing the global financial system.
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The Company has been active in increasing its geographic presence by expanding its Athena Bitcoin ATM Fleet. Refer below for a chart showing the active Athena Bitcoin ATMs from December 31, 2017, through December 31, 2025.
TOTAL ACTIVE ATMS OVER TIME
Number of Bitcoin ATMs by Year
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| # of Bitcoin ATMs | 65 | 64 | 59 | 137 | 392 | 445 | 1,829 | 3,111 | 2,953 |
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ATMs, by location, are presented below as of December 31, 2025.
ATMs BY LOCATION
| Country |
Number of Athena Bitcoin ATMs (as of December 31, 2025) |
Type of Fiat Currency | |
| Total | Two-Way | ||
| United States | 2,903* | - | U.S. Dollar |
| El Salvador | 27 | 24 | U.S. Dollar |
| Argentina | 6 | 6 | Argentine peso |
| Colombia | 15 | 15 | Colombian peso |
| Mexico | 2 | 2 | Mexican peso |
| TOTAL | 2,953 | 47 | |
*Excludes Chivo-branded ATMs which the Company operates on behalf of the Government of El Salvador for Chivo as white-label service.
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, as part of its strategy to expand globally, began working with the Government of El Salvador in late June 2021 to support the implementation of its Bitcoin Law. 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 years 2024, 2025 or during 2026 to date. The Company provided no services related to the Chivo ecosystem in fiscal years 2024, 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. In 2021, the Company agreed to develop the Chivo Ecosystem for El Salvador. The Chivo Ecosystem acts as the interface to El Salvador’s Bitcoin Digital Wallet for El Salvador and its users. The Company’s contract to develop the Chivo Ecosystem ended December 31, 2021.
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The Company, due to contingencies related to not having title of the intellectual property in 2021 that serves as the foundation of the Chivo Ecosystem, did not recognize revenue in 2021. The contingency was lifted in 2022 when the Company obtained the right to use the intellectual property. The Company recognized revenue related to the development of the Chivo Ecosystem when the contingency was lifted. The Company anticipates no further revenue related to the Chivo intellectual property and ecosystem.
Key Performance Indicators and Non-GAAP Financial Measure and Trends
Athena Bitcoin ATMs
The number of Athena Bitcoin ATMs decreased from 3,111 to 2,953 or 5% from December 31, 2024 to December 31, 2025.
Transactions
Median ATM transaction size for Bitcoin decreased from $150 to $105, or 30% while the number of transactions increased from 185,789 to 213,683, or 13% during the twelve months ended December 31, 2024 and 2025, respectively.
Median OTC transaction size for all crypto assets decreased from $40,661 to $12,290 or 70% while the number of transactions increased from 83 to 288 or 247% during the twelve months ended December 31, 2024 and 2025, respectively.
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); one-time expenses (loss on extinguishment of debt and credit loss); 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)
Year Ended December 31, 2025 | Year Ended December 31, 2024 | |||||||
| Net (loss) income | $ | (6,034 | ) | $ | 10,284 | |||
| Adjusted to exclude the following: | ||||||||
| Interest expense | 745 | 1,884 | ||||||
| Fees on virtual vault services | 1,580 | 2,059 | ||||||
| Income tax (benefit) expense | (655 | ) | 4,733 | |||||
| One-time expenses | ||||||||
| Loss on extinguishment of debt | 5,283 | – | ||||||
| Credit loss | – | 798 | ||||||
| Depreciation and amortization | 9,506 | 5,173 | ||||||
| Adjusted EBITDA | $ | 10,425 | $ | 24,931 | ||||
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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 market | |
| · | 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 $250,000 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 Stablecoins and they are considered indefinite-lived intangible assets and are initially measured at cost and are not amortized. As intangible assets, Bitcoin and Tether held are initially recorded at cost. However, effective as of January 1, 2025, the Company began measuring crypto assets held at their fair value. The Company determines the fair value of its Bitcoin 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. As of July 19, 2023, the Company only transacts in Bitcoin at its Bitcoin 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 relieves the adjusted cost basis of the crypto asset, net of impairments/unrealized gains and losses, on a first-in, first-out basis 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 years ended December 31, 2025 and 2024, 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 2% and 2% of its revenue from Athena Plus for the years ended December 31, 2025 and 2024, 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 1% and 2% of its revenue from white-label service for the years ended December 31, 2025 and 2024, 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 December 31, 2025, 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 years ended December 31, 2025 and 2024.
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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 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.
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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.
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 consists 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 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
The Company was taxed as a partnership for U.S. federal and state income tax purposes for tax years prior to 2020. There is no provision for income taxes for those years.
For periods after 2020 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 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 consolidated statements of operations and comprehensive income (loss).
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The Company accrues liabilities for uncertain tax positions that are not, more likely than not, to be sustained upon examination as of December 31, 2025 and 2024. Interest and penalties related to uncertain tax positions are recorded in accrued liabilities in the accompanying consolidated balance sheets. The Company had no unrecognized tax benefits as of December 31, 2025 and 2024, that if recognized, would affect its annual effective tax rate.
Results of Operations
The majority of the numbers presented below are rounded numbers and should be considered as approximate.
Comparison of the Years Ended December 31, 2025 and 2024
The table below sets forth, for the periods presented, certain historical financial information.
| For the years ended | ||||||||||||||||
| December 31, 2025 | December 31, 2024 | $ Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenues | $ | 234,597 | $ | 285,391 | $ | (50,794 | ) | (18 | %) | |||||||
| Cost of revenues | 209,759 | 247,391 | (37,632 | ) | (15 | %) | ||||||||||
| Gross profit | 24,838 | 38,000 | (13,162 | ) | (35 | %) | ||||||||||
| Operating expenses: | ||||||||||||||||
| Technology and development | 1,553 | 1,351 | 202 | 15 | % | |||||||||||
| General and administrative | 16,399 | 10,513 | 5,886 | 56 | % | |||||||||||
| Sales and marketing | 1,573 | 1,898 | (325 | ) | (17 | %) | ||||||||||
| Credit loss expense | – | 798 | (798 | ) | (100 | %) | ||||||||||
| Litigation expense | 3,460 | 3,000 | 460 | 15 | % | |||||||||||
| Other operating expense | 836 | 1,149 | (313 | ) | (27 | %) | ||||||||||
| Total operating expenses | 23,821 | 18,709 | 5,112 | 27 | % | |||||||||||
| Income from operations | 1,017 | 19,291 | (18,274 | ) | (95 | %) | ||||||||||
| Interest expense | 745 | 1,884 | (1,139 | ) | (60 | %) | ||||||||||
| Fees on virtual vault services | 1,580 | 2,059 | (479 | ) | (23 | %) | ||||||||||
| Loss on extinguishment of debt | 5,283 | – | 5,283 | 100 | % | |||||||||||
| Other expense | 98 | 331 | (233 | ) | (70 | %) | ||||||||||
| (Loss) income before income taxes | (6,689 | ) | 15,017 | (21,706 | ) | (145 | %) | |||||||||
| Income tax (benefit) expense | (655 | ) | 4,733 | ) | (5,388 | ) | (114 | %) | ||||||||
| Net (loss) income | $ | (6,034 | ) | $ | 10,284 | $ | (16,318 | ) | (159 | %) | ||||||
| Basic (loss) earnings per share | $ | (0.00147 | ) | $ | 0.00251 | $ | (0.00398 | ) | (159 | %) | ||||||
| Diluted (loss) earnings per share | $ | (0.00147 | ) | $ | 0.00236 | $ | (0.00383 | ) | (162 | %) | ||||||
| Weighted average shares outstanding – Basic | 4,095,009,545 | 4,094,816,668 | 192,877 | – | ||||||||||||
| Weighted average shares outstanding – Diluted | 4,095,009,545 | 4,466,443,337 | (371,433,792 | ) | (8 | %) | ||||||||||
| Comprehensive (loss) income | ||||||||||||||||
| Net (loss) income | $ | (6,034 | ) | $ | 10,284 | $ | (16,318 | ) | (159 | %) | ||||||
| Foreign currency translation adjustment, net of tax | (29 | ) | 14 | (43 | ) | (307 | %) | |||||||||
| Comprehensive (loss) income | $ | (6,063 | ) | $ | 10,298 | $ | (16,361 | ) | (159 | %) | ||||||
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Revenues
| Years Ended December 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenue by stream | ||||||||||||||||
| Athena Bitcoin ATM | $ | 226,475 | $ | 274,954 | $ | (48,479 | ) | (18 | %) | |||||||
| Athena Plus (OTC) | 4,336 | 4,977 | (641 | ) | (13 | %) | ||||||||||
| White-label Service | 2,790 | 4,845 | (2,055 | ) | (42 | %) | ||||||||||
| Ancillary and other | 996 | 615 | 381 | 62 | % | |||||||||||
| Total Revenue | $ | 234,597 | $ | 285,391 | $ | (50,794 | ) | (18 | %) | |||||||
Athena Bitcoin ATM Revenue (in thousands except number of Bitcoin ATMs)
Athena Bitcoin ATM revenue decreased $48,479, or 18% from $274,954 to $226,475 during the years ended December 31, 2024 to December 31, 2025, respectively. The decline in revenue is primarily due to decrease of the size of individual transactions, despite an increase in overall transaction volume, driven by economic factors and market volatility. Median transaction size for all crypto assets decreased from $150 to $105, or 30% and the average markup for Bitcoin increased from 22% to 24% during the years ended December 31, 2024 to December 31, 2025, respectively. The number of Bitcoin ATMs decreased from 3,111 to 2,953, or 5% from December 31, 2024 to December 31, 2025, respectively. The number of Bitcoin ATM transactions increased from 185,789 to 213,683 or 15% for the year ended December 31, 2024, compared to the year ended December 31, 2025, respectively.
Athena Plus (in thousands except number of sales transactions)
Athena Plus revenue decreased $641 or 13% from $4,977 to $4,336 for the years ended December 31, 2024 compared to the year ended December 31, 2025, respectively. Median transaction size for all crypto assets decreased from $40,661 to $12,290 or 70% and the number of sales transactions increased from 83 to 228, or 175% over the same periods. Athena Plus revenue is dependent on the demands of certain institutional traders, which vary period to period.
White-Label Service (in thousands)
White-Label Service revenue decreased $2,055 or 42% from $4,845 to $2,790 for the year ended December 31, 2024, compared to the year ended December 31, 2025, respectively. This decrease was driven by a decrease in monthly service fees of the contract during the last quarter ended December 31, 2024.
Ancillary (in thousands)
Ancillary revenue increased $381 or 62% from $615 to $996 from the year ended December 31, 2024 to the year ended December 31, 2025, respectively. This increase is primarily due to the Company recognizing revenues related to transaction fees charged to affiliates. Ancillary revenue also includes non-recurring revenue that is dependent on one-time projects to help develop the crypto ecosystem. As such, the Company anticipates that there may be significant fluctuations in ancillary revenue recognized each period.
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Cost of Revenues and Gross Profit (in thousands except number of Bitcoin ATMs)
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 Bitcoin 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 Bitcoin ATMs from which Bitcoin are sold (including the associated rent expense, related incentives, Bitcoin ATM cash losses, software licensing fees for the ATMs, depreciation, insurance, and utilities), crypto asset (subject to impairment in 2024 and changed to valuation at fair value in 2025) and fees paid to service the ATMs and the transport of cash to the banks. For the years ended December 31, 2025 and 2024, the costs related to the acquisition of Bitcoin sold were $173,834 and $214,723, respectively. Impairment of crypto assets held for the year ended December 31, 2025 and 2024 was $0 and $1,779, respectively. The increase in cost related to acquisition of Bitcoin sold was primarily a result of the increased transactions of Bitcoin. For the year ended December 31, 2025, and 2024, the costs of operating the Bitcoin ATMs were $14.387 and $13,643, respectively. The increase in operating costs was primarily driven by higher servicing and cash logistics costs, including increased cash pickup schedules at higher-volume locations, partially offset by a decrease in the number of ATMs installed during the year, which decreased from 3,111 to 2,953, or 5% from the year ended December 31, 2024 to the year ended December 31, 2025, respectively.
Gross profit decreased $13,162 or 35% and gross profit percentage decreased from 13% to 11%, primarily due to decrease in the revenue transaction size for the year, for the year ended December 31, 2025, compared to the year ended December 31, 2024, respectively.
Operating Expenses (in thousands)
Total operating expenses increased $5,112 or 27% from the year ended December 31, 2024 to the year ended December 31, 2025. A breakdown of total operating expenses are shown below.
OPERATING EXPENSES
| Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Technology and development | $ | 1,553 | $ | 1,351 | $ | 202 | 15 | % | ||||||||
| General and administrative | 16,399 | 10,513 | 5,886 | 56 | % | |||||||||||
| Sales and marketing | 1,573 | 1,898 | (325 | ) | (17 | %) | ||||||||||
| Credit loss | – | 798 | (798 | ) | (100 | %) | ||||||||||
| Litigation expense | 3,460 | 3,000 | 460 | 15 | % | |||||||||||
| Other operating | 836 | 1,149 | (313 | ) | (27 | %) | ||||||||||
| $ | 23,821 | $ | 18,709 | $ | 5,112 | 27 | % | |||||||||
Technology and development expenses increased by $202 or 15% from $1,351 to $1,553 from the year ended December 31, 2024 to the year ended December 31, 2025, respectively, mostly due to development of potential new products and an increase in overhead to support the global expansion of the Athena Bitcoin ATMs.
General and administrative expenses increased by $5,886 or 56%, from $10,513 to $16,399 from the year ended December 31, 2024 to the year ended December 31, 2025, respectively, due mostly to increase in litigation fees along with salaries and benefits to employees.
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Sales and marketing expenses decreased by $325 or 17% from $1,898 to $1,573 from the year ended December 31, 2024 to the year ended December 31, 2025, respectively, due to an decrease in branding, marketing and sales infrastructure and a decrease in marketing and sales personnel, as we have pivoted employees to lower cost environment locations in Latin America, in particular El Salvador.
Credit loss in 2024 of $798 represents the write-off of the receivable from Chivo which was included in the financial settlement of June 2024 whereby all accounts owed between Chivo and the Company, were written off as part of the settlement (see “Contracts with Chivo, Sociedad Anónima de Capital Variable of El Salvador”).
Litigation expense increased by $460 or 15% from $3,000 to $3,460 from the year ended December 31, 2024 to the year ended December 31, 2025, respectively, mostly due to the Company’s accrual for the exposure to litigations (see “Legal Proceedings”).
Interest and Fees (in thousands)
INTEREST AND FEES
| Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Interest expense | $ | 745 | $ | 1,884 | $ | (1,139 | ) | (60 | %) | |||||||
| Fees for virtual vault services | 1,580 | 2,059 | (479 | ) | (23 | %) | ||||||||||
Interest expense decreased $1,139 or 60% from $1,884 to $745 from year-ended December 31, 2024 to year-ended December 31, 2025, respectively, due mostly to a reduction of interest-bearing debt.
Fees for virtual vault services decreased $479 or 23% from $2,059 to $1,580 from year-ended December 31, 2024 to year-ended December 31, 2025, respectively primarily due mostly to the Company’s decrease use of its bank currency availability service which makes funds held in a virtual vault immediately available to the Company.
Loss on extinguishment of debt (in thousands)
During the twelve months ended December 31, 2025, the Company recorded a loss due to the extinguishment of debt of $5,283 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 and $681 of unamortized imputed interest, both of which are included in loss on extinguishment of debt expense in the consolidated statements of operations and comprehensive income (loss).
Income Tax Benefit (Expense) (in thousands)
Income tax expense decreased $5,388 or 114% from $4,733 tax expense to $655 tax benefit from year-ended December 31, 2024 to year-ended December 31, 2025, respectively. The decrease in income tax expense is mainly due to a decrease in income before income taxes, which decreased from income of $15,017 to a loss of ($6,689) from the years ended December 31, 2024 to December 31, 2025, respectively.
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Liquidity and Capital Resources (in thousands)
As of December 31, 2025, and 2024, we had cash balances of $11,376 and $17,506, respectively. The Company also had working capital deficits of $9,235 and $2,506, respectively, largely due to operating lease liabilities, current portion of $8,751 and $9,627 as of December 31, 2025, and 2024, 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 twelve months ended December 31, 2025, the average cash balance was $2.434 per machine in the United States. For the twelve months ended December 31, 2024, the average cash balance was $2.225 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 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 $33,398 for 2026 and $20,757 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 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 consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
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Going Concern and Management Liquidity Plans (in thousands)
As of December 31, 2025, we had an accumulated deficit of $497 and a working capital deficit of $9,235, and for the twelve months ended December 31, 2025, net loss of $6,034 and cash provided by operating activities of $12,618. The accompanying 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 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 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.
Recent Financing Transactions (in thousands)
Equipment notes payable
On September 19, 2024, Athena Bitcoin and Taproot Acquisition Enterprises, LLC, a Delaware limited liability company (“Taproot”), entered into an Omnibus Equipment Refinancing Agreement providing for the refinance of Athena Bitcoin’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 Athena Bitcoin from Taproot. The parties agreed that the total outstanding balance of $2,120 would be paid by one inception payment of $1,158 upon the execution of the agreement and followed by weekly payments of $20 for a period of 48 weeks. The Omnibus Equipment Refinancing Agreement also contains 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 Athena Bitcoin as a purchaser of the equipment. As of December 31, 2025, the outstanding principal was $0 because on September 4, 2025, Athena Bitcoin 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 (see Short-term debt below).
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 downpayment 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.
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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 December 31, 2025, the outstanding principal was $0 because on September 4, 2025, Athena Bitcoin 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 (see Short-term debt below).
Short-term debt
On February 26, 2024, the Company entered into a financing agreement for $170 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 with an annual percentage rate of 7.95%, repayable in ten monthly installments beginning November 11, 2024. As of December 31, 2025 and 2024, the outstanding principal was $0 and $140, respectively.
On December 19, 2024, the Company entered into financing agreements for $116 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 December 31, 2025, and 2024, the outstanding principal was $0 and $116, respectively.
On May 30, 2025, the Company entered into financing agreements for $280 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 December 31, 2025, the outstanding principal was $88.
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 $9,000, consisting of an upfront payment of $3,000 upon execution of the agreement and weekly installments of $115.4 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.
At the date of settlement, the carrying amount of the debt obligation under the Equipment Financing Agreement was $4,300. The Company also recorded the following items associated with the extinguishment of debt:
| a) | $3,200, 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, related to the Location Referral Agreement and Location Agreement Buy-Out, representing the lump-sum buy-out of a referral revenue share obligation. | |
| c) | $1,100, recorded as a settlement premium, representing the excess of the total settlement consideration over the carrying amount of the extinguished obligations. |
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During the twelve months ended December 31, 2025, the Company recorded a loss due to the extinguishment of debt of $5,283 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 and $681 of unamortized imputed interest, both of which are included in loss on extinguishment of debt expense in the consolidated statements of operations and comprehensive income (loss).
As of December 31, 2025, and 2024, the outstanding principal of the Release and Termination Agreement was $4,000 and $0, respectively, which was included in short-term debt in the consolidated balance sheets.
On October 9, 2025, the Company entered into insurance premium financing agreements for $223 (gross premium in the amount of $284 less $61 deposit) with E.T.I. Financial Corporation, to pay the insurance premium on its directors’ and officers’ insurance with an annual interest rate of 9.51% per annum, repayable in ten monthly installments beginning November 11, 2025. As of December 31, 2025, the outstanding principal was $180.
On December 30, 2025, the Company entered into insurance premium financing agreements for $59 (gross premium in the amount of $74 less $15 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 December 31, 2025, the outstanding principal was $59.
Note payable, Related-Party
On May 15, 2023, the Company entered into a Senior Secured Loan Agreement, as amended (the “Loan Agreement”) and Senior Secured Revolving Credit Promissory Note (the “Revolving Credit Note”) with KGPLA, an entity in which Michael Komaransky, a former director and 40.8% beneficial owner of the Company has a controlling interest and serves as Manager of such entity, and whose Chief Investment Officer is Huaxing “Jason” Lu, our director.. The Revolving Credit Note allowed the Company to borrow up to $4,000 for the operations of its New Bitcoin ATM Machines, as defined in the Loan Agreement, with a maturity date of May 15, 2024. Revenue share fees for this agreement were calculated based on a percentage of the gross daily receipts generated from these machines and were recorded as part of interest expense in the consolidated statements of operations and comprehensive income (loss). In connection with the above loan transaction and issuance of Revolving Credit Note, the Company granted KGPLA a first priority lien and security interest in and to all of the Company’s assets, except for property previously pledged to Banco Hipotecario, which has since been repaid in full, and with respect to such assets, the Company granted KGPLA a second priority lien. On March 28, 2024, the Company repaid the principal amount of $4,000 (together fees due) on the Senior Secured Revolving Credit Promissory Note due with KGPLA. The debt was settled in full in accordance with the terms outlined in the Revolving Credit Note and was funded using cash reserves generated from the Company’s operating activities. The early payoff of this debt resulted in the elimination of revenue share fees. As of December 31, 2025, and 2024, the outstanding principal was $0.
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 $3,000, 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 $3,000; 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, 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 $50or 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 owed to KGPLA for a total payment of $3,036, 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 (discussed above in Note payable, Related-Party), the Secured Convertible Debenture with KGPLA (discussed in, Convertible debt, related-party) of 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 December 31, 2025, and 2024, the outstanding principal amount of the debenture was $0 and $3,000, respectively.
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Cash Flows (in thousands)
Twelve months ended December 31, 2025, compared to the twelve months ended December 31, 2024
The following summarizes our cash flow for the year ended December 31, 2025 and 2024:
| Years Ended December 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Net cash provided by operating activities | $ | 12,618 | $ | 17,676 | $ | (5,058 | ) | (29 | %) | |||||||
| Net cash used in investing activities | (3,974 | ) | (9,812 | ) | 5,838 | (59 | %) | |||||||||
| Net cash used in financing activities | (11,077 | ) | (8,610 | ) | (2,467 | ) | 29 | % | ||||||||
| Effect of exchange rate changed | (29 | ) | 14 | (43 | ) | (307 | %) | |||||||||
| Net decrease in cash and cash equivalents | (2,462 | ) | (732 | ) | (1,730 | ) | 236 | % | ||||||||
| Cash and cash equivalents, beginning of period | 17,628 | 18,360 | (732 | ) | (4 | %) | ||||||||||
| Cash and cash equivalents, end of period | $ | 15,166 | $ | 17,628 | $ | (2,462 | ) | (14 | %) | |||||||
Our operating activities provided $12,618 in cash for the twelve months ended December 31, 2025 compared to $17,676 for the twelve months ended December 31, 2024, representing a decrease in cash provided by operating activities of $5,058. The changes in sources of cash from operating activities for the twelve months ended December 31, 2025 are comprised primarily of net loss of $6,034, depreciation and amortization of $9,506, loss on extinguishment of debt of $5,283, accounts payable and other liabilities of $10,544, Bitcoin payments for expenses of $616 and unrealized loss of crypto assets held of $112. The additional sources were offset by uses in cash comprised primarily of crypto assets held of $1,698, accounts receivable of $2,742, Bitcoin received from independent Bitcoin ATM operators of $1,350 and prepaid expense and other assets of $1,173.
Our operating activities for the twelve months ended December 31, 2024, are comprised primarily of net income of $10,284, accounts payable and other liabilities of $7,694, depreciation and amortization of $5,173, Bitcoin payments for expenses of $3,680, and impairment of crypto assets held of $1,779. The additional sources were offset by uses in cash comprised primarily of crypto assets held of $8,335, prepaid expenses and other assets of $2,292, and accounts receivable of $1,512.
Our investing activities used $3,974 and $9,812 in cash for the year ended December 31, 2025, and 2024, for purchases of property and equipment of $1,470 and $6,775 and purchase of capitalized software of $2,504 and $3,037, respectively.
Our financing activities used $11,077 and $8,610 in cash for the year ended December 31, 2025, and 2024, respectively, primarily due to repayment of debt of $3,648 and $4,841, payments in reductions of financing leases of $0 and $1,150 and payments in reduction of equipment notes payable of $8,150 and $3,132, respectively.
Critical Accounting Policies and Estimates
Our consolidated financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these 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 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 audited consolidated financial statements contained herein.
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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 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.
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 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.
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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 consolidated financial statements included herein).
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.
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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.
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 consolidated statements of operations and comprehensive income (loss).
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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 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 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 consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.
ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s 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.
Commitments and Contingencies
We assess legal contingencies in accordance with ASC 450—Contingencies and determines 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 “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 December 31, 2025 and 2024, were $6.4 million and $4.7 million, respectively.
| 108 |
Recently Issued Accounting Standards
Accounting Pronouncement Adopted
In December 2023, the FASB issued ASU 2023-08 “Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60) Accounting for and Disclosure of Crypto Assets”. ASU 2023-08 will require entities to measure crypto assets that meet the scope criteria at fair value and to reflect changes in fair value in net income each reporting period. The amendments in ASU 2023-08 will also require entities to present crypto assets measured at fair value separately from other intangible assets on the balance sheet and changes in the fair value measurement of crypto assets separately from changes in the carrying amounts of other intangible assets on the income statement. The amendments in the ASU are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). The Company adopted this standard and applied the disclosure requirements on a prospective basis effective for the year ended December 31, 2025.
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures (Topic 740)”. The ASU requires companies to break out their income tax expense, income tax rate reconciliation and income tax payments made in more detail. For public companies, the requirements will become effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard retrospectively.
Accounting Pronouncement 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 impact of this guidance on its consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
| 109 |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
| 110 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Athena Bitcoin Global and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Athena Bitcoin Global and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2024.
March 6, 2026
| F-1 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares)
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| 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 | ||||||||
| Property and equipment, net | ||||||||
| Software development, net | ||||||||
| Right of use assets – operating leases | ||||||||
| Other noncurrent 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 | ||||||||
| Equipment notes payable, current portion | ||||||||
| Short-term debt | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | $ | $ | ||||||
| Long-term liabilities: | ||||||||
| Operating lease liabilities, net of current portion | $ | $ | ||||||
| Equipment notes payable, net of current portion | ||||||||
| Deferred tax liabilities, net | ||||||||
| Convertible debt, related-party | ||||||||
| 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 December 31, 2025, and 2024. | ||||||||
| Common stock, $ par value shares authorized; shares issued and outstanding as of December 31, 2025, and 2024. | ||||||||
| Additional paid in capital | ||||||||
| Accumulated (deficit) income | ( |
) | ||||||
| Accumulated other comprehensive loss | ( |
) | ( |
) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-2 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per share amounts)
| For the years ended | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Technology and development | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Credit loss expense | ||||||||
| Litigation expense | ||||||||
| Other operating expense | ||||||||
| Total operating expenses | ||||||||
| Income from operations | ||||||||
| Interest expense | ||||||||
| Fees on virtual vault services | ||||||||
| Loss on extinguishment of debt | ||||||||
| Other expense | ||||||||
| (Loss) income before income taxes | ( | ) | ||||||
| Income tax (benefit) 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 consolidated financial statements.
| F-3 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the years ended | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| 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 | ||||||||
| Impairment of crypto assets held | ||||||||
| Credit loss expense | ||||||||
| 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 | ||||||||
| Non-cash loss on extinguishment of debt | ||||||||
| 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 | ( | ) | ( | ) | ||||
| Capitalized software | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing activities: | ||||||||
| Proceeds from debt | ||||||||
| Repayment of debt | ( | ) | ( | ) | ||||
| Payments in reduction of financing leases | ( | ) | ||||||
| Payments in reduction of equipment notes payable | ( | ) | ( | ) | ||||
| Proceeds from issuance of stock | ||||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changed on cash and cash equivalents | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| F-4 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the years ended | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| 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 | $ | $ | ||||||
| Leased assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Leased assets obtained due to remeasurement of lease term | $ | $ | ||||||
| Supplemental schedule of non-cash investing and financing activities: | ||||||||
| Property and equipment purchased in accounts payable | $ | $ | ||||||
| Software development purchased in accounts payable | $ | $ | ||||||
| Short-term debt replacing equipment financing | $ | $ | ||||||
| Accounts payable refinanced with equipment notes payable | $ | $ | ||||||
| Purchase of property and equipment under finance lease | $ | $ | ||||||
| Purchase of property and equipment financed with equipment notes payable | $ | $ | ||||||
| Imputed interest on property and equipment financed with equipment notes payable | $ | $ | ||||||
| Bitcoin used to buy property and equipment | $ | $ | ||||||
| Bitcoin used to pay interest | $ | $ | ||||||
| Bitcoin and Stablecoin used for other payments | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-5 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(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, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Net income | – | |||||||||||||||||||||||
| Foreign currency translation adjustment | – | |||||||||||||||||||||||
| Issuance of stocks | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
See accompanying notes to consolidated financial statements.
| F-6 |
ATHENA BITCOIN GLOBAL AND SUBSIDIARIES
NOTES TO 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 (f.k.a. GamePlan, Inc.), 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-three states and the territory of Puerto Rico in the United States, and 4 countries in Central and South America as of December 31, 2025. 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. The Company has changed its name to Athena Bitcoin Global from GamePlan, Inc. in a filing with the Secretary of State of the State of Nevada effective as of April 15, 2021.
On January 14, 2020, Athena Bitcoin Global entered into a Share Exchange Agreement (the “Agreement”), between the Company, Athena Bitcoin, Inc., a Delaware corporation (“Athena”) founded in 2015, and certain shareholders of Athena Bitcoin, Inc. The Agreement provided for the reorganization of Athena Bitcoin, Inc., with and into Athena Bitcoin Global, resulting in Athena becoming a wholly-owned subsidiary of the Company upon the closing of the transaction. The 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 consolidated financial statements have been adjusted to reflect the 1,244.69 to 1 share conversion.
Athena Bitcoin Global has shares issued and outstanding as of December 31, 2025, and 2024, and authorized capital of shares as of December 31, 2025, and 2024.
| F-7 |
Principles of Consolidation
The accompanying 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 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 consolidated financial statements, in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the 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 performance obligations identified under the terms of contracts with its customers are satisfied.
| F-8 |
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 potentially 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 ATM 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, includes 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 below.
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.
| F-9 |
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.
| F-10 |
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 December
31, 2025 and 2024, 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 receivables 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. |
| F-11 |
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 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 subsequent 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 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.
| F-12 |
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 December 31, 2025, and 2024, one customer, Chivo, Sociedad Anónima de Capital Variable, represented substantially all of the Company’s total accounts receivable balance.
No single customer is responsible for over 10% of revenue for the years ended December 31, 2025, and 2024.
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:
| Schedule of estimated useful lives | |
| 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 assets effective January 1, 2025, the Company began measuring 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.
Through the year ended December 31, 2024, the
Company assigned cost to transactions on a first-in, first-out basis. Gains on such assets were not recorded or recognized until their
final disposition. For the year ended December 31, 2024, the Company had impairment charges related to Bitcoin held of $
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.
| F-13 |
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 references 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 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 consolidated balance sheets. The Company has foreign currency translation gains adjustments of ($29) and $14 during the years ended December 31, 2025, and 2024, respectively.
The Company records exchange gains and losses resulting from the conversion of transaction currency to functional currency as a component of other income (expense).
The amount of taxes allocated to translation adjustments was immaterial for the years ended December 31, 2025, and 2024.
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
For a more detailed discussion of stock-based compensation, see NOTE 10. STOCK-BASED COMPENSATION.
stock-based compensation was recognized during the years ended December 31, 2025 and 2024, respectively.
| F-14 |
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 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 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 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 consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.
ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s 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.
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.
| F-15 |
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 years ended December 31, 2025 and 2024:
| Schedule of reconciliation of basic and diluted earnings per common share | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| 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 years ended December 31, 2025 and 2024.
| F-16 |
Recently Adopted and Issued Accounting Pronouncements
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, effective December 31, 2024. The adoption did not have a material impact on the consolidated financial statements.
On December 13, 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which requires entities to subsequently measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. For all entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. There was no material impact on the consolidated financial statements as a result of the adoption of this guidance.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Adoption of the standard only impacts the income tax disclosures and there has been no material impact to the consolidated financial statements as a result of the adoption of this guidance.
In January 2025 the SEC issued Staff Accounting Bulletin No. 122, (SAB 122), which rescinds the interpretative guidance included in SAB 121 “Accounting for obligations to safeguard crypto-assets an entity holds for platform users.” The new guidance is effective for annual periods beginning after December 15, 2024, and is required to be applied retrospectively to all prior periods with early adoption being permitted. The Company early adopted SAB 122 as of December 31, 2024. There was no material impact on the consolidated financial statements as a result of the adoption of this guidance.
Accounting Pronouncement 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 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 consolidated financial statements.
| F-17 |
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 years ended December 31, 2025, and 2024, there were no changes to the Company’s valuation techniques that had, or are expected to have, a material impact on its consolidated balance sheets or 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 years ended December 31, 2025, and 2024.
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.
| F-18 |
NOTE 2. REVENUE
The table below presents revenue of the Company disaggregated by revenue source for the years ended:
| Schedule of disaggregated by revenue source | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
| 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 years ended:
| Schedule of revenues by geographic location | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
| 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. |
| F-19 |
As of October 5, 2022, effective July 1, 2022 and expiring on July 30, 2024, the Company and Chivo, Sociedad Anónima de Capital Variable, a wholly owned private company of the Government of El Salvador ("CHIVO") signed a Master Services Agreement (“MSA”) and a Service Level Agreement (“SLA”) which replaced the existing Master Services Agreement, Contracts and Athena Service Addendums 1 and 2 with the Department of Treasury of El Salvador. The MSA and SLA include the same services, performance obligations, pricing and terms outlined in the original Master Services Agreement, Contracts and Addendums. In conjunction with the new MSA and SLA, the Company and CHIVO completed a financial settlement agreement secured by certain assets to reconcile reporting, and settle the balances owed between the parties. The settlement was completed as of April 2023 upon full satisfaction of all obligations thereunder. On December 20, 2024, a new three-year MSA and SLA with Chivo was signed effective December 1, 2024.
Effective June 30, 2024, a settlement agreement was entered into between Chivo and the Company whereby amounts owed to Chivo of $5,200 for amounts retained by the Company were netted against fees that Chivo owed the Company of $4,418; the net of which amounts to a payable to Chivo of $782 in addition to a receivable from Chivo of $798 for other fees. As part of the settlement agreement, the receivables and payables between the Company and Chivo were written off in exchange for (i) a new three-year agreement with Athena SV charging reduced rates going forward and (ii) Athena SV would make available to Chivo a credit facility of $600 for Chivo’s use at any time. However, the conditions of the credit facility were:
| a) | that the cash is the property of Athena SV, | |
| 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 |
The funds owed to Chivo were $0 as of December 31, 2025, and 2024.
NOTE 3. ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following as of December 31, 2025, and 2024:
| Schedule of accounts receivable | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
| White-label fee receivable | $ | $ | ||||||
| Athena Plus (OTC) | ||||||||
| Others | ||||||||
| $ | $ | |||||||
NOTE 4. CRYPTO ASSETS HELD, NET
The Company held the following crypto assets as of December 31, 2025 and 2024:
| Schedule of crypto assets | ||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Qty (1) | Average Rate | Amount | Qty (1) | Average Rate | Amount | |||||||||||||||||||
| Bitcoin | $ | $ | $ | $ | ||||||||||||||||||||
| Stablecoins | ||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||
| (1) |
| F-20 |
The table below shows the roll-forward of quantity and costs of various crypto assets traded by the Company.
| Schedule of roll-forward of quantity and costs | ||||||||||||||||
| Bitcoin | Tether (USDt) | |||||||||||||||
| Qty(1) | Cost | Qty(1) | Cost | |||||||||||||
| January 1, 2024 | $ | $ | ||||||||||||||
| Purchases | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment on crypto assets | ( | ) | ||||||||||||||
| Crypto assets used for expenses | ( | ) | ( | ) | ||||||||||||
| Crypto assets used for capital expenditure | ( | ) | ( | ) | ||||||||||||
| Crypto assets used for other payments | ( | ) | ( | ) | ||||||||||||
| December 31, 2024 | $ | $ | ||||||||||||||
| Bitcoin | Stablecoins (2) | |||||||||||||||
| Qty(1) | Cost | Qty(1) | Cost | |||||||||||||
| January 1, 2025 | $ | $ | ||||||||||||||
| Purchases | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Unrealized loss on crypto assets | ( | ) | ||||||||||||||
| Bitcoin received for independent Bitcoin ATM operators [affiliates program] | ||||||||||||||||
| Crypto assets used for expenses | ( | ) | ( | ) | ||||||||||||
| Crypto assets used for capital expenditure | ( | ) | ( | ) | ||||||||||||
| Crypto assets used for other payments | ( | ) | ( | ) | ||||||||||||
| December 31, 2025 | $ | $ | ||||||||||||||
| (1) | |
| (2) | |
| F-21 |
NOTE 5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following as of December 31, 2025, and 2024:
| Schedule of property and equipment, net | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| ATM Equipment | $ | $ | ||||||
| Computer equipment | ||||||||
| Office equipment | ||||||||
| Less accumulated depreciation | ||||||||
| Total property and equipment | $ | $ | ||||||
Depreciation expense for the years ended December
31, 2025, and 2024 was $
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 thousand 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, net of accumulated amortization, was $
| Schedule of capitalized software development cost | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Capitalized software | $ | $ | ||||||
| Less accumulated amortization | ||||||||
| Total capitalized software | $ | $ | ||||||
| F-22 |
NOTE 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets ae mostly composed of prepayment to the Company’s taxes, rent, insurance and security deposits. The components of prepaid expenses and other current assets were as follows:
| Schedule of other prepaid and other current assets | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Prepaid expenses and other current assets: | ||||||||
| Prepaid expenses | $ | $ | ||||||
| Prepaid taxes | ||||||||
| Other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
NOTE 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following as of December 31, 2025, and 2024:
| Schedule of accounts payable and accrued expenses | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts payable and accrued expenses: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Interest payable | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
NOTE 9. NOTES PAYABLE
Equipment notes payable
On September 22, 2021, the Company entered into
a borrowing arrangement with Banco Hipotecario secured against the Company’s assets in El Salvador. The promissory note provided
for a principal amount of $
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 $
| F-23 |
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 to be
made by January 31, 2025; however, the last payment was made on January 27, 2025. As of December 31, 2025, and 2024, the outstanding principal
was $
In addition, the Company shall pay 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”) 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 December 31, 2025, and 2024, the outstanding principal balance was $
| Schedule of long-term debt reconciliation | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Long-term Debt Reconciliation | ||||||||
| Taproot – Omnibus Equipment Refinancing Agreement | $ | $ | ||||||
| Taproot – Equipment Financing Agreement | ||||||||
| Total Equipment notes payable | ||||||||
| Less: Equipment notes payable, current portion | ( | ) | ||||||
| Equipment notes payable, net of current portion | $ | $ | ||||||
Short-term debt
In December 2023, the Company entered into financing
agreements with Capital Premium Financing, Inc. to pay the insurance premium on its commercial liability insurance. The annual interest
rate was
On February 26, 2024, the Company entered into
a financing agreement for $
On December 19, 2024, the Company entered into
financing agreements for $
| F-24 |
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 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) | $ |
During the twelve months ended December 31, 2025,
the Company recorded a loss due to the extinguishment of debt of $
As of December 31, 2025, and 2024, the outstanding
principal of the Release and Termination Agreement was $
On October 9, 2025, the Company entered into insurance
premium financing agreements for $
On December 30, 2025, the Company entered into
insurance premium financing agreements for $
| F-25 |
Note payable, Related-Party
As of May 15, 2023, the Company entered into
a certain Senior Secured Loan Agreement, as amended (the “Loan Agreement”) and Senior Secured Revolving Credit
Promissory Note (the “Revolving Credit Note”) with KGPLA Holdings LLC (“KGPLA”), an entity in which Michael
Komaransky, a former director and 40.8% beneficial owner of the Company has a controlling interest and serves as Manager of such
entity, and whose Chief Investment Officer is Huaxing “Jason” Lu, our director. The Revolving Credit Note allowed the
Company to borrow up to $
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 $
Separate from the repaid Loan Agreement and the Revolving Credit Note with KGPLA (discussed above in Note payable, Related-Party), the Secured Convertible Debenture with KGPLA (discussed in, Convertible debt, related-party) of 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.
Maturities on the Company’s notes payable are as follows:
| Schedule of maturities notes payable | ||||
| 2026 | $ | |||
| Total payments on notes payable | $ |
Stock Option Plan
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 consolidated financial statements for consulting services. As of December 31, 2025, and 2024, there were options outstanding under the plan.
| F-26 |
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. No securities have been issued under the 2025 Plan as of the date of these consolidated financial statements.
Non-recourse loans
In January 2020, the Company allowed its employees with vested stock options to exercise with the use of a non-recourse loan agreement for the issuance of shares of common stock. These loan agreements originally had a maturity date of 48 months from the date of exercise, which was extended by one year in December 2023 to 60 months. An increase of $ to additional paid in capital was recorded as a result of this modification. The loans carry an interest rate of 1.69%. The loans are required to be consistent with the accounting for stock options, with the exercise price of the stock option being the principal and interest due on the loan.
The fair value of the non-recourse loans as of the grant date (January 15, 2020) was determined using the Black-Scholes option pricing model. The following assumptions were used in estimating the fair value of the non-recourse loans:
| Schedule of assumptions estimating the fair value | ||||
| Stock price | $ | |||
| Exercise price | $ | |||
| Expected life (years) | ||||
| Expected volatility | % | |||
| Annual dividend yield | % | |||
| Discount rate | % |
The Company elected, in accordance with FASB ASC 718, to deduct the increase in the exercise price (interest) from the risk-free interest rate, resulting in no discount rate.
The original fair value of the awards was $, which was expensed in 2020.
As of December 31, 2024, the Company cancelled
these non-recourse loans in favor of the employees and the balance of the non-recourse loans as of December 31, 2025, and 2024, was $
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 years ended December 31, 2025, and 2024.
NOTE 11. WARRANTS
In 2017 Athena Bitcoin, Inc. issued warrants to
purchase
The unexercised
warrants to purchase
| F-27 |
NOTE 12. RELATED PARTY TRANSACTIONS
Aside from the transactions discussed in NOTE
9. NOTES PAYABLE to these consolidated financial statements, the Company carries a payables balance to Red Leaf Opportunities Fund
LP, an entity in which the Company’s principal shareholder, former director and former Chief Executive Officer has a controlling
interest in the General Partner, Red Leaf Advisors LLC, for previous purchases of crypto assets. The Company carries a payables balance
to Red Leaf Advisors, an entity in which Eric Gravengaard, our former CEO and former director, has controlling interest 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 years ended December
31, 2025, and 2024, 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 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 years ended
December 31, 2025, and 2024, were $
NOTE 14. INCOME TAXES
(Loss) income before income taxes for the years ended December 31, 2025, and 2024, was attributable to the following regions:
| Schedule of (loss) income before income taxes | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Domestic | $ | ( | ) | $ | ||||
| Foreign | ||||||||
| Total (loss) income before income taxes | $ | ( | ) | $ | ||||
| F-28 |
(Benefit) provision for income taxes for the years ended December 31, 2025, and 2024, consisted of the following:
| Schedule of (benefit) provision for income taxes | ||||||||
|
December 31, 2025 |
December 31, 2024 |
|||||||
| Current: | ||||||||
| Federal tax on income | $ | ( |
) | $ | ||||
| State and local, net of federal benefit | ||||||||
| Foreign | ||||||||
| Total current | ( |
) | ||||||
| Deferred: | ||||||||
| Federal tax on income | ||||||||
| State and local, net of federal benefit | ( |
) | ( |
) | ||||
| Total deferred | ( |
) | ||||||
| Total (benefit) provision for income taxes | $ | ( |
) | $ | ||||
The following presents a reconciliation of the income tax provision based on the U.S. Federal statutory tax rate to the total effective tax rate:
| Schedule of reconciliation of the income tax provision based on the U.S Federal statutory tax rate | ||||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Amount | % | Amount | % | |||||||||||||
| U.S. federal statutory rate | $ | ( | ) | % | $ | % | ||||||||||
| State income tax, net of federal benefit | ||||||||||||||||
| California | ( | ) | ||||||||||||||
| Florida | ( | ) | ||||||||||||||
| Georgia | ( | ) | ||||||||||||||
| Illinois | ( | ) | ||||||||||||||
| New Jersey | ( | ) | ||||||||||||||
| Pennsylvania | ( | ) | ||||||||||||||
| Texas | ( | ) | ||||||||||||||
| Others | ( | ) | ||||||||||||||
| Foreign tax effects: | ||||||||||||||||
| El Salvador | ||||||||||||||||
| Statutory tax rate difference between El Salvador and U.S. | ( | ) | ||||||||||||||
| Other | ( | ) | ||||||||||||||
| Other foreign | ||||||||||||||||
| Statutory tax rate difference between other foreign and U.S. | ( | ) | ( | ) | ( | ) | ||||||||||
| Other | ( | ) | ||||||||||||||
| Change in valuation allowance | ( | ) | ||||||||||||||
| Tax credits – Foreign tax credits | ( | ) | ( | ) | ||||||||||||
| Non-taxable or non-deductible items | ( | ) | ||||||||||||||
| Other adjustments – return to provision | ( | ) | ||||||||||||||
| Other adjustments – amended returns | ( | ) | ||||||||||||||
| Other adjustments – withholding taxes | ||||||||||||||||
| Other adjustments - Other | ( | ) | ( | ) | ||||||||||||
| $ | ( | ) | % | $ | % | |||||||||||
The Company’s effective tax rate
(“ETR”) for the years ended December 31, 2025, and 2024, was
| F-29 |
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The tax effects of the temporary differences and carryforwards that give rise to deferred tax assets and deferred tax liabilities consist of:
| Schedule of deferred tax assets and deferred tax liabilities | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Deferred tax asset: | ||||||||
| Foreign tax credit | $ | $ | ||||||
| Net operating loss carryforward | ||||||||
| Lease liability | ||||||||
| Other | ||||||||
| Gross deferred tax assets | ||||||||
| Deferred tax liability: | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Right to use asset | ( | ) | ( | ) | ||||
| Gross deferred tax liability | ( | ) | ( | ) | ||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Total net deferred tax liabilities | $ | ( | ) | $ | ( | ) | ||
A valuation allowance
of $
The following table represents the change in valuation allowance:
| Schedule of change in valuation allowance | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Valuation allowance – beginning of period | $ | $ | ||||||
| Allowance taken | ||||||||
| Valuation allowance – end of period | $ | $ | ||||||
| F-30 |
Net cash paid for income taxes consisted of the following:
| Schedule of net cash paid for income taxes | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Federal | $ | $ | ||||||
| Aggregates state and local jurisdictions | ||||||||
| Disaggregate state and local jurisdictions: | ||||||||
| Texas | ||||||||
| Maryland | ||||||||
| Arkansas | ||||||||
| Massachusetts | ||||||||
| Pennsylvania | ||||||||
| Arizona | ||||||||
| Florida | ||||||||
| New Jersey | ||||||||
| Illinois | ||||||||
| Minnesota | ||||||||
| Foreign | ||||||||
| Net cash paid for income taxes | $ | $ | ||||||
The Company is unaware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation in this estimate over the next year.
Activity related to the Company’s uncertain tax positions consisted of the following:
| Schedule of uncertain tax positions consisted | ||||||||
December 31, 2025 | December 31, 2024 | |||||||
| (in thousands) | ||||||||
| Balance, beginning of year | $ | $ | ||||||
| Increase to tax positions taken during the current year | ||||||||
| Decrease to tax positions taken during the prior year | ||||||||
| Balance, end of year | $ | $ | ||||||
Major tax jurisdictions are the United States and El Salvador. All of the tax years will remain open three and four years for examination by the Federal and state tax authorities, respectively, from the date of filling of the income tax returns. There are no tax audits in process with any tax authority.
| F-31 |
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 consolidated financial statements.
Employee Bonuses
As of December 31, 2025, and 2024, 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 proceeded to file its counter-complaint against Plaintiff who presented his answer on October 6,
2024. The potential loss related to the identified claim is between $0 and $
On June 21, 2024, Digital Access, LLC, a Michigan limited liability company (“Digital Access”) and two additional co-defendants, filed a complaint against Athena before the US District Court for the Eastern District of Michigan. The complaint alleges tortious interference with business relationships and business expectancy, statutory and common law conversions, and trespass to chattels and seeks injunctive relief. The case was removed to the U.S. District Court for the Northern District of Indiana. Although the Company did not believe that there was any merit to the allegations against it, a mutually acceptable settlement was reached by the parties that concluded the case. The parties completed the agreement and its requirements. The corresponding court entered an Order of Dismissal on March 25, 2025.
| F-32 |
On August 20, 2024, Keon Jackson (“Jackson”),
an individual, commenced what was entitled as a “Class Action Complaint” against Athena, filed at the US District Court for
the Northern District of Florida (the “Court”). The complaint alleges receipt of unwanted telemarketing text messages in contravention
to 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
did grant Jackson’s summary judgment under the Florida Telephone Solicitation Act (“FTSA”), in 4,512 instances and where
this statute establishes a penalty of $
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 at the Common Pleas Court at Cuyahoga County, Ohio. The complaint against Company alleges negligence and violations to the Ohio Products Liability Act because of alleged elder financial scams involving cryptocurrency and the operation of 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 (which cannot exceed $5,000 under the Class Action Fairness Act of 2005) 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. But the case has been 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 alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. 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 already Athena has in place. The claim by Carew against Athena is for an undetermined amount of compensation (which cannot exceed $ under the Class Action Fairness Act of 2005) as well as injunctive relief.
After removing the case to Federal Court, the case got 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.
The Company disputes the claims and believes that the allegations are based on flawed legal theories and incorrect factual assumptions, and the Company intends to vigorously defend itself against these claims and allegations including the possibility of asserting counterclaims against Carew. Although the outcome of any litigation is inherently uncertain and may be materially adverse, based on current information, our management does not expect this litigation to have a material adverse effect on our financial condition and results of operations.
| F-33 |
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 at Colorado’s Arapahoe County District Court. The complaint against the Company alleges negligence and violations to various Colorado statutes such as its consumer protection act, civil theft, 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 to what the Company already has in place. The claim by Yilma against the Company is for an undetermined amount of compensation (which cannot exceed $5,000 under the Class Action Fairness Act of 2005) 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 obligatory arbitration on August 13, 2025. Yilma initiated the arbitration proceedings under JAMS as established in Athena’s Terms of Service. In 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. Therefore, the Company’s assessment of this case at this time is there is no liability by Athena.
No actions have been served upon Athena pertaining to any lawsuit that may have been filed by Odoms. However, the statute of limitation for a tort action in the State of Florida is 2 years, if not properly tolled. Thus, Odoms still has at least a year to file any judicial claims against Athena.
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 at the Circuit County Court of Montgomery in Maryland. The complaint was served upon Athena on March 24, 2025. The complaint against Athena alleges violations to Maryland’s Safe Act, negligence, product liability because of defective design, and violation of the State’s Consumer Protection Act. Similar to the previous akin cases, (i.e., the cases above of S.M. filed on September 9, 2024 and Girma Yilma filed on January 21, 2025) but using a different law firm this time, 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 (which cannot exceed $5,000 under the Class Action Fairness Act of 2005) 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 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 to 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, it demands the reimbursement of funds of the full transaction 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.
| F-34 |
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 (which cannot exceed $5,000 under the Class Action Fairness Act of 2005) 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 has requested the removal of the case to the US District Court for the District of New Jersey. However, Gnadinger has moved to request the case be remanded back to the State Court in a September 15, 2025 filing. Therefore, at this time, the parties continue to await the Federal Court’s decision to remand or not the case to the State Court. Once the decision is made, remanded or not, Athena will then move to request that two of the claimants be compelled to arbitrate in accordance to the Terms of Service in effect at the time of their transactions.
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 CCPA; 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 transmissions in the District
of Columbia until Athena has required licenses; order Athena to pay damages and restitution for the entire transaction amounts it is alleged
to have 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 $
| F-35 |
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. As of the date of this letter, ABI has engaged counsel and is moving to file an initial motion to dismiss the case. Still, at this early stage, ABI is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.
We believe we have strong arguments against these open claims and litigation matters and plan to defend ourselves vigorously in these matters.
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 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.
Balance sheet information, as of December 31, 2025, and 2024, related to operating right-of-use assets and lease liabilities consisted of the following:
| Schedule of lease liabilities | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Right-of-use assets – operating leases | $ | $ | ||||||
| Operating lease liabilities, current portion | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| F-36 |
Other supplemental information related to operating leases was as follows:
| Schedule of other supplemental information | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| 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 December 31, 2025, the Company’s operating
leases have remaining lease terms of up to
The operating lease cost are composed of the following:
| Schedule of operating lease cost | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease cost | $ | $ | ||||||
| Short term lease cost | ||||||||
| Variable lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
The future lessee lease payments of noncancelable operating leases as of December 31, 2025 are as follows:
| Schedule of reconciliation of future lessee lease payments | ||||
| Operating Leases | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: Imputed interest | ||||
| Present value of lease liabilities | $ | |||
| F-37 |
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 December 31, 2025 and 2024, were $
NOTE 17. SUBSEQUENT EVENTS
The Company has evaluated subsequent events after the balance sheet date of December 31, 2025, through March 6, 2026, the date on which these consolidated financial statements were available to be issued.
| F-38 |
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
Change in Independent Registered Public Accounting Firm
On September 13, 2024, the Company engaged FGMK, LLC (“FGMK”), as its independent registered accounting firm to replace BF Borgers CPA PC’s (“BF Borgers”). The decision to change independent registered public accounting firms was made by the Board of Directors of the Company.
During the years ended December 31, 2022 and December 31, 2021, and the subsequent period through the engagement of FGMK, the Company did not consult with FGMK with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company by FGMK that FGMK concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act and the related instructions to Item 304 of Regulation S-K under the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act.
Effective May 6, 2024, the Company dismissed BF Borgers as its independent registered public accounting firm, which dismissal was approved by the Board of Directors of the Company.
BF Borgers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles.
BF Borgers’ audit opinion on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and December 31, 2021 did contain a modification indicating that the Company’s historical operating losses raise substantial doubt about its ability to continue as a going concern.
During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date of the dismissal of BF Borgers, there were no disagreements, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, between the Company and BF Borgers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to BF Borgers’ satisfaction, would have caused BF Borgers to make reference to such disagreements in its audit reports. During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date BF Borgers was dismissed, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K.
The SEC has advised that, in lieu of obtaining a letter from BF Borgers stating whether or not it agrees with the statements herein, the Company may indicate that BF Borgers is not currently permitted to appear or practice before the SEC for reasons described in the SEC’s Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act, Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order, dated May 3, 2024.
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Item 9A. 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of December 31, 2025. 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 December 31, 2025.
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.
Management’s Report on Internal Control Over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Maintaining effective internal control over financial reporting are necessary for us to produce reliable financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon that evaluation, management has concluded that our internal control over financial reporting were not effective as of December 31, 2025.
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 its 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.
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.
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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 Consolidated Financial Statements as included in Part II of this Annual Report on Form 10-K 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.
The Company’s independent registered public accounting firm is not required to attest to the effectiveness of the internal control over financial reporting until after the Company is no longer an “emerging growth company” as defined in the JOBS Act. At such time, the Company’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which the internal control over financial reporting is documented, designed or operating. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of the internal control over financial reporting required to be included in Athena Bitcoin’s periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in Athena Bitcoin’s reported financial and other information, which would likely have a negative effect on the trading price of the common stock.
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 December 31, 2025, 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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Item 9B. Other Information.
During the three months ended
December 31, 2025, none of our directors or “officers” (as such term is defined in Rule 16(a)-1(f) under the Exchange Act)
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
The following table sets forth certain information regarding our directors and executive officers as of March 6, 2026.
| Name | Age | Position(s) | DIRECTOR SINCE | |||
| Executive Officers | ||||||
| Matias Goldenhörn | 49 | Chief Executive Officer & Director | August 2022 | |||
| Carlos Carreño | 64 | Chief Operating Officer & Director | January 2023 | |||
| Omar Jimenez | 64 | Chief Financial Officer & Director | December 2024 | |||
| Non-Employee Directors | ||||||
| Huaxing “Jason” Lu | 38 | Director | December 2024 | |||
| Renata Szkoda | 49 | Director | December 2024 |
The following is a biographical summary of the experience of our directors and executive officers. Each director of the Company serves for a term of one year or until the successor is elected at the Company’s annual shareholders’ meeting and is qualified, subject to removal by the Company’s shareholders. Each executive officer serves at the discretion of the Board of Directors and holds office until the officer’s successor is duly elected and qualified, or until the officer’s earlier resignation or removal.
Matias Goldenhörn has been the CEO and Director of the Company since August 2022, He had previously served five years as the Company’s Director – Latin America prior to his appointment as CEO and Director. Mr. Goldenhörn has over 20 years of management experience working with Fortune 500 companies including Walmart, Starbucks, Microsoft and Yum Brands! with specializations in the development of Latin American and Caribbean markets. His entrepreneurial success stems from his founding of Swift Trust a financial technology brand. Mr. Goldenhörn’s strengths include planning and implementing growth strategies, development of multi-national footprint expansions and a record of business development strategies and executions that reflect high yield, year-to-year growth. As a global business leader, he has managed teams near and far, reporting to both corporate officers and regional country directors. He is fully bilingual and has attended business school between 1995 to 1999 at Pontifica Universidad Católica Argentina ’Santa Maria de los Buenos Aires’. The Company believes that Mr. Goldenhörn is highly qualified to serve as Chief Executive Officer and on the Company’s Board because of his business acumen.
Carlos Carreño has been a Director of the Company since January 2023 and Chief Operating Officer of the Company since August 2024. Mr. Carreño served as the Company’s Chief of Staff from August 2023 to August 2024, when he was appointed as Chief Operating Officer. Mr. Carreño served as a consultant to the Company from March 2023 until his appointment to the position of Chief of Staff of the Company. Mr. Carreño served from August 2021 until July 2022, as the Global Head of Financial Crime Compliance for Insigneo Financial Group in Miami, a global broker dealer, developing framework, control structure and governance, and managing five legal entities in Latin America and in the United States. From August 2017 until April 2021, Mr. Carreño was a Managing Director, Chief Compliance Officer, Director of regulatory compliance, Anti-Money-Laundering compliance and governance for Latin America with a global bank of HSBC based out of Mexico City. Mr. Carreño has over 25 years of compliance, risk management, governance and business development experience working with global banks and financial institutions, including IPB CitiBank, Banco Atlantico International, SunTrust Bank, Barclays, Banco Industrial de Venezuela, and Kroll. He is bilingual and attended the University of Central Florida. The Company believes that Mr. Carreño is highly qualified to serve as Chief Operating Officer and on the Company’s Board because of his valuable experience in corporate governance, business development, financial and global risk management and compliance.
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Omar Jimenez has served as the Company’s Chief Financial Officer since January 2025 and a Director since December 2024. Mr Jimenez, has held a variety of senior financial management positions during his career. Most recently, from March 2024 through December 2024, Mr. Jimenez served as a Board member, chairman of Audit Committee, Chief Financial Officer and Secretary of 180 Life Sciences Corp. (ATNF:NASDAQ), a clinical stage biotechnology company focused on the development of therapeutics in chronic pain, inflammation, fibrosis, and other inflammatory diseases. The Company recently pivoted business objectives and entered into online casinos and gaming operations using blockchain technology through asset acquisitions. From April 2021 until September 2024, Mr. Jimenez served as the Chief Financial Officer (Principal Financial/Accounting Officer) and Chief Compliance Officer of Golden Matrix Group, Inc. (GMGI:NASDAQ), an established business-to-business and business-to-consumer gaming technology company operating across multiple international markets. From February 2020 until April 2021, Mr. Jimenez served as the Chief Financial Officer and Chief Operating Officer of Alfadan, Inc. a pre-startup that will provide a series of marine specific engines. From September 2016 to January 2020 and from January 2016 to January 2020, Mr. Jimenez served as the Treasurer and Secretary and Chief Financial Officer and Chief Operating Officer, respectively, of Monaker Group, Inc. (MKGI:NASDAQ), a travel services company. Mr. Jimenez also served as a member of the Board of Directors of Monaker Group, Inc. from January 2017 to August 2019. From May 2009 to January 2016, he served as the founder of MARMEL International, Inc., a company that provides accounting and consulting services. In addition, from June 2004 to May 2009, he served as President and Chief Financial Officer at American Leisure Holdings, Inc. (AMLH:NASDAQ & ALG:AIM), focusing on leisure and business travel, hospitality & hotels, call centers and real estate development. Mr. Jimenez is a Certified Public Accountant (CPA), Chartered Global Management Accountant (CGMA), Chartered Property Casualty Underwriter (CPCU), a Member of the AICPA and FICPA. Mr. Jimenez holds a B.B.A in Accounting and a B.B.A in Finance from the University of Miami and an M.B.A from Florida International University. The Company believes that Mr. Jimenez is highly qualified to serve as Chief Financial Officer and on the Company’s Board because of his financial background and business acumen.
Huaxing “Jason” Lu has been a Director of the Company since December 2024, previously serving as a Director of the Company from March 2020 until January 2023. Mr. Lu has been a managing director at Komodo Bay Capital and Chief Investment Officer of KGPLA, since May 2020. Prior to joining Komodo Bay Capital, he was a trader at 4170 Trading from February 2018 until May 2020, where he started and ran the cryptocurrency focused subsidiary, Grapefruit Trading. From March 2017 until February 2018, Mr. Lu worked in numerous other trading roles at Old Mission Capital, and prior to 2017, at MSR Investments (2011-2017). Mr. Lu graduated from the University of Illinois Urbana-Champaign in 2008 with a dual degree in Electrical Engineering and Economics. The Company believes that Mr. Lu is highly qualified to serve on the Company’s Board because of his business acumen.
Renata Szkoda has been a Director of the Company since December 2024. Ms. Szkoda has served as the Chief Financial Officer of Scout Group LLC, a global proprietary trading firm that leverages advanced technology, deep market expertise, and quantitative research to capitalize on opportunities across financial markets, since May 2025. Ms. Szokda is also expected to become a member of the Board of Directors of Meshflow Acquisition Corp., a Special Purpose Acquisition Company, upon the effectiveness of its Registration Statement on Form S-1. Previously, Ms. Szkoda served as Chief Financial Officer of INX Digital Company, Inc.(“INX”)(OTCKMKTS:INXDF), the owner of digital asset trading platforms, from May 2022 until May 2024. Prior to joining INX, she was a director of finance for Galaxy Digital, the financial services and investment management firm offering institutional-grade products and services in digital assets, from November 2020 to May 2022. From July 2014 to May 2022, Ms. Szkoda served as Chief Financial Officer and Chief Operating Officer of Blue Fire Capital, LLC. She had previously held various financial and accounting positions. Ms. Szkoda is a seasoned financial executive who offers extensive experience in regulated capital markets and a strong record of achievement in building financial infrastructure and enabling business expansion via financial solutions and delivering results with laser focus on financial performance. She currently serves as chair of the Global Digital Asset & Cryptocurrency Association, a global self-regulatory association for the digital assets and cryptocurrency industry which she co-founded. Ms. Szkoda graduated from the University of Illinois at Chicago in 1999 with a degree in Accounting (B.S.). The Company believes that Ms. Szkoda is highly qualified to serve on the Company’s Board because of her financial background and business acumen.
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Family Relationships
There are no family relationships among any of our executive officers or directors.
Board Structure
Our business and affairs are managed under the direction of our Board, which currently consists of five members. Each of our current directors will continue to serve until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. The Board will stand for election at each annual meeting of stockholders. Each director will hold office for a one-year term and until the election and qualification of his or her successor. The authorized number of directors is set in our bylaws and can be determined from time to time solely by resolution of the Board.
We face a number of risks, including those described under the section titled “Risk Factors” included elsewhere in this Report. Our Board of Directors believes that risk management is an important part of establishing, updating, and executing on the Company’s business strategy. Our Board, as a whole and at the committee level, has oversight responsibility relating to risks that could affect the corporate strategy, business objectives, compliance, operations and the financial condition and performance of the Company. Our Board focuses its oversight on the most significant risks facing the Company and, on its processes, to identify, prioritize, assess, manage, and mitigate those risks. While our Board has an oversight role, management is principally tasked with direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate their effects on the Company.
Risk Oversight
Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in our business and strategy, evaluating our risk management processes, allocating responsibilities for risk oversight among the full Board of Directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
Board Committees
We do not currently have any committees of the Board.
Meetings of the Board of Directors and Annual Meeting
During the fiscal year that ended on December 31, 2025, the Board held 4 meetings and took various other actions via the unanimous written consent of the Board of Directors and the various committees described above. All directors attended at least 75% of the Board of Directors’ meetings during fiscal year 2025. The Company did not hold an annual meeting in 2025 or 2024. The Company does not have a policy regarding director attendance at annual meetings.
Stockholder Communications with the Board
A stockholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our Chief Executive Officer, Chief Financial Officer and/or Secretary, at 1 SE 3rd Avenue Suite 2740, Miami, Florida 33131, who upon receipt of any communication other than one that is clearly marked “Confidential,” will note the date the communication was received, open the communication, make a copy of it for our files and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of any communication that is clearly marked “Confidential,” our Secretary will not open the communication, but will note the date the communication was received and promptly forward the communication to the director(s) to whom it is addressed.
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Policy on Equity Ownership
The Company does not have a policy on equity ownership at this time.
Insider Trading / Anti-Hedging Policies
The Company has not yet adopted formal written insider trading policies and procedures governing the purchase, sale or other disposition of the Company’s securities by its directors, officers or employees, or by the Company itself, that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations and any applicable listing standards.
The Company currently has a centralized management structure consisting of a small number of executive officers and directors. Other than the Company’s Chief Executive Officer, Matias Goldenhörn, the Company has no other officers or employees who hold equity securities of the Company. Trading in the Company’s securities has historically been limited.
The Company expects to adopt formal insider trading policies and procedures designed to promote compliance with applicable insider trading laws and regulations in the near future.
Policy on Timing of Equity Award Grants
The Board has not established
policies and practices (whether written or otherwise) regarding the timing of option grants or other awards in relation to the release
of
Code of Ethics
Our Board has adopted a Code of Ethics that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations, including insider trading, corporate opportunities and whistleblowing or the prompt reporting of illegal or unethical behavior. We will provide a copy, without charge, to anyone that requests a copy of our Code of Ethics in writing by contacting us at our address provided in this Report. We intend to disclose any amendments to our Code of Ethics and any waivers with respect to our Code of Ethics granted to our principal executive officer, our principal financial officer, or any of our other employees performing similar functions in a Current Report on Form 8-K.
Involvement in Certain Legal Proceedings
Except as otherwise disclosed below in paragraph (a), none of our directors and executive officers has been involved in any of the following events during the past ten years: (a) any petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal agent or similar officer by a court for the business or property of such person, or any partnership in which such person was a general partner at or within two years before the time of such filing, or any corporation or business association of which such person was an executive officer at or within two years before the time of such filing, except that Mr. Goldenhörn filed for personal bankruptcy through the filing of a Chapter 7 bankruptcy petition in 2019 and the bankruptcy was discharged in 2020. (b)any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (c)being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining such person from, or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; (d)being the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (c)(i) above, or to be associated with persons engaged in any such activity; (e)being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission to have violated a federal or state securities or commodities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been reversed, suspended, or vacated; (f) being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; (g)being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (h)being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
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Indemnification Agreements
We have entered into indemnification agreements with each of our directors. The indemnification agreements have been effective since the beginning of the term of each respective director and require us to indemnify these individuals to the fullest extent permitted by Nevada law.
Potential Conflicts of Interest
Certain of our officers, directors, and employees are involved with or active investors in certain digital asset-related businesses, such as cryptocurrency miners, as well as active investors in digital asset projects themselves, and may make investment decisions that favor projects that they have personally invested in. Our largest stockholders may also make investments in these digital asset projects. Similarly, certain of our directors, officers, employees, and large stockholders may hold cryptocurrencies that we are considering supporting and may be more supportive of such listing notwithstanding legal, regulatory, and other issues associated with such cryptocurrencies. While we have instituted policies and procedures to limit and mitigate such risks, there is no assurance that such policies and procedures will be effective, or that we will be able to manage such conflicts of interests adequately. If we fail to manage these conflicts of interests, or we receive unfavorable media coverage with respect to actual or perceived conflicts of interest, our business may be harmed and the brand, reputation and credibility of our company may be adversely affected.
Additionally, we frequently engage in a wide variety of transactions and maintain relationships with a significant number of other firms in the broad economy surrounding Bitcoin, blockchain and other crypto assets. These transactions and relationships could create potential conflicts of interest in management decisions that we make. For instance, certain officers, directors, and employees of the Company are active investors in crypto projects themselves, and may make investment decisions that favor projects that they have personally invested in. Many of our large shareholders also make investments in these crypto projects.
If we fail to manage these conflicts of interest, our business may be harmed and the brand, reputation and credibility of our company may be adversely affected.
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Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth, for the fiscal years of 2024 and 2025, information regarding each element of all compensation awarded to, earned by or paid to Matias Goldenhörn, our Chief Executive Officer (since August 4, 2022), Tina Gregory, our Chief Financial Officer (August 24, 2022 to May 27, 2024), Eyal Segal, our Interim Chief Financial Officer (May 2024 to January 2025), Omar Jimenez, our Chief Financial Officer (since January 15, 2025) and Carlos Carreño, our Chief Operating Officer (since August, 2023), our named executive officers (collectively, the “Named Executive Officers” or “NEOs”). No other executive officers or directors received annual compensation in excess of $100,000 during the last two fiscal years.
| Name and Principal Position |
Year | Salary | Bonus | Stock | Option | Non- Equity |
Nonqualified | All Other | Total | |||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||
| Matias Goldenhörn (1) | 2025 | 437,988 | 875,000 | – | – | – | – | – | 1,312,988 | |||||||||||
| Chief Executive Officer | 2024 | 401,028 | 500,000 | – | – | – | – | – | 901,028 | |||||||||||
| Omar Jimenez (2) | 2025 | 288,814 | 75,500 | – | – | – | – | – | 364,314 | |||||||||||
| Chief Financial Officer | 2024 | – | – | – | – | – | – | – | – | |||||||||||
| Carlos Carreño (3) | 2025 | 329,867 | 390,500 | – | – | – | – | – | 720,367 | |||||||||||
| Chief Operating Officer Chief of Staff |
2024 | 259,167 | 86,250 | – | – | – | – | – | 350,417 | |||||||||||
| Tina Gregory (4) | 2025 | – | – | – | – | – | – | 33,000 | 33,000 | |||||||||||
| Former Chief Financial Officer | 2024 | 100,517 | 100,000 | – | – | – | – | – | 200,517 | |||||||||||
| Eyal Segal | 2025 | 71,397 | – | – | – | – | – | 47,917 | 119,314 | |||||||||||
| Former Interim Chief Financial Officer | 2024 | 150,643 | – | – | – | – | – | 74,876 | 225,519 |
| (1) |
For the year 2025, the bonus of $875,000 represents the sum of the $750,000 bonus that was accrued and awarded to our CEO for fiscal year 2024, and paid in March 2025, and $125,000 deferred bonus that was accrued and awarded to our CEO for fiscal year 2023, and paid in March 2025, excludes 43,564,230 shares of common stock agreed to be issued to Mr. Goldenhörn in fiscal 2021 in consideration for services provided as the Director of Latin America of the Company, which have not been issued as of December 31, 2025; and further excludes 15,000,000 shares agreed to be awarded to Mr. Goldenhörn as equity compensation in fiscal year 2022 for his services as the CEO of the Company, which shares have not been issued as of December 31, 2025.
For the year 2024, the bonus of $500,000 represents the bonus that was accrued and awarded to our CEO for fiscal year 2023, and paid in March 2024; excludes 43,564,230 shares of common stock agreed to be issued to Mr. Goldenhörn in fiscal 2021 in consideration for services provided as the Director of Latin America of the Company, which have not been issued as of December 31, 2025; and further excludes 15,000,000 shares agreed to be awarded to Mr. Goldenhörn as equity compensation in fiscal year 2022 for his services as the CEO of the Company, which shares have not been issued as of December 31, 2025.
|
| (2) | Mr. Jimenez as the Company’s Chief Financial Officer, became the Company’s employee as of January 15, 2025. |
| (3) |
For the year 2025, the bonus of $390,500 represents the amount that was accrued and awarded to our COO for fiscal year 2024 and paid in March 2025.
For the year 2024, includes $86,250 bonus accrued and awarded in fiscal year 2023 and paid in March 2024. |
| (4) | Ms. Gregory as the Company’s Chief Financial Officer, became the Company’s employee as of October 1, 2023 pursuant to the terms of the Offer Letter dated as of October 1, 2023. Includes $100,000 of bonus accrued and awarded in fiscal year 2023 and paid in March 2024. Ms. Gregory resigned as the Company’s Chief Financial Officer effective May 27, 2024, and her resignation was accepted by the Company’s Board of Directors. |
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Employee Bonuses
As of December 31, 2025, and 2024, the Company accrued $2.9 million and $2.1 million, respectively, of bonuses to employees and management of the Company and were included in accounts payable and accrued expenses. The bonuses are based on the Company’s performance objectives that were achieved during the respective years. The bonuses, for the year ended December 31, 2025, have not been paid or allocated to the employees yet. The bonuses, for the year ended December 31, 2024, were paid on March 14, 2025. Performance bonuses are based on management’s periodic review and the amounts are accrued monthly.
Outstanding Equity Awards at 2025 Fiscal-Year End
The Company: (i) did not grant any stock options to its executive officers or directors during the year ended December 31, 2025; (ii) did not have any outstanding equity awards as of December 31, 2025, except as discussed below; and (iii) had no options exercised by its Named Executive Officers during the year ended December 31, 2025.
There are no outstanding options as of December 31, 2025.
Compensation of Directors
Summary Director Compensation Table
The following table provides information regarding all compensation awarded to, earned by or paid to each person who served as a non-executive director of the Company during the year ended December 31, 2025. Other than as set forth in the table and described more fully below, the Company did not pay any fees, make any equity or non-equity awards, or pay any other compensation, to its non-employee directors. All compensation paid to its employee directors is set forth in the tables summarizing executive officer compensation above.
| Name | Fees Earned or paid in cash | Stock Awards | Option Awards | All Other Compensation | Total | |||||||||||||||
| Renata Szkoda | $ | 25,000 | $ | – | $ | – | $ | – | $ | 25,000 | ||||||||||
| Huaxing “Jason” Lu | $ | 25,000 | $ | – | $ | – | $ | – | $ | 25,000 | ||||||||||
The table above does not include the amount of any expense reimbursements paid to the above directors. No directors received any Non-Equity Incentive Plan Compensation, Change in Pension Value and Nonqualified Deferred Compensation Earnings during the period presented. Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is more than $10,000.
We reimburse directors for their reasonable out-of-pocket expenses, including travel, food, and lodging, incurred in attending meetings of our Board and/or its committees. Independent directors receive a quarterly stipend of $6,250.
Consulting Agreements and Offer Letters with Officers and Directors
The Company’s operating subsidiary, Athena Bitcoin, Inc. entered into an Independent Contractor Agreement as of January 1, 2022, with Antonio Valiente for certain legal services, primarily related to, but not limited to, managing the legal and regulatory requirements for the Company’s global operations as Athena Bitcoin’s Deputy General Counsel. Mr. Valiente’s agreement provided for a monthly compensation of $8,500 for 20 hours of work per week (increased to $18,056 per month from October 2023 through March 31, 2025 and reverted back, as of April 1, 2025, to $8,500 for 20 hours of work per week). The Agreement can be terminated at any time by either party with two weeks’ notice. The agreement contains customary confidentiality requirements binding Mr. Valiente.
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Carlos Carreño entered into a Consulting Agreement with the Company as of March 15, 2023 to provide certain advisory and consulting compliance services with respect to the Company’s business operations. Mr. Carreño was compensated based on an hourly fee of $200 per hour. The agreement contains customary confidentiality and intellectual property requirements binding Mr. Carreño. The Agreement was terminated in July 2023 upon Mr. Carreño’s appointment as the Company’s Chief of Staff. There are currently no agreements between Mr. Carreño and the Company. Separately, the Company entered into an Offer Letter with Mr. Carreño on August 15, 2023. Pursuant to the Offer Letter Mr. Carreño was offered and he accepted employment as Chief of Staff of the Company, reporting to Matias Goldenhörn, CEO. Mr. Carreño’s compensation as provided in the Offer Letter was an annual salary of $230,000, plus a target discretionary yearly bonus, based on the Company’s performance and Mr. Carreño’s individual performance. The amounts of such bonuses, if awarded, will be at the sole discretion of the Company as determined by its Board of Directors. In addition, the Offer Letter stipulates that the Company may need to change his assignments, positions, and compensation levels to meet changing business needs and conditions. On August 14, 2024, Mr. Carreño was promoted to Chief Operating Officer.
Mr. Omar Jimenez is party to an Offer Letter dated December 11, 2024 with the Company. Pursuant to the Offer Letter, Mr. Jimenez was offered employment as Chief Financial Officer of the Company reporting to Matias Goldenhörn, CEO. Mr. Jimenez’s compensation was set at an annual salary of $300,000 plus a discretionary bonus, based on the Company’s performance and Mr. Jimenez’s individual performance, with a target of 50% of his base salary. The amounts of such bonuses, if awarded, will be at the sole discretion of the Company and are not guaranteed. The terms, conditions, and payment of such bonuses will be communicated by the Company and are subject to applicable taxes and deductions. In addition, the Company agreed to grant Mr. Jimenez Options to purchase 10 million shares of common stock of the Company, vesting in equal annual installments over three years from his start date, provided he remains employed with the Company, which options have not been granted to date.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding the beneficial ownership of our capital stock outstanding as of February 15, 2026, by:
| · | each person, or group of affiliated persons, known by us to beneficially own more than 5% of our shares of common stock; | |
| · | each of our directors; | |
| · | each of our named executive officers; and | |
| · | all of our directors and named executive officers as a group. |
The column titled “Percent Owned” is based on a total of 4,095,009,545 shares of our common stock outstanding as of December 31, 2025.
Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules attribute beneficial ownership of securities as of a particular date to persons who hold options or warrants to purchase shares of common stock and that are exercisable within 60 days of such date. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
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Except as otherwise noted below, the address for each person or entity listed in the table is c/o Athena Bitcoin Global, 1 SE 3rd Avenue, Suite 2740, Miami, Florida 33131.
| Name of Beneficial Owner | Number of shares beneficially owned |
Percent Owned | ||||||
| Directors and Named Executive Officers | ||||||||
| Matias Goldenhörn, CEO & Director | 62,920,653 | (1) | 1.5 | % | ||||
| Carlos Carreño, COO & Director | – | – | ||||||
| Omar Jimenez, CFO & Director | – | – | ||||||
| Huaxing “Jason” Lu, Director | – | – | ||||||
| Renata Szkoda, Director | – | – | ||||||
| – | – | |||||||
| All Named Executive Officers and Directors as a Group (5 persons) | 62,920,653 | 1.5 | % | |||||
| 5% Stockholders | ||||||||
| Michael Komaransky (2) | 1,521,141,192 | 37.1 | % | |||||
| Eric Gravengaard (3) | 1,126,484,100 | 27.5 | % | |||||
| Tom Kerestes (4) | 429,494,749 | 10.5 | % | |||||
___________________
| (1) | Includes the award of 43,564,230 shares of common stock agreed to be made to Mr. Goldenhörn in fiscal 2021 in consideration for services rendered as the Director of Latin America which have not been issued; and 15,000,000 shares agreed to be awarded to Mr. Goldenhörn as equity compensation in fiscal year 2022 for his services as the CEO of the Company, which shares have not been issued as of December 31, 2025, but which shares are issuable to Mr. Goldenhörn at any time upon his request, and which shares he is therefore deemed to beneficially own in accordance with applicable SEC rules. |
| (2) | Consists of: 1,521,141,192 shares of common stock held of record by Athena Equity LLC, an entity beneficially owned and controlled by Mr. Komaransky, and whose Chief Investment Officer is Huaxing “Jason” Lu, our director. |
| (3) | Consists of: (i) 863,960,473 shares of common stock held of record by Eric Gravengaard, as Trustee of the Eric L. Gravengaard Trust of 2011 (the “Trust”), which shares Eric Gravengaard is deemed to beneficially own due to his position as trustee of the Trust and (ii) 262,523,604 shares of common stock held of record by Eric Gravengaard and does not reflect the ongoing transfer of 262,523,604 shares of common stock from Mr. Gravengaard to Liberty Digital Holdings, LLC. which has not been completed as of December 31, 2025, which transfer is required pursuant to the terms of a court order relating to an ongoing legal matter between Mr. Gravengaard and Liberty Digital Holdings LLC. Mr. Gravengaard resigned as the Company’s CEO on August 4, 2022. Address: 701 Foxdale Ave, Winnetka, IL 60093. |
| (4) | Consists of: (i) 191,454,966 shares of common stock held of record by Swingbridge Crypto I LLC; (ii) 50,271,880 shares of common stock held of record by Swingbridge Crypto II LLC; (iii) and 187,767,903 shares of common stock held of record by Swingbridge Crypto III LLC. Swingbridge LLC is the manager of Swingbridge Crypto I LLC, Swingbridge Crypto II LLC and Swingbridge Crypto III LLC and Tom Kerestes is the manager of Swingbridge LLC together with Rob Levy. Mr. Kerestes is one of the beneficial owners of Swingbridge LLC, an entity that is a manager of the three Swingbridge Crypto LLCs that hold the shares of the Company’s common stock, as set forth herein above. |
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Change of Control
The Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.
Equity Compensation Plan Information
The following table sets forth information, as of December 31, 2025, with respect to our compensation plans under which common stock is authorized for issuance.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (A) | Weighted-average exercise price of outstanding options, warrants and rights (B) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in Column A) (C) | |||||||||
| Equity compensation plans approved by stockholders | 2,000,000 | (1) | $ | – | 98,000,000 | |||||||
| Equity compensation plans not approved by stockholders | – | – | – | |||||||||
| Total | 2,000,000 | (1) | $ | – | 98,000,000 | |||||||
(1) 2,000,000 shares of common stock issuable upon the settlement of certain outstanding RSUS.
Athena Bitcoin, Inc. 2016 Equity Incentive Plan
Athena Bitcoin’s directors and shareholders have adopted the Athena Bitcoin, Inc. 2016 Equity Compensation Plan effective as of October 1, 2015, which plan was amended and restated on January 29, 2020 (the “2016 Plan”).
The 2016 Plan provides an opportunity for any employee (or in some cases directors) of Athena Bitcoin, subject to limitations provided by federal or state securities laws, to receive (a) incentive stock options, and (b) non-qualified stock options. No shares of common stock are available for the grant of awards under the 2016 Plan.
Athena Bitcoin Global 2021 Equity Compensation Plan
In October 2021, the Company’s Board of Directors and its majority shareholders approved the Company’s 2021 Equity Compensation Plan (the “2021 Plan”) providing for up to 100 million awards of shares of the Company’s common stock.
Awards under the 2021 Plan can be made to employees, directors or consultants, subject to applicable law, in the form of nonstatutory stock options, stock appreciation rights, restricted stock, and restricted stock units and can also be made to employees in the form of incentive stock options.
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Athena Bitcoin Global 2025 Equity Incentive Plan
On July 2, 2025, the Company’s Board of Directors approved the Company’s 2025 Equity Incentive Plan (the “2025 Plan”), which was approved and ratified by the stockholders of the Company on July 7, 2025.
The 2025 Plan provides for the grant of awards 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. In making such determinations, the Board of Directors (the “Board”) or Compensation Committee may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board or Compensation Committee, in its discretion shall deem relevant.
Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which may be issued pursuant to awards under the 2025 Plan is 409,500,955.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Except as referenced below or otherwise disclosed above under “Item 11. Executive Compensation”, which information is incorporated by reference in this Item 13,, there were no transactions during the years ended December 31, 2025, or 2024, to which we were a party, including transactions in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described elsewhere in this registration statement. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.
On January 31, 2020, the Company entered into a securities purchase agreement for Convertible Debenture with KGPLA Holdings LLC (the “Lead Investor”), an entity in which Mike Komaransky, a former director and 40.8% beneficial owner of the Company has a controlling interest and is Manager of such entity, and whose Chief Investment Officer is Huaxing “Jason” Lu, our director. 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 in the securities purchase agreement is 8% per annum. The Secured Convertible Debenture was 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 (the “Next Equity Financing”); 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 $70,282,176 (the “Valuation Cap”), 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 (“IPO”), 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. “Fully diluted capitalization” includes all outstanding shares of capital stock on an as-converted basis and reserved equity incentive shares, but excludes certain debt instruments with an aggregate face value of $500,000 or less, specified Secured Convertible Debenture and SAFEs or SAFTs of up to $500,000.
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On November 24, 2025, the Company voluntarily repaid in full the outstanding balance of approximately $3 million plus accrued interest of $36thousand owed to KGPLA under the Secured Convertible Debenture for a total payment of $3.036 million. In connection with the repayment of all amounts owed pursuant to the Secured Convertible Debenture, the obligations and commitments owed by the Company to KGPLA under the (a) Secured 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.
As of December 31, 2025, and 2024, the outstanding principal amount of the Secured Convertible Debenture was $0 and $3 million, respectively.
The Secured Convertible Debenture is described in greater detail above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Financing Transactions- Convertible debt, related-party”.
As of May 15, 2023, the Company entered into a certain Senior Secured Loan Agreement, as amended (the “Loan Agreement”) and Senior Secured Revolving Credit Promissory Note (the “Revolving Credit Note”) with KGPLA. The Revolving Credit Note allows the Company to borrow up to $4,000 for the operations of its New Bitcoin ATMs, as defined in the Loan Agreement, with a maturity date of May 15, 2024. Fees for these borrowings are calculated based on a percentage of the gross daily receipts generated from these machines and are recorded as part of Cost of Revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss) . As of December 31, 2023 the outstanding principal of the Revolving Credit Note was $4 million. In connection with the above loan transaction and issuance of Revolving Credit Note, the Company granted KGPLA a first priority lien and security interest in and to all of the Company’s assets, except for property previously pledged to Banco Hipotecario, and with respect to such assets, the Company granted the Lender a second priority lien. The principal of $4 million together with applicable fees was repaid in full as of March 28, 2024.
Eric Gravengaard, a greater than 10% shareholder of the Company and former director, agreed to be a personal guarantor (as the Company’s more than 10% shareholder) in connection with the Company’s grant of certain business licenses. Mr. Gravengaard received $10 thousand (through December 31, 2025) for providing his personal guaranty in 2022 and $5 thousand in 2023, $0 in 2024 and $0 in 2025.
The Company carries a payables balance to Red Leaf Advisors, an entity in which Eric Gravengaard, our former CEO and former director, has controlling interest for previous purchases of crypto assets. The outstanding balance due to Red Leaf Advisors was $66 thousand and $407 thousand as of December 31, 2025, and 2024, and is recorded in accounts payable, related party in the Consolidated Balance Sheets. On or about April 9, 2025, the Company was notified of a “Turnover Order” dated April 2, 2025, in the amount of $341 thousand for the benefit of Judgment Creditor, SDY Trust, of funds in its possession belonging to Red Leaf Advisors. The Company is a non-party third party on these proceedings. A Motion to Vacate the Turnover Order was filed as the amount in question is a $407 thousand liability on the balance sheet of the Company. However, in order to avoid further legal expenses, On September 5, 2025, the Company disbursed $341,000 to SDY Trust resulting in a balance due to Red Leaf Advisors of $66 thousand.
The Company incurred cash logistics services of $6.537 million and $5.156 million for the years ended December 31, 2025, and 2024, respectively with Move On Security LLC.. Mr. Matias Goldenhörn, the Chief Executive Officer and director of the Company, has a 50% interest in Move On Security LLC. Included in the balance of accounts payable, related-party are the amounts due to Move On Security, LLC of $112 thousand and $246 thousand as of December 31, 2025, and 2024, respectively.
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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 years ended December 31, 2025, and 2024, the Company incurred $4.955 million and $3.858 million in services with Move On Tech Service, LLC. Included in the balance of accounts payable, related-party are the amounts due to Move On Tech Service, LLC of $77 thousand and $165 thousand as of December 31, 2025, and 2024, respectively.
Registration Rights
We are party to an Investors’ Rights Agreement dated as of January 31, 2020, as amended as of February 14, 2025 which was entered into in connection with the Company’s issuance of 8% Convertible Debentures with the Lead Investor and the Key Holder, defined below, and in the Investors Rights Agreement, which grants them certain registration rights with respect to our common stock, as discussed below.
Demand Registration Rights
At any time beginning after the earlier of one hundred eighty (180) days after the effective date of a registration statement for the Company’s first underwritten public offering of its common stock or five (5) years after the date of the Investors’ Rights Agreement, the holders of 30% or more of the registrable securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions would exceed $15 million) may make a written request that we register all or a portion of their shares, subject to certain specified exceptions. The holders of shares having registration rights are entitled to written notice from the Company. We will prepare and file a registration statement as requested, unless, in the good faith judgment of our Board, such registration would be seriously detrimental to the Company and its stockholders and filing should be deferred. We are not obligated to effect more than two of these registrations within any 12-month period or if the holders’ proposed registered securities may be immediately registered on Form S-3.
If at any time after the earlier of (i) five (5) years after the date of the Investors’ Rights Agreement or (ii) one hundred eighty (180) days after the effective date of a registration statement for the Company’s first underwritten public offering of its common stock, the Company receives a request from either the Lead Investor or holders of thirty percent (30%) of the registrable securities then outstanding that the Company file a Form S-1 registration statement with respect to at least thirty percent (30%) of the registrable securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of selling expenses, would exceed $15 million), then the Company shall (x) within ten (10) days after the date such request is given, give a demand notice to all holders other than the initiating holders; and (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the initiating holders, file a Form S-1 registration statement under the Securities Act covering all registrable securities that the initiating holders requested to be registered and any additional registrable securities requested to be included in such registration by any other holders, as specified by notice given by each such holder to the Company.
Notwithstanding the above, the Company may delay a requested registration for up to 90 days if its Chief Executive Officer certifies that, in the Board of Directors’ good faith judgment, allowing the registration to proceed or remain effective would materially harm the Company or its stockholders. Such harm may arise from materially interfering with a major acquisition, corporate reorganization, or similar transaction; prematurely disclosing material confidential information; or preventing compliance with Securities Act or Exchange Act requirements. This deferral right can be invoked only once per twelve-month period, and during the 90-day deferral, the Company may not register securities for itself or others, except for Excluded Registrations.
The agreement also restricts the Company from granting subsequent registration rights without the prior written consent of holders of at least 25% of the then-outstanding registrable securities. Specifically, the Company may not enter into any agreement with other holders or prospective holders of its securities that would allow them to include securities in a registration if doing so would reduce the amount of registrable securities held by existing holders included in such registration, or that would give them the right to demand registration of their securities.
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Form S-3 Registration Rights
At any time after we are qualified to file a registration statement on Form S-3, if ever and subject to limitations and conditions, the holders of 35% or more of the registrable securities then outstanding are entitled to written notice of such registration and may make a written request that we prepare and file a registration statement on Form S-3 under the Securities Act covering their shares, so long as the aggregate price to the public, net of the underwriters’ discounts and commissions, is at least $5,000,000. We will prepare and file the Form S-3 registration as requested, unless, in the good faith judgment of our Board of Directors, such registration would be seriously detrimental to the Company and its stockholders and filing should be deferred. We may defer only once in any 12-month period, and such deferral shall not exceed 90 days after receipt of the request. In addition, we are not obligated to prepare or file any of these registration statements (i) within 180 days after the effective date of a registration statement pursuant to demand or piggyback registration rights or (ii) if two of these registrations have been completed within any 12-month period.
In accordance with the Investors’ Rights Agreement, the Company delivered the required notice of a proposed filing in a timely manner, of the Company’s initial registration statement on Form S-1 and the holders elected not to include in the registration statement any of the common stock issuable upon the conversion of their respective Convertible Debentures.
Piggyback Registration Rights
In addition to the above, if the Company plans to register any of its securities for a public offering solely for cash (excluding (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only common stock being registered is common stock issuable upon conversion of debt securities that are also being registered), it must promptly notify the counterparties to the Investors’ Rights Agreement. Holders then have twenty (20) days to request that their registrable securities be included, and the Company must register those securities if so requested. The Company may terminate or withdraw any registration before it becomes effective, regardless of holder participation, and the Company will bear all expenses of a withdrawn registration, excluding selling expenses.
Termination of Rights
The right of any counterparty to the Investors’ Rights Agreement to request registration or inclusion of registrable securities in any registration statement as described therein terminates upon the earlier of (a) such time after consummation of an initial public offering as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such holder’s shares without limitation during a three- month period without registration; or (b) the tenth (10th) anniversary of the date of the Investors’ Rights Agreement.
Right of First Refusal and Co-Sale Agreement
In connection with the offering of the 8% Convertible Debentures, Eric Gravengaard, the Company’s, then current director and principal shareholder (the “Key Holder”), and investors in the 8% Convertible Debentures (the “Investors”), entered with the Company into a Right of First Refusal and Co-Sale Agreement dated as of January 31, 2020 (the “RFR Agreement”), pursuant to which the Key Holder granted to the Company the right of first refusal to purchase all or any portion of common stock that the Key Holder proposes to transfer, at the same price and terms as offered to the proposed transferee. The right of first refusal is subject to certain notice requirements and applicable purchase terms. The Key Holder also agreed to grant to the Investors, secondary refusal right to purchase all or any portion of the common stock proposed to be transferred by the Key Holder that has not been purchased by the Company pursuant to the right of first refusal. The grant of the secondary refusal right is subject to certain notice requirements and additional purchase terms as set forth in the RFR Agreement. The agreement remains in place until the date of the final prospectus relating to the Company’s initial public offering a. The shares of common stock held by Mr. Gravengaard are restricted from being transferred, except pursuant to the terms of the RFR Agreement while that remains in place.
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Indemnification Agreements
We have entered into indemnification agreements with each of our current directors. The indemnification agreements, our Amended Articles, and our restated bylaws, require us to indemnify our Directors to the fullest extent not prohibited by Nevada law. Subject to certain limitations, our restated bylaws also require us to advance expenses incurred by our directors and officers.
Conflicts of Interest and Policy Regarding Transactions with Related Persons
We do not have a formal, written policy for the review, approval or ratification of transactions between us and any director or executive officer, nominee for director, 5% stockholder or member of the immediate family of any such person that are required to be disclosed under Item 404(a) of Regulation S-K. However, our policy is that any activities, investments or associations of a director or officer that create, or would appear to create, a conflict between the personal interests of such person and our interests must be reviewed by our Board of Directors and determined in accordance with the applicable provisions of Nevada law, and specifically pursuant to Section 78.140 of the Nevada Revised Statutes, which provides restrictions on transactions involving interested directors or officers, including requirement of full disclosure of such interest to the Board of Directors, abstention from voting on the matter involving conflict of interest and the determination of the fairness of the transaction.
Director Independence
Our Board of Directors has determined that Huaxing “Jason” Lu and Renata Szkoda are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. In assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors is a director or executive officer or with which one of our directors is otherwise affiliated.
Item 14. Principal Accountant Fees and Services.
Our independent registered public accounting firm is FGMK, LLC, Chicago, IL Auditor Firm ID:3968 (“FGMK”)who have audited our financial statements for the years ended December 31, 2025, and 2024.
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2025 and 2024 by FGMK. FGMK has served as the Company’s independent registered public accounting firm since 2024. See “Item 9 - Change in Independent Registered Public Accounting Firm”.
| FGMK | Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||
| (in thousands) | (in thousands) | |||||||
| Audit fees | $ | 422.5 | $ | 300.0 | ||||
| Audit related fees | 25.5 | – | ||||||
| Tax fees | 159.0 | 4.8 | ||||||
| Total | $ | 607.0 | $ | 304.8 | ||||
Audit fees consist of amounts for professional services rendered for the audit of our year-end financial statements and services normally provided in connection with statutory and regulatory filings or engagements including comfort letters, consents and other services related to SEC matters.
Audit-Related Fees. Audit-related services consist of amounts for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Fees. The aggregate amount of fees for tax planning, tax advice and tax compliance for the years ended December 31, 2025, and 2024 totaled $159 thousand and $4.8 thousand, respectively.
All Other Fees. We did not incur fees for any other services for both the year ended December 31, 2025 and 2024.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
(1) Financial Statements
| Page | |
| Index to Financial Statements | |
| Report of Independent Registered Public Accounting Firm (ID #3968) | F-2 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations and Comprehensive Income | F-4 |
| Consolidated Statements of Shareholders’ Equity | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 |
(2) Financial Statement Schedules:
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K
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| 131 |
| 132 |
| Incorporated by Reference | ||||||||||||
|
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. |
| # | Indicates management contract or compensatory plan or arrangement. |
| † | Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) the Company customarily and actually treats that information as private or confidential. |
| £ | Certain schedules, annexes and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Commission upon request; provided, however that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act, for any schedule or exhibit so furnished. |
| ♦ | These reports were incorrectly assigned File No. 000-27435 instead of File No. 333-262629 by the SEC and the Company has contacted the SEC about the error. |
Item 16. Form 10-K Summary.
None.
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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: March 6, 2026 | By: | /s/ Matias Goldenhörn |
| Name: | Matias Goldenhörn | |
| Title: | President and Chief Executive Officer (Principal Executive Officer) | |
| Date: March 6, 2026 | By: | /s/ Omar Jimenez |
| Name: | Omar Jimenez | |
| Title: | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Matias Goldenhörn | Chief Executive Officer and Director | March 6, 2026 | ||
| Matias Goldenhörn | (Principal Executive Officer) | |||
| /s/ Omar Jimenez | Chief Financial Officer and Director | March 6, 2026 | ||
| Omar Jimenez | (Principal Financial and Accounting Officer) | |||
| /s/ Carlos Carreño | Chief Operating Officer and Director | March 6, 2026 | ||
| Carlos Carreño | ||||
| /s/ Huaxing “Jason” Lu | Director | March 6, 2026 | ||
| Huaxing “Jason” Lu | ||||
| /s/ Renata Szkoda | Director | March 6, 2026 | ||
| Renata Szkoda |
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Exhibit 3.3
Filed in the Office of Secretary of State State Of Nevada Business Number C11927 - 1991 Filing Number 20180447594 - 24 Filed On 10/12/2018 Number of Pages 1
Exhibit 3.4
Filed in the Office of Secretary of State State Of Nevada Business Number C11927 - 1991 Filing Number 20200432312 Filed On 1/22/2020 1:05:00 PM Number of Pages 1
Exhibit 3.5
flLED IN M 0Fl'IO£ O:t ttffi 8£Cffl!7t.AY OF lfA1E OPTHE STATE OP NEVAOA DEC 2 6 1991 RECElPT IC 31567 ALVIN J, IIICI<S l'.O.BOX 2670 lfENO, llEVAt>A 89505 Fil,ING FEE t $17 5, 00 K,K, Olffll A. � Cffl � OIi IT.I.IP. .i � - 1 27...91 N � . 'ft1e u. � enil"lcd lneGfJ!Onltor, bi!ln1 a natural pcnot lByHn or110 acting at1 •.he 1010 ARTJCf.il!Sf': INCORl'ORATIOh 01,' aAMP.Pl,Aff, INC. h1eorporauir 01 1 h.:iabovo•nam11d eorpora,fo,1 (herelnaner referred to•• tho "Corporation"}, horoby adopta tholi>l:owJ � Article& ot IncorporoUon rorthoCorporation. ARTICLE I NAME Thenameot'LhaCorporatlon 11hall bc - : Oaml"Plan, Inc. law. Ali1'1CLF. fl JJERIOf> OP J>VRAT10N Tho Col"])OTation 1h1'1l tOl'ltlnuo In 0111:ttonco perpetually 1.1nleas sooner dlsllOlrted 1m:ordln1J to ARTICLE IIJ PllRPOSKS AND POWRRS Tho purpot0 or purpotlff for which thoCorporation Is orsanlzed le lC \ seek, lnvostlgale, acquire lnterctte In, and dfapoge or b111lnils11 oppcrlu!,:_;lea, ve;itures, entcrprlsos, or ai;,et,, lncludlng tho110 lnvolvin1or rcloud t , .o .. a ontertalnmont bu;:. � u; to own and oporalo any ontcrprlso wnatsoevor; to acquire, hold, and df 1 poa,, or roal or personal property ot any kind or naturo, tangiblo or lntangibto ; and to doany and every act or thing proper or nccessar 1 and Incidental to the foregoing and conduct anylawful hu . ,lnciis tor whichacorporation may boorganized under the lawsolthoslateorNevada . ARTICLE IV AUTHOHIZEIJ SHARES Tho Corporation II authorized to IHue a totol of 60 , 000 , 000 share,, cunelsttng of 10 , 000 , 000 sharos or preferred 1 toc'k, par value 10 . 001 per share (hcrclnaller tho "Prerorrc . J Stock"), and 40 , 000 , 000 ,haresorcommon 11 . ock, par value t 0 . 001 per maro{hcrolnafttr tho "Common Stock") . ARTICI.EV CLASSES OFSTOCK A atatemenl of the dnlgnaUons""d tho powors, prefcroncet, right.", cpiaUficaUona,I lmlta1lons, or mtricllon, or the ahoree or etoci. or each clan and serlea which tho Corporation Is1mt1'0rlied to lssuo Is III rollowa: 1. frc::terrcd!lli?as, . OfthC! 10,000,000aham en Prorortcd Stoek, l>,000,000 � am shall be rvnrved f{lf' lsauanco excluelvoly to Indian nation!, trlbes, or band• within tho U1.1llcd State[. or Amerka. . · . ' ,.,_:· .: . ' ! � . - - . � "' • :"··1.: ,,:/ � I � :21.? � 'i> 1 ., . _
Sharer . or Prcrrn - TcdStoc!l thall be no 11 afte 111111 bl 11 end may be Issued Inono oT moreseriosat m • 1 rrvm tlmotothno be d � tA!rmlncd by thohoard of dlrtetou . � ach . crtu ahall bedl 9 llne&!y deefgnatfd . , \ II eharc& of any one i,orlce of Cht 1 Preferred SllH : k i ; hall bealike In ,i · ,cry pnrth : ular, excopt that there may bodlcrcronL ditliee rrom which dlvldcnd'l thereon, It 11 ny, aholl ba cumulBU \ lo, Ir made cumull \ Uvc . Tho powora, prcflt 1 once 1 , parUc - lpotlng, opdonal, or othCJr rights oroach aueh • orlos or qul \ Uneallon,, Umltatlom. or ritttrlcllon1thc,r,cot, If ur.1y,,11ay differfrom tho»oofany and allolMr ur!ei,al ony LImo 011 l 11 tondlng . SubJccl lo tho 1 JmheUon 11 ot forth In pol't \ ffr 4 ph a or th la urtklo V, tho board ordirector& of tha Cofl)Oratlon ta hcroby oxpronly granted authority to me by rcsol 11 tlon or r � oluUone adopted priortotho Jsr,unncoof II nyshare,oreach pnrtll!ular 11 orluorPrerorrC!d Stock,th � d!!tlgnatlon, powers, prcforfmco . s, 111 d relRllve, p i ullclp,Uing, options! . or other rl 3 hts or thoquallJlc • tlons, llmhatloM, or ra 1 lrlctto 1111 lhi,roof, Includ i ng, without Itmllingtho 1 or . oraftty ofthefoteBOlntr, thoCollowlng : la) Thedl1llnctlvedosJgnallon orend tho numbor ohharet1 or Preforrod St0ek which ah•II C()118Uluto tho a:erlos, whlc:h numbor rmiy bo lncrca11cd (oxcopt a11 otherwlst nxcd by the board or dlrt:elOre) or dccre1u1et1(but no! bolow the II ur11ber or shares thoreotoutstanding) from time \ ottmoby•ction orthoboard of dlreftO'ls; (b} Tho rato and \ Imes at which, and tho torm11and condlt;oru,on which, dlvldond11, If any,on theshares or tho aeriessha : 1 be paid, thoextent of tho preforencot or rolatlor 1 . lf any, or euchdividends tolhodlvidonds payable, on any other class oratocx or 1 orloa or Pror, , rred Stock, and whether such fllvldondsshall bocun,uJatlve or noncumulath,o ; (el The right, 1rany, of tho holdors or&hares or tho serJM tc, convert tht,same Into or 3 •changotho11ame for any ot.hor clau of stock or sorlo9 ()( Prcterred Stock or tt.o Corporation . ind thetormaar . dcondittonsof euchconversion or c,xchangc ; (d) Whether 11h11rc11 or tho � rte& sh111ll be subject to redemption an,; t110 redemption prret,or price., Including, without l i mlt1tlun,• redemption prlco or prices p1111ablo Jn1hare1or any class or 11tock or.sorl � e or J>rcforrcd Stock, cash, or othor proporty and tl - ,1> Um � or times nt which , ond the lermsandcondlllo ns on which, sharesof \ ho scrlOII may borei,eomed; (o) Thoright, nnd proferenee � ortho holdoreof thoshares or tho, . erlce on voluntary or Involuntary liquidation, morgcr, consolidation, distribution or Hie 1 >! • aacte, die 110 lutlon, or winding up orthoCorporation ; 0) Tho torm!I of tho ,Inking fund or redemption or purcJuuc amount, U'any, lo be provided ror11hRres of thoseries;and (gl - rho voting powora,Ifany,oflhc holdora ohh11re11 of tlmseries whlch may, without Umlt1n11ho generall,y or tho foregoing, Include : m tho right to mr1ro or less t.han one voto per 1h11roon anyorall mallor, - � t«I on by tho11horcholdora, Md (il) tl10 right to vote B!I a aeries by ltsolt or together with other serfoe or Preferred Stock or togolhcr with olI aorlcs or Protcrred Stock at a cluson such rnalter1, under suchclrcumslanc:011, and - .>n suchcondition as the board or directors may nx. including, without. limitation, the rlsht, voting 01 a 11erlcs by itself or , . ,: - � - . \ · , • • . ,, :}'iv : • ' • : , n , A ' ; ' . . : � ; ,, • , t I • � , • • , " � _ : ; � £ ; • •/ ,_ .:• f •. •. • ""• •·r .. - , • • • ' - · � - - <. . ; \ ,: , .,,.• •·• - � I. togctho \ · wlth olher series or Preferred Stock or together with all serio 1 or! 11 - cforrtd S 1 ock ee 11 cl 11 . 11 s, to olecLoneor morodlrcctore orthoCorporation In thoevent ora do(aull In tho payment or diYld 11 nd 1 on anyoneor moro 1 : 1 orJc 9 or Preferred Stoc : kor undor 11 uch othorclrcumatanccs andon suchconditionsas the board maydctorrnlno . 2 . CommonSmc : k - Tho Common Stock or 1 ho Corporation shall ho non 1111 Sessablo and • hall havo tho rollowlns powors, pre(ercncee, rl,1hte,quallncatlons,lfmt,aUons, and roatrlc:Uons: fa) Af \ er tho requlrementn with ro1pect to preferential di : - fdtnds or Pro(crred Stock cn, - ec1Inaccordanco with tho provle!cm,of pera11aph I of!his1rtlclo Vl. Ifany•shalIbo mot,lha
1J - · _ . - . ) � : - > - i, ; : - , - ' , . - - - - • - ·, - \ ' } - : : _ · ; / ; - - - _. . , - _ . : · < · . < � T : . : . ': z _ :· - >, \ ,: , ; ; � , ·:. .,: .. ,.,........._. - ,,: .._ H � - • • • •• ,._,, ...... a a . £ .. , ! &.,W::Ji&M:+.•,... ...... _ .. :.i.; , .,_ ... .. . - ...... • - - - · •_ . u . � • - - - U •w• • ••· •"' • • •• • • -- .u • • • - , • • � , ; ; ' ,: 1•f . . � · . :Y ff � t - ;.;. I , � • - , , . . � ,i fl . - , .. - ; i. t,.. � . · � 1 .. . ' - •i,· Corporation comr, 1101 whh all f \ . - qulremonb, lfany, with respect to tho 10 \ tlng aside orrunds In sinking funds or redemption or put ihHe a«ounti, (nxcd In accordonce with the provl 11 lon 1 or paragraph Ua) ot this arLlclo VJ , an, any other c : ondllfona which may be am 11 ed In accordance wllh tho provltlc>ns of paragraph � or this artlcle V are sati!ln ed, then, but not otherwise, tho holdor, ot Common Stock aha II be cnUUcd to receive such dividend 11 , If nny, as may be declared Cror 11 time tolimo by lhe bourr!otdlrcttors ; ·,r � , ,ii; . " · •• · '. j . . > (b) A! \ at dl&trlbutlon In full oflhe pro(orontfal amo.mt Cfl,ied in ocMl!'d11nce with tho .. / provhdons or purafl'•Ph l oCthh1orllcloVI, It any , to be dlslrlbutM to tho holdora or PreCorred Stock In Ula event or a ,;oluntary or lnvolunt.Kry llquld1Uon, dl11 \ rlbutlon or sale ot a&1et11, dissolution or winding up or thoCorporation, the holders or the Common Stock shall bo enllt1cd to recclve all of tho remaining aasott or the Corporation, tanlJible an, \ int 4 ngiblo , of what . Gvor kind avallabfo !or distribution to 9 \ (lj!kholdors,pro rata or . the baals at the number or,hare& or Common $ !()ck held ; and (c) E 111 : opt as may othenriae be required by law, these articles of'Jncorporatlon oft . ho Corporation, or the provisions of thoresolution or resolullons as roay boadopled by the board or direct . or»purauar . t to paragraph I uftlri, arUcto V , in all maUor& aa to which tho votoor consent or etockholdore of the CorpotaUon &hilll bo required to be tekon, tho holden of tho Common Stock ahall havo onevoto per sbar 6 \ or Comm . in Stock held . Cumule . ttve votingon lho election or directors or on any other maltor aubmlttcd t . o the atockl 1 oldcn shall notbopermitted . 3. Other Provlel9n11 {a) Tho rolatlvo powers, prorC1'Cnccs, and rights or each acrtos or Prororrcd Stock In relation to the powt1rs, prororences, and rlght11 or each other 11crlos of Pi:orcrrcd Stotk shall, In ca c hcaso, beasC \ xed from lime totltr . oby tho board ofdlrectort ln � : ,o r e solution or ruolullout adopted purauant toauthority granted In paragraph l or this artlcle Vand the con 11 ent by cle . 88 oreerlos voto or olhcrwJso orthe holdersof nny serlca or !'referred Stock aaare from tlme to Umo outotandlng shall nol bo required fc • r \ he lssuence by thoboard or director& of uny other aeries of Protorrtd Stock whothor tbu powot 1 , proforcnccs, and rlghts of 1 uch othor aeries aha 11 bo fixed by Lhe board or directorsaesenior to or on a p 1 . 1 ,rlty with tho powers, prefe r oncea , and rleh � 0 £ auch outstanding clau or aeries, or 11 ny oi them ; provided, howovcr, that . tho boord or di roe tors may provide In auch rcaoluUon or re 9 olullons adopted with rospect to a ny scrtos or Prorerred StocJc thal the consent ot tho holdera of tho outsiandlng 1 haroa orany cl 11 Ss or ecrics shall bo required tor the Issuance or any or all olher 1 erles or Prc(orred Stock, tho voto required to cons •: tuteconaenl,and the procedure by which consonl 11 hall beobtained . (b) &ubjcet to the provlsloruJ or subp • r • sraph (G) oh . hi . a plltftgraph, ,harosor any claa, of' 9 tOCk or sorlcs of Preferred Stock may ho Issued from llrr . c to limo as tho board of <'!rectors ah 1 tll determine and on such terms and for such con 11 ldcraUon as ahall ho rixed by tho ooard or directors . (cl No holder oC'anyof'thoeh 1 lrea of anycla,sor tcrks ohtock or ofoptlom . 1 n 1 rrnnts . or other rl 1 hts to purcha � o shares of any class or series or stock or orolhcr eccurlllcs or tho Corporation &hall have any preemptive right . to purcha � o or su! . 15 crlbe for any unlssuod i . tock or an>' clas!I or serlc 9 or any addhlonal sharo, or anyclass or scrlcs to b � b,ucd by reason or any lncreHe of the author lied capital a � k ot the Corporillon or ot any class or liCriC 3 , or bonds, CllrUnc"tes or indebtedness, debentures, or othor accuritles convertible into or OllC'hangcablo for stock of the Corporation or any claaoor scrlus, or carrying ony rights to purchuo 11 horcsor any cJal!aoraer ies , but t \ ny liuc : I \ unis : 1 ucd 11 ioch, additional 11 Uthorh . ed lesuo or ehue, or unyclaesor .orlos or 1toek, or accurlUo, convorliblo Into or O" - Char.1eabio ror 1tock carrylna any rl11ht to purchase i;tock, a,ay be Jssued and dl1po1ed of pureuanl to resoluUon or lbeboard or directors to .. _ · - • , , . • ..• _ , :4 ... / . � •. � \ · . , .. . ... � ; - . � : .,· 1 . , � , · · · · · r .. - .. . . ..... . . . , . .
• - ,; . ·=.'_.jf ,. � /: � : � ;: ..>.: � · - •• � . . . ' . :.I ,> - - < � ,;/ � : ;"' \ ·: � � ·; .• ·· - � - \ ":t:.; r � ,: ::,; · - t. •l•i •. 1111 ch p : nond, nr m 11 1 � orporallonN, or a 11 soclRllom 1 anrl 1 Jt 111 uch lcrm 11 a 11 may be deemed 1 ·dvl 111 ,!Jlc by thl' boord ordireclor, in lhe oxcrclse of Its !tOlc clhmollon . (di SubJccL lo lhc rcqulrcmcr,l8 11nd llmlwllons or thecorporation laWll of lhtl 1tftlc or Nevada, the � rporution Hball have lha rlghl to redtiem &h!irtll of J>rororrtid or Common l!totk puraunnL to tho torms and conditions or \ he - HD 11rllcles or lncorporaL!(,n If lhe board ordlr � tors deLer1nlne11, ln Its80lo dlArrotlon, ll111t such action lg necesllltalt!d by II sharchold11r'11inubilhy lo obt«ln any llcf!n11ln1 or r,f·d,1tory approval required In order for lllo Corporation to meet tho t1Rmlng rcqulremcnte In any 11tatc In whlth tho Corporation I& thon nnKagi?d or 11roposoA lo cngego ingamingor11imJlnr nctivitlce requiring11uch llcon•lng. Slv - lro11o(l'ro(crrcd or Common Sl'1Ck aro !lubjcct to rcd!lmptlon by the Corporation on 30d3ys' � ,rltwn notice 11peclry1ng tht• dawon which thcsharea 11h1ell bo redeemed, subject to the rli,htor11uch flharrholdor durlhg � uch 30 - dey period tosell or otherwl 11 c dispose orsuch 11 haro 1110 such <Jil � i,arty or p 1 Jrtlo& and ror such price 11 nd on euch terrn 11 tmd condlllon • Rtt m 11 y be � ccopla'olc to ,·meh ul : arohollier . 'rhc (',orporaUon may rcdcom a JIOrUon or all of tl 10 l 811 uod and oulslf,ndlng shares of a 11 h 11 n : holdcr subject to tho llmltat . lons and � ndltions herein . Tho redrmplltn docs not havo lfJ boon A pro tata basis . 'l'hc rcdcmptlun prlco shRII bo based on the flllr marl,ot value for such Bhar 68 o . tho clo!tc ofbuulnesi on theday prior to the data or the ' . ,otlcc of recomption a,,d dctermlntd by tho medium between thoclOlllng bid and a 11 kedquoiatlons for 11 uch stock lln tho close ofbuelno 11 s or 1 such dute, if lht> atcck ls thl?n quoted in1.tn lntcrdculcr quolet.on medium or, nthorwlso, at tho net book valuo p<,r sharo of thr Corpor11.ll1>n us of tho ond ,,r Its most recent fiscal your a, reported on th(! Corporation's m.)St regular flnuncl1d srat&mont..<s, which nctid noLbe audited. In all lnlll.ancc!I the board ordlrt'ctors slutll havo complete authority :.0 detormln<! upon and t8ko tho ne � e!lllry proceedings fully to cffcc � the redemption of tho al - iares selec � d for redemption and the C11.ncollatlon of tho c, rllncatcs ropro&antlng such .shares and any such action by tho board of directors shall, ih the llbsonco orrruud, be deemed conclu11lvo. Upon thccomplclion of such redemption, tho rights of hoHers or thesharee or Pntorred or Common SkN:k whleh hava l111Yo been redeemed and Cllllcd ln sh11ll In all rcapccts cone, e•eopt that eueh holders shall bo er.till1:d to recol." lh(; redllmptlon price for tholr shore&. Whonever any aha.re& of Proforred or < .; Qmmon Stock oflhe Corporation aro redeemed as heroin uuthorh ; ed, the Corporation may, by reaolution er It • · board ot "!rectors, cencol such ahao : - 011 and roturn thom to tho etatus of autboriiod but unlssucdshares . ThercdompUon price·,hall bepaid Incash . ARTIC1,E \ '1 TRANSACTIONS WITH OFFICRllS AND DIRECTORS No contract or olhor tran : iactlon bctweon thu C .. 1 rpor 11 tlon and any otlior nrm or cor ; x,raUon aha 1 t be t' \ ffcctcd by tho Cnct tbnL a director or oRlccr or tho Corporation has an Interest In, or le a dlrecl . or or omcor of, such other firm or corporatlt - n . Any officer or director, ir . dl,ldually or with Q \ hi : if,, mRy b, : a l"flfly to,"" mo,y h( \ ' � l' an fnt - ere � t In, any trtms 11 ctlon of tho Corporation or any transacllon in which the Corpora . lion la - 'l parly or tlae an lnlcrc 11 t . i - ! 11 . ch person who ta now or mlly become an officor or dir 1 ?Ctor or tho Corpora&lon I . A horeby relieved rrom Uabillty that he might oth<!rwlse incur In thoevcmt such <Jffiter ordlr 1 ?ctor � ntracl . A with the Corporollon, Indlvldmslly or In behailoranother corpornllun or cnllly in which homay bavo an lntereift .; pro 1 Jided, thal such officer or director acls Ingood fl)ith . ARTICLE VII 1,11 \ UTATION ON t.lAE,LtTY Adirector or officer of lhe Corpot11tlon shftll hove no personal II11bUlty to tho Corporatlon or lta � kholdou ror d.umago• fol" broach ornducl11r1 du \ )' at II director or officer, OKCOpt (or d11m11ao1 for breach or Oduclary duty rcsuitln; from (a) acts or omlulon& which lnvolvo lntc1,1lonal misconduct, ·4· ' -- � - ;, • l • � � fl ':,4_ :l( .. .. _r ! . " � , _ l .• d - � '. ,, ,""'. ' . • < � - : , . - \ . : � ?j � z:u.. ,:... ·:: - ' .· /·,
I • tGi1f ARTJCI.F. K A: \ 11 - ;Nl>Mf;NTS ·rtie C',orporl \ tlon te!M \ lt? 9 Lhe right to am,md, alter, change, or repeal llll or an)' portion of lhe prov' . slon!I c 1 mtoi ncd in these artlc : le!i or incorpor 11 . Uon rrom time to \ Imo In 9 ccordonco wllh th" lawu of thp state of Novoda, and all riuhts conrorrcd on slockholdors horeln nrl? granted subjc •. l to this re � rvallon . ARTlCI.F. XI ADOPTION OR AMENIJMF.N'l' OP RYl,AWS Th � Initial byl"ws of the CorporaUon shall bo adopted by tho boatd or dlreetot's. 'l'ho powct to 11ltcr, amend, or repul lho bylaws or adopt new bylaws shall be vestod m 1110 board ordlrcc:tore, bul the alockholdera of th � Curporatlon may alt10 alter,amend, or repeal tho bylaw, or ado pl new bylRws. Tho byluws mtlf contnln any provisions for lho regulallo'I or managtunenL or Lhc actalre or lho C,,r()lltt \ llon not incon!llstuni wlth tht. 1aw11 or tho 9lato of Nevad � now or harcal't.or eds Ung. - , , .. . � . '. ... l � ._ ·:,.. .. - . � · - ... . - � . lr >k,,, : � , : . . � i � \ frattd, or .A knowing vlolutlon oC111w, or llJJ Lho pia, - mo'.lt of dlvldond!I In Ylol11Uon of 11cctlon 78.300 of the Nov11d11, llovl1cd Statute!!, a;i it rnay rrom limo w ttmo be 11ml!nd«I or any 1111ccusor provl•lon thorct.o. ARTICl,F. VIII fNm:MN lFICATION OF OIIIIICF.R8, lUIU!CTOR9, AND OTHERS The Corporation 11 h 1 dl hMc the power ltJ indomnlfy c • eh dlrcclc,r, offict!r, omployco, or • gontor the Corporation an � their r 1 : 1 J ; i � ctlvc helrlJ, administrators, and cnm : uton against all llubllltlca and c 11 pon 50 s rcasonttbly Incurred In connccllon with 11 ny Aellon, sull, or proceeding ta which he may be m 1 ul . i, u party by rc 11 son of hi 11 bu!ng or having been I \ director, officer, omployuo, or egcnl or lho Cof]) \ )rcttlon, IA t . ho futI OKlcnt perm lttcd by tho l 11 wa or the 11 luto or N ovt � da now exl � llng or Y!I !luch !awe may horcnne : r be smcndcd AllTICl,J.. � IX n EOlSTERED OPflCt - : AN1't mml&TERED AGENT Th'l oddruitit ot the Corporation's r,rinclpo . l o! . f 1 ce in the state of Ncvad 11 ht 241 Ridge Street, lleno, Ncvadu 895 Dt : i . Tho name and aC : dress of IL'I Jt,llla 1 r � ldent 11 gcnt la Siems Corporate 6 orvlcoe . Either lherogiisl()redomceor the rcshhm � agent m 11 ,y bo changrul In tho manner provided by law . ART(CLRXII DIRECTORS Thogov ; i"fling board of theCorporation 1 hall hoknown of! lt \ e bourd or dlrecton . Tho number or dlrcttoracomprleingtho b?ardordlrec : torsah : ill be nxedand mily holnt : roased or decreased from Um � t � tlmo In \ ho manner provided In tho bylawiJvhho CorporuUofl, except that at no limo shllll lhore ho lei ; s than three directore . The original board ofdlrceto � shalIcor 1 slsL or thrco porl : lOns . Tha nttmc and addres : J orc ach pcriJOn who la to 1 M 1 rvo iii director until tho nri ; t annual meeting of el( . ,,ckholdcre and \ lnttl h 11 or her t 11 C(e 1 t 0 r hael � ted anc \ 1 h 11 II qu • llry I • 11 r 11 llow 11 : ·If;::. );· � :i � :· � ... . , � > .... � . - . : - ;..,,._, - . ' • ,1 , ' . .i , � •r •· •• \ . � :1?}. - :,,
Hooort o. ncrry Kuvln M. Ucrry .Juhn T.,Jenkin � Addn.'5!'1 3701 Fairview!load Rcno,Novada 89511 8701 l - \ drvlow lloltd Hcno, Nova.di \ 8951I 72711,fountaln Moss f.011 Vegas,Novado 80117 AR'l'ICI.V. XIII INCOHPOHA.TOHH The nt1mo11nd malling oddre,e of thesololnco1110rotor slgnlng these artlclet1or lncorporotlon h, n11fullow11: j, � ,, I ► T··• i .' 'I - . - ..( . - - ;.r - � \ - ; !{::!.t, ., '1t: . � ,, fl �� :'"_:i ··1 � t � - f - .. • ,,,., , ,' , :... 1 .. 1 ;j . . �� · - · ! � 'i. � :j'f � - ·· - � . • •· ( �� ' ff � ' > - ';r.·. � t � f - ;_' � './ � 2 . I . · ....:.. � . � . ?! ' ------- " � P")' - lleC - llobol".O. Horry 3701 f'alr,,low ltoad Rono, Ncv,1da 89511 I tlloundcnlgned, bolng lha eolo lncorporlltor orth0Corpo,o.1lan hf!roln bcforo named, di) rnako unct file tho.5e arUclcs of lncorpor11tlon, hercby declaring lh11 \ thofacts heroin urCJ trm.1. UI \ TJ - :D LhJa 2nddny or Dccombor, 1991. STATEOF UTAH COUNTY OFSALT LAKP. ) I OS ) Addr919 On 2 nd Cl&)' or December, 1991 , pononally appuar � befora me, Lh • t undoralgnod not 1 uy puhllc, Hobert 0 . llerry, who bolng by mo tint duly itworn, declared that ho h 1 the sole lncorpunllor of GnrncPlan, 1 n .:. , Lh 11 t he signed tho fcrer,olng arllcles or incorporalbn, und th 11 t thu i,tntrrnont ;; ro 111 tllnc : d therein arc true . - - . � - � · � , ... ' ' i' .. � � : � . RECElV � CJ.·, � � D£C2 6199l seerotarv ol State :: . :··,. \ . - ·.. . � '. - •. ,:_:;:_, \ " \ t � .,. .· i.:· ,· .• • . i: .. � • '. ' ;: :•., � � . ( �� ,;, 'I, � · . . i � ::._ � s, - � - - ; . •.· ,a, � ' � J : i . ! .. ! ,, ' .... � '·' � - ,: t J1 , ., ·, . • � .) · : - t..J � ·• - ·.._ I ii ,, i .,
Copy Request Exception List Copy Request Filing Date: Work Order Item Number: Copy Request Number: 01/20/2020 W2020012000418 356885 Online images for the following document numbers were unavailable and are not included with this request. Copies of these documents will be delivered at a later date under a separate cover. We apologize for any inconvenience. Number Of Pages Found Expected Number of Pages Doc ID Transaction Type Filing Number Filing Date/Time 0 1 16044509 Noncommercial Registered Agent - Statement of Change C11927 - 1991 - 006 02/13/1996 BARBARA K. CEGAVSKE Secretary of State KIMBERLEY PERONDI Deputy Secretary for Commercial Recordings STATE OF NEVADA OFFICE OF THE SECRETARY OF STATE Commercial Recordings Division 202 N. Carson Street Carson City, NV 89701 Telephone (775) 684 - 5708 Fax (775) 684 - 7138 North Las Vegas City Hall 2250 Las Vegas Blvd North, Suite 400 North Las Vegas, NV 89030 Telephone (702) 486 - 2880 Fax (702) 486 - 2888
Exhibit 3.6
Filed in the Office of Secretary of State State Of Nevada Business Number C11927 - 1991 Filing Number 20211368547 Filed On 4/6/2021 12:28:00 PM Number of Pages 4
• BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701 - 4201 (775) 684 - 5708 Website: www.nvsos.gov Profit Corporation: Certificate of Amendment (PURSUANT To NRs 1s.38o & 78.385/78.390) Certificate to Accompany Restated Articles or Amended and Restated Articles cPuRsuANT To NRs 78.403) Officer's Statement (PURSUANT To NRs 80.030) - - Date: [ 04/ _ 15/2021 I Time: j l ! (must not be later than 90 days after the certificate is filed) 4. Effective Date and Time: (Optional) Changes to takes the following effect: [Kl The entity name has been amended. D The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) □ The purpose of the entity has been amended. □ The authorized shares have been amended. O The directors, managers or general partners have been amended. 0 IRS tax language has been added. 0 Articles have been added. O Articles have been deleted. n Other. The articles have been amended as follows: (provide article numbers, if available) ! First: The name of the corporation is Athena Bitcoin Global L - .. • · · - · · · · · • .. - · - . - • · · · · ...· · - · · · · · - · - ···· - ·· · - · (attach additional page(s) if necessary) 5. Information Being Changed: (Domestic corporations only) X ;: ,z_t:J ./? I Chief Executive Officer i 6. Signature: (Required) Signature of Offie'er or Author. · ed Signer Title X � \ President I � Qward w;it1hi':l;!S r Mi ( 1.2 1 20 � 1 1 � : 2 � P!i?Tl I Signature of Officer or Authorized Signer Title *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares , then the amendment must be approved by the vote, in addition tc the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof. Please Include any required or optional information In space below: (attach additional page(s) if necessary) This form must be accompanied by appropriate fees. . P Ŷ ge2of2 Revised: 1/1/2019
Exhibit 10.3
ATHENA BITCOIN, INC. 2016 EQUITY INCENTIVE PLAN
1. Purpose; Eligibility.
1.1 General Purpose. The name of this plan is the Athena Bitcoin, Inc. 2016 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to (a) enable Athena Bitcoin, Inc. a Delaware corporation (the “Company”), to attract and retain the types of Employees who will contribute to the Company's long range success; (b) provide incentives that align the interests of Employees with those of the shareholders of the Company; and (c) promote the success of the Company's business.
1.2 Eligible Award Recipients. The persons eligible to receive Awards are the Employees of the Company.
1.3 Available Awards. Awards that may be granted under the Plan include: (a) Incentive Stock Options, and (b) Non-qualified Stock Options.
2. Definitions.
“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
“Award” means any right granted under the Plan, including an Incentive Stock Option or a Non-qualified Stock Option.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cause” means, unless the applicable Award Agreement provides otherwise:
With respect to any Employee: (a) If the Employee is a party to an employment or service agreement with the Company or an Affiliate and such agreement provides for a definition of Cause, the definition contained therein; or (b) If no such agreement exists, or if such agreement does not define Cause: (i) failure to perform such duties as are reasonably requested by the Board; (ii) material breach of any agreement with the Company or an Affiliate, or a material violation of the Company's or an Affiliate's code of conduct or other written policy; (iii) commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (iv) use of illegal drugs or abuse of alcohol that materially impairs the Participant's ability to perform his or her duties to the Company or an Affiliate; or (v) gross negligence or willful misconduct with respect to the Company or an Affiliate.
With respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following: (a) malfeasance in office; (b) gross misconduct or neglect; (c) false or fraudulent misrepresentation inducing the Director's appointment; (d) wilful conversion of corporate funds; or (e) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
“Change in Control” means: (a) The acquisition (whether by purchase, merger, consolidation, combination or other similar transaction) by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% (on a fully diluted basis) of the combined voting power of the then outstanding voting securities of the Company; provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company or any Affiliate, (B) any acquisition by any employee benefit plan sponsored or maintained by the Company or any subsidiary, (C) in respect of an Award held by a particular Participant, any acquisition by the Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the Participant); or (D) the acquisition of securities pursuant to an offer made to the general public through a registration statement filed with the Securities and Exchange Commission; or (b) The sale, transfer or other disposition of all or substantially all of the assets of the Company to any Person other than an Affiliate.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
“Committee” means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.4 and Section 3.5.
“Common Stock” means the common stock, $0.01 par value per share, of the Company.
“Company” means Athena Bitcoin, Inc., a Delaware corporation, and any successor thereto.
“Consultant” means any individual who is engaged by the Company or any Affiliate to render consulting or advisory services, whether or not compensated for such services.
“Continuous Service” means that the Participant's service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.
“Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of the Company or any of its Affiliates; (ii) any activity that would be grounds to terminate the Participant's employment or service with the Company or any of its subsidiaries for Cause; (iii) the breach of any non-competition, non-solicitation, non-disparagement or other agreement containing restrictive covenants, with the Company or its Affiliates; (iv) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion; or (v) any other conduct or act determined to be materially injurious, detrimental or prejudicial to any interest of the Company or any of its Affiliates, as determined by the Committee in its sole discretion.
“Director” means a member of the Board.
“Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.9 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to Section 6.9 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.
“Disqualifying Disposition” has the meaning set forth in Section 13.10.
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“Effective Date” shall mean the date as of which this Plan is adopted by the Board.
“Employee” means any person, including an officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto.
“Fair Market Value” means, on a given date, (i) if there is a public market for the shares of Common Stock on such date, the closing price of the shares as reported on such date on the principal national securities exchange on which the shares are listed or, if no sales of shares have been reported on any national securities exchange, then the immediately preceding date on which sales of the shares have been so reported or quoted, and (ii) if there is no public market for the shares of Common Stock on such date, then the fair market value shall be determined by the Committee in good faith after taking into consideration all factors which it deems appropriate, including, without limitation, Sections 409A and 422 of the Code.
“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
“Non-qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
“Permitted Transferee” means: (a) a member of the Optionholder's immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionholder's household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than 50% of the voting interests; or (b) such other transferees as may be permitted by the Committee in its sole discretion; provided that, unless otherwise determined by the Committee, no person shall be a Permitted Transferee unless he or she executes and becomes a party to the Shareholders' Agreement.
“Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
“Plan” means this Athena Bitcoin, Inc. 2015 Equity Incentive Plan, as amended and/or amended and restated from time to time.
“Shareholders' Agreement” means the Shareholders' Agreement by and among the Company and its shareholders, dated September 1, 2015, as in effect from time to time.
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.
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3. Administration.
3.1 Authority of Committee. The Plan shall be administered by the Committee or, in the Board's sole discretion, by the Board. Subject to the terms of the Plan, the Committee's charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee shall have the authority:
(a) to construe and interpret the Plan and apply its provisions;
(b) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(d) to delegate its authority to one or more officers of the Company;
(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date;
(f) from time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;
(g) to determine the number of shares of Common Stock to be made subject to each Award;
(h) to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
(j) to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant's rights or increases a Participant's obligations under his or her Award or creates or increases a Participant's federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant's consent;
(k) to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company's employment policies;
(l) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
(m) to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(n) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.
3.2 Acquisitions and Other Transactions. The Committee may, from time to time, assume outstanding awards granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (i) granting an Award under the Plan in replacement of or in substitution for the award assumed by the Company, or (ii) treating the assumed award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such assumed award shall be permissible if the holder of the assumed award would have been eligible to be granted an Award hereunder if the other entity had applied the rules of this Plan to such grant. The Committee may also grant Awards under the Plan in settlement of or in substitution for outstanding awards or obligations to grant future awards in connection with the Company or an Affiliate acquiring another entity, an interest in another entity, or an additional interest in an Affiliate whether by merger, stock purchase, asset purchase or other form of transaction.
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3.3 Committee Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
3.4 Delegation. The Committee, or if no Committee has been appointed, the Board, may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.
3.5 Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Directors appointed to the Committee from time to time by the Board.
3.6 Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney's fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.
4. Shares Subject to the Plan.
4.1 Subject to adjustment in accordance with Section 10, a total of 135,000 shares of Common Stock shall be available for the grant of Awards under the Plan, all of which may be granted as Incentive Stock Options. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.
4.2 Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.
4.3 Any shares of Common Stock subject to an Award that is canceled, forfeited or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan. Notwithstanding anything to the contrary contained herein: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option or (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation.
4.4 If the Committee authorizes the assumption of awards pursuant to Section 3.2 or Section 11.1 hereof, the assumption will reduce the number of shares available for issuance under the Plan in the same manner as if the assumed awards had been granted under the Plan.
5. Eligibility.
5.1 Eligibility for Specific Awards. Incentive Stock Options may be granted to Employees only. Awards other than Incentive Stock Options may be granted to Directors and Employees.
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5.2 Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110% of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable after the expiration of five years from the Grant Date.
6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:
6.1 Term. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after the expiration of 10 years from the Grant Date. The term of a Non-qualified Stock Option granted under the Plan shall be determined by the Committee; provided, however, no Non-qualified Stock Option shall be exercisable after the expiration of 10 years from the Grant Date.
6.2 Exercise Price of An Incentive Stock Option. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.
6.3 Exercise Price of a Non-qualified Stock Option. The Option Exercise Price of each Non-qualified Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code.
6.4 Method of Exercise. The Option Exercise Price shall be paid, to the extent permitted by Applicable Laws, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve: (i) by delivery to the Company of other shares of Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired; (ii) by a “net exercise” procedure effected by withholding the minimum number of shares of Common Stock otherwise issuable in respect of an Option that are needed to pay the Option Exercise Price; (iii) by any combination of the foregoing methods; or (iv) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the Option Exercise Price that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of Common Stock that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).
6.5 Transferability of An Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.6 Transferability of a Non-qualified Stock Option. A Non-qualified Stock Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Stock Option does not provide for transferability, then the Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
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6.7 Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
6.8 Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Optionholder's Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date six months following the termination of the Optionholder's Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.
6.9 Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder's Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 6 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.
6.10 Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder's Continuous Service terminates as a result of the Optionholder's death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder's death, but only within the period ending on the earlier of (a) the date 6 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder's death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.
6.11 Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Stock Options.
6.12 Detrimental Activity. Unless otherwise provided in an Award Agreement, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable on the date on which an Optionholder engages in Detrimental Activity.
7. Securities Law Compliance.
7.1 Securities Registration. No Awards shall be granted under the Plan and no shares of Common Stock shall be issued and delivered upon the exercise of Options granted under the Plan unless and until the Company and/or the Participant have complied with all applicable federal and state registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction.
7.2 Representations; Legends. The Committee may, as a condition to the grant of any Award or the exercise of any Option under the Plan, require a Participant to (i) represent in writing that the shares of Common Stock received in connection with such Award are being acquired for investment and not with a view to distribution and (ii) make such other representations and warranties as are deemed appropriate by counsel to the Company. Each certificate representing shares of Common Stock acquired under the Plan shall bear a legend in such form as the Company deems appropriate.
8. Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.
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9. Miscellaneous.
9.1 Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
9.2 Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until such Participant has satisfied all requirements for exercise or settlement of the Award pursuant to its terms (including any obligation to execute the Shareholders' Agreement) and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in Section 10 hereof.
9.3 No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
9.4 Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee's right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
9.5 Withholding Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company's right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company.
10. Adjustments Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and the maximum number of shares of Common Stock subject to Awards stated in Section 4 will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 10, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 10 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 10 will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code.
11. Effect of Change in Control.
11.1 In the event of a Change in Control, the Committee may, but shall not be obligated to:
(a) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of any Award;
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(b) cancel Awards and cause to be paid to the holders of vested Awards the value of such Awards, if any, as determined by the Committee, in its sole discretion, it being understood that in the case of any Option with an Option Exercise Price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor;
(c) provide for the issuance of substitute Awards or the assumption or replacement of such Awards; or
(d) provide written notice to Participants that for a period of at least ten days prior to the Change in Control, such Awards shall be exercisable, to the extent applicable, as to all shares of Common Stock subject thereto and upon the occurrence of the Change in Control, any Awards not so exercised shall terminate and be of no further force and effect.
11.2 The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.
12. Amendment of the Plan and Awards.
12.1 Amendment of the Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 10 relating to adjustments upon changes in Common Stock and Section 12.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.
12.2 Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.
12.3 Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.
12.4 No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
12.5 Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
13. General Provisions.
13.1 Clawback; Forfeiture . Notwithstanding anything to the contrary contained herein, the Committee may, in its sole discretion, provide in an Award Agreement or otherwise that the Committee may cancel such Award if the Participant has engaged in or engages in any Detrimental Activity. The Committee may, in its sole discretion, also provide in an Award Agreement or otherwise that (i) if the Participant has engaged in or engages in Detrimental Activity, the Participant will forfeit any gain realized on the vesting, exercise or settlement of any Award, and must repay the gain to the Company and (ii) if the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), then the Participant shall be required to repay any such excess amount to the Company. Without limiting the foregoing, all Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with Applicable Laws.
13.2 Shareholders' Agreement. In connection with the grant, vesting and/or exercise of any Award under the Plan, the Committee may require a Participant to execute and become a party to the Shareholders' Agreement as a condition of such grant, vesting and/or exercise. The Shareholders' Agreement may contain restrictions on the transferability of shares of Common Stock acquired under the Plan (such as a right of first refusal or a prohibition on transfer) and such shares may be subject to call rights and drag-along rights of the Company and certain of its investors. The Company shall also have any repurchase rights set forth in the Shareholders' Agreement or any Award Agreement.
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13.3 Sub-plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
13.4 Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
13.5 Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of Section 10.
13.6 Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time.
13.7 No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.
13.8 Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.
13.9 Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant's termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant's separation from service (or the Participant's death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
13.10 Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.
13.11 Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant's death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant's lifetime.
13.12 Expenses. The costs of administering the Plan shall be paid by the Company.
13.13 Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
13.14 Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.
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13.15 Non-Uniform Treatment. The Committee's determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.
14. Termination or Suspension of the Plan. The Plan shall terminate automatically on October 1, 2025. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 12.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
15. Choice of Law. The law of the State of Illinois shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state's conflict of law rules.
As adopted by the Board of Directors of Athena Bitcoin, Inc. on October 1, 2015
As approved by the shareholders of Athena Bitcoin, Inc. on October 1, 2015.
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Exhibit 10.5
LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT THIS LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT (the “ Agreement ”) is entered into and effective as of the date last written below (the “ Effective Date ”), by and among Athena Bitcoin Global, a Nevada corporation (the “ Company ”), its subsdidiary Athena Bitcoin, Inc . (“ Subsidiary ”), a Delaware corporation, and Eric Gravengaard, an executive officer and director and more than 10 % shareholder of the Company and Subsidiary (“ Key Holder ”), on the one hand, and Mike Komaransky, a Florida individual (the “ Lender ”) and KGPLA Holdings LLC, a Delaware limited liability company (the “ Lead Investor ”), on the other hand, in respect of : (i) that certain Loan Agreement dated August 22 , 2018 by and between Subsidiary and Lender (the “ Bitcoin Loan Agreement ”) ; (ii) that certain Securities Purchase Agreement dated January 31 , 2020 by and among Company and Subsidiary, on the one hand, and the investors listed therein including Investor (the “ Purchase Agreement ”) ; and (iii) that certain Voting Agreement dated January 31 , 2020 by and among Company, the Lead Investor and Key Holder (the “ Voting Agreement ”) . Company, Subsidiary, Key Holder, Lender and Investor shall be individually referred to herein as a “ Party ” and collectively referred to herein as the “ Parties ” . All capitalized terms used herein, otherwise not defined, shall have meanings set forth in the Loan Agreement (unless otherwise indicated herein) . RECITALS A. WHEREAS, under the Loan Agreement, the Lender made a loan to Subsidiary (the “ Bitcoin Loan ”) in the principal amount of thirty ( 30 ) bitcoin at an annual interest rate of 13 . 5 % (the “ Interest Rate ”) and a maturity date of August 22 , 2019 (the “ Loan Maturity Date ”) ; B. WHEREAS, on January 30 , 2020 , the Company closed the share exchange transaction with Subsidiary and Subsidiary’s shareholders and lenders, pursuant to which Subsidiary became a majority - owned and controlled subsidiary of the Company ; C. WHEREAS, on January 31 , 2020 , the Company and Athena, on the one hand, and on the other hand, the Lead Investor, an entity controlled and beneficially held by the Lender, entered into Purchase Agreement, pursuant to which the Lead Investor acquired a convertible debenture (the “ CD ”) on the same date in the principal amount of $ 3 , 000 , 000 (the “ CD Amount ”) at annual interest rate of 8 % and with a maturity date of sixty ( 60 ) months from the date of the Purchase Agreement subject to the terms and conditions of the Purchase Agreement and the CD ; D. WHEREAS, on February 4 , 2020 , Swingbridge Crypto III LLC subscribed under the Purchase Agreement for a convertible debenture substantially similar to the CD in the principal amount of $ 125 , 000 , but no further subscriptions occurred prior to the expiration of the offering contemplated under the Purchase Agreement, and as of immediately prior to the Effective Date there have been no amendments to the Purchase Agreement or the CD ; E. WHEREAS, the Loan Agreement has not been amended by the Lender and Subsidiary as of immediately prior to the Effective Date and, although the Loan Maturity Date has passed and a significant portion of the Loan Amount remains outstanding as of immediately prior to the Effective Date, Subsidiary and the Lender acknowledge that the Lender has not declared a default of the Loan Agreement and that Subsidiary has made, as of the Effective Date, made nine ( 9 ) payments to the Lender toward principal reduction in the total amount of $ 315 , 000 , such that as of the Effective Date, the outstanding Loan Amount is 21 . 65096562 bitcoin (the “ Bitcoin Loan Amount Balance ”) ; F. WHEREAS, Company and Subsidiary have requested that the Lender not declare a default under the Bitcoin Loan Agreement and exercise its rights and remedies thereunder and under applicable law, agree to modify the payment terms related to the Bitoin Loan Amount in a manner that Key Holder believes will allow Page 1 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 6
Subsidiary to repay the Bitcoin Loan on a timely basis, and in connection therewith, the relevant Parties to the Purchase Agreement and the Voting Agreement desire to amend such agreements simultaneously; and G. WHEREAS, the Parties acknowledge that the Lender is currently a director on the Board of Directors of the Company (the “ Board ”) and, as the principal of the Lead Investor under the Purchase Agreement, and pursuant to the Voting Agreement and the Company’s Amended and Restated Articles of Incorporation as amended and currently in effect, has appointed two ( 2 ) other directors on the Board, and that, given the nature of the transactions which Company and Subsidiary by and through Key Holder as CEO of Company and Subsidiary have requested hereunder and their effects on the rights and obligations of Company and Subsidiary, that the Parties believe all transactions should be specially approved on behalf of the Company in respect of their terms being fair and in the best interest of the Company and its shareholders, separately by Key Holder and Edward Weinhaus (the “ Disinterested Directors ”) in accordance with the applicable provisions of Section 78 . 140 of the Nevada Revised Statutes . AGREEMENT NOW, THEREFORE, in consideration of the mutual promises and understandings hereafter set forth, the receipt and sufficiency of which is hereby acknowledged by the Parties, IT IS AGREED AS FOLLOWS: 1. Bitcoin Loan Amendment . Upon (a) the approval by written consent of the Disinterested Directors, in the form reasonably acceptable to the Company’s board of directors (including Lender and the Disinterested Directors), of not less than all of the Distinterested Directors, and (b) thereafter concurrently with and conditioned upon the execution and delivery by Company and Subsidiary of that certain First Amendment to the Loan Agreement attached to this Agreement in the form of Exhibit A (the “ Bitcoin Loan Amendment ”), the Purchase Agreement Amendment (defined below) and the Voting Agreement Amendment (defined below) (collectively, the “ Bitcoin Amendment Conditions ”), the Lender agrees to execute and deliver the Bitcoin Loan Amendment to amend the terms of the Loan Agreement as stated therein, provided that, for clarification, unless otherwise expressly provided in this Agreement or the Bitcoin Loan Amendment, no other terms of the Bitcoin Loan Agreement shall be modified, and Company and Subsidiary hereby reaffirm the Bitcoin Loan and the Bitcoin Loan Amount Balance due to the Lender . For further clarification, the Lender shall not be obligated to enter into the Bitcoin Loan Amendment unless and until the Bitcoin Amendment Conditions are satisfied as contemplated in this Section 1 . 2. Purchase Agreement Amendment . Upon (a) the approval by written consent of the Disinterested Directors, in the form reasonably acceptable to the Company’s board of directors (including Lender and the Disinterested Directors), of not less than all of the Distinterested Directors, and (b) thereafter concurrently with and conditioned upon the execution and delivery by Company of that certain First Amendment to the Purchase Agreement attached to this Agreement in the form of Exhibit B (the “ Purchase Agreement Amendment ”), the Bitcoin Loan Amendment and the Voting Agreement Amendment (collectively, the “ Purchase Agreement Amendment Conditions ”), the Lead Investor agrees to execute and deliver the Loan Amendment to amend the terms of the Loan Agreement as stated therein, provided that, for clarification, unless otherwise expressly provided in this Agreement or the Purchase Agreement Amendment, no other terms of the Purchase Agreement or the CD shall be modified, and Company hereby reaffirms the CD and the CD Amount due to the Lead Investor . For further clarification, the Lead Investor shall not be obligated to enter into the Purchase Agreement Amendment unless and until the Purchase Agreement Amendment Conditions are satisfied as contemplated in this Section 2 . 3. Voting Agreement Amendment . Upon (a) the approval by written consent of the Disinterested Directors, in the form reasonably acceptable to the Company’s board of directors (including Lead Investor and the Disinterested Directors), of not less than all of the Distinterested Directors, and (b) thereafter concurrently with and conditioned upon the execution and delivery by Company and Key Holder of that certain First Amendment to the Voting Agreement attached to this Agreement in the form of Exhibit C (the “ Voting Agreement Page 2 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 6
Page 3 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 6 Amendment ”), the Bitcoin Loan Amendment and the Purchase Agreement Amendment (collectively, the “ Voting Agreement Amendment Conditions ”), the Lead Investor agrees to execute and deliver the Voting Agreement Amendment to amend the terms of the Voting Agreement as stated therein, provided that, for clarification, unless otherwise expressly provided in this Agreement or the Voting Agreement Amendment, no other terms of the Voting Agreement (or, correspondingly, Company’s article of incorporation or bylaws, as the case may be) shall be modified, and Company and Key Holder hereby reaffirm the Voting Agreement and Lead Investor’s right thereunder . For further clarification, Lead Investor shall not be obligated to enter into the Voting Agreement Amendment unless and until the Voting Agreement Amendment Conditions are satisfied as contemplated in this Section 3 . 4. Miscellaneous . (a) Further Instruments . The Parties shall execute and deliver further instruments, documents or papers and shall perform all acts reasonably necessary or proper to carry out and effectuate the terms of this Agreement as may be required by the terms of the Agreement or as may be reasonably requested by any Party to this Agreement . (b) Confidentiality . Except for such disclosure as may be required by judicial or administrative process or by applicable law (including federal and state securities laws), as may be permitted by the terms of this Agreement or the terms of the Bitcoin Loan Agreement, the Purchase Agreement and/or the Voting Agreement, as the case may be, or as otherwise may be necessary or appropriate to carry out or enforce the terms and conditions of this Agreement, each Party agrees that it shall use all commercially reasonable efforts to maintain, and to cause its subsidiaries, affiliates, parents companies, principals, officers, directors, shareholders (and assigns) or agents to maintain, in confidence the terms of this Agreement . (c) Counterparts . This Agreement may be signed in two or more counterparts, each of which shall be an original, and all of which shall be deemed one instrument, and counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U . S . federal ESIGN Act of 2000 , e . g . , www . docusign . com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes . (d) Independent Legal Advice . Each of the Parties represents and warrants that they have been advised to seek advice from independent legal counsel of their own choosing regarding this Agreement and its terms and language, and that they have been represented by counsel or had the opportunity to be represented by counsel of their own choosing in negotiations for and in the preparation of this Agreement . Each of the Parties represents and warrants that they have read this Agreement or had it read to them by counsel, or that they have had this Agreement explained to them by counsel and that they are fully aware of the contents and legal effect of this Agreement . Each of the Parties understands and acknowledges the significance and consequence of these releases and covenants not to sue and the Parties hereto, and each of them, expressly consent that this Agreement, the releases set forth herein and covenants not to sue shall be given full force and effect according to each and all of their express terms and provisions, including those relating to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action hereinabove specified . (e) No Reliance . No Party has made any statement, representation or promise, other than as expressly set forth herein, to any other Party in entering into this Agreement, which has been relied upon by any other Party in entering into this Agreement . (f) Assignments . Except as specifically provided otherwise in this Agreement, neither this Agreement nor any right or obligation herein shall be assignable (voluntarily, involuntarily, by judicial process,
Page 4 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 6 operation of law, or otherwise), in whole or in part, by any Party without the prior written consent of all other Parties. (g) Modification . Any modification, alteration or amendment of this Agreement shall be invalid unless it is in writing, specifically refers to this Agreement, and is signed by all of the Parties or their respective successors and permitted assigns . The requirement of a writing may not be orally waived . (h) Waiver . Any Party may specifically and expressly waive in writing any portion of this Agreement or any breach hereof, but only to the extent such provision is for the benefit of the waiving Party, and no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision . The consent by one Party to any act for which such consent was required shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future, and no forbearance by a Party to seek a remedy for noncompliance or breach by another Party shall be construed as a waiver of any right or remedy with respect to such noncompliance or breach . (i) Effect of Headings . The titles and headings of this Agreement are for convenience and identification only and shall not limit, amplify or define the contents of the respective sections or paragraphs to which they pertain . (j) Materiality . Each term of this Agreement is contractual and not merely a recital. (k) Construction . This Agreement has been negotiated at arm’s length between persons (or their representatives) sophisticated and knowledgeable in the matters dealt with in this Agreement . Each of the Parties has cooperated in the drafting and preparation of this Agreement, and each of the Parties has been advised by his, her or its attorney of choice as to the appropriateness of entering into this Agreement . Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it, is not applicable and is hereby waived . The provisions of this Agreement shall be interpreted in a reasonable manner to effectuate the intentions of the Parties . (l) Controlling Law/Jurisdiction and Venue . The validity, construction and performance of this Agreement, and any dispute, claim or litigation arising out of or relating to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any conflict of laws principles that would result in the application of any laws other than those of the State of Delaware . (m) Authority to Execute . Each Party represents and warrants that each natural person who signs this Agreement on its behalf has full and complete power and authority to execute this Agreement on behalf of such Party and to bind said Party to this Agreement and that no further consents or approvals are required, other than as otherwise expressly contemplated hereunder . (n) Advice of Counsel ; Legal Fees . Each of the Parties acknowledges, represents and warrants that such Party has been represented by independent legal counsel of such Party’s own choice throughout all of the negotiations which preceded the execution of this Agreement and that such Party has executed this Agreement with the consent and on the advice of such independent legal counsel . Each of the Parties further acknowledges that such Party and its counsel have had adequate opportunity to make whatever investigation or inquiry such Party may deem necessary or desirable in connection with the subject matter of this Agreement prior to its execution and the delivery and acceptance of the consideration specified therein . The Parties agree that the Company shall reimburse the Lender and the Lead Investor for their legal fees and expenses in an amount of $ 5 , 000 , in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated hereunder, which amount shall be delivered at closing by wire or other electronic transfer to Lender and Lead Investor in accordance with written instructions provided by them to the Company .
LENDER By: Mike Komaransky Date: LEAD INVESTOR: KGPLA Holdings, LLC, a Delaware LLC By: Name: Mike Komaransky Title: Authorized Person Date: [SIGNTURE PAGE (continued)] DocuSign Envelope ID: 590063C0 - EB76 - 424A - AAE4 - 683007875434 12 - Jul - 2021 | 11:01:01 AM PDT Page 7 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 5
DocuSign Envelope ID: 590063C0 - EB76 - 424A - AAE4 - 683007875434 LENDER By: Mike Komaransky Date: LEAD INVESTOR: KGPLA Holdings, LLC, a Delaware LLC By: Name: Mike Komaransky Title: Authorized Person Date: 12 - Jul - 2021 | 11:01:01 AM PDT [SIGNTURE PAGE (continued)] Page 7 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 5
[SIGNTURE PAGE TO LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT] IN WITNESS WHEREOF, the Parties have executed and delivered or caused the executiona and delivery of this Agreement by their respective authorized officers as of the respective dates written below, to be effective as of the Effective Date . COMPANY: ATHENA BITCOIN GLOBAL, a Nevada corporation By: Name: Eric Gravengaard Title: CEO Date: SUBSIDIARY: ATHENA BITCOIN, INC., a Delaware corporation By: Name: Eric Gravengaard Title: CEO Date: KEY HOLDER: By: Eric Gravengaard Date: 12 - Jul - 2021 | 12:13:31 P M PDT DocuSign Envelope ID: F2F57A93 - 6083 - 465D - BBB7 - CF0D835F320C Page 6 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 5
DocuSign Envelope ID: F2F57A93 - 6083 - 465D - BBB7 - CF0D835F320C [SIGNTURE PAGE TO LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT] IN WITNESS WHEREOF, the Parties have executed and delivered or caused the executiona and delivery of this Agreement by their respective authorized officers as of the respective dates written below, to be effective as of the Effective Date . COMPANY: ATHENA BITCOIN GLOBAL, a Nevada corporation By: Name: Eric Gravengaard Title: CEO Date: 12 - Jul - 2021 | 12:13:31 PM PDT SUBSIDIARY: ATHENA BITCOIN, INC., a Delaware corporation By: Name: Eric Gravengaard Title: CEO Date: KEY HOLDER: By: Eric Gravengaard Date: Page 6 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 5
[SIGNTURE PAGE TO LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT] IN WITNESS WHEREOF, the Parties have executed and delivered or caused the executiona and delivery of this Agreement by their respective authorized officers as of the respective dates written below, to be effective as of the Effective Date . COMPANY: ATHENA BITCOIN GLOBAL, a Nevada corporation By: Name: Eric Gravengaard Title: CEO Date: SUBSIDIARY: ATHENA BITCOIN, INC., a Delaware corporation By: Name: Eric Gravengaard Title: CEO Date: KEY HOLDER: By: Eric Gravengaard Date: DocuSign Envelope ID: F2F57A93 - 6083 - 465D - BBB7 - CF0D835F320C 12 - Jul - 2021 | 12:13:31 PM PDT Page 6 of 10 LOAN RESTRUCTURING AND RELATED AMENDMENTS AGREEMENT 10660087 - 5
Exhibit 10.6
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) to that certain Loan Agreement dated August 22, 2018 (the “Loan Agreement”) is made and entered into as of the date last written below (the “Effective Date”), by and among Athena Bitcoin, Inc., a Delaware corporation (“Borrower”) and Michael Komaransky, an individual (“Lender”). Athena Bitcoin Global (f/k/a GamePlan, Inc.), a Nevada corporation (“Parent”), the parent company of Borrower, hereby joins this Amendment as a party added to the Loan Agreement by virtue hereof. Borrower, Lender and Parent are sometimes hereinafter referred to individually as a “Party” and, collectively, as the “Parties.” Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.
RECITALS
WHEREAS, as of immediately prior to the Effective Date and pursuant to Section 6.1 of the Loan Agreement, the Loan Agreement may be amended pursuant to a signed writing from the Lender, and the Parties desire to amend the Loan Agreement as set forth in this Amendment.
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and conditions set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows:
A. Preamble. The preamble to the Loan Agreement is amended and replaced in its entirety to read as follows:
“THIS LOAN AGREEMENT (this “Agreement”), dated as of August 22, 2018 (the “Effective Date”), as amended in accordance with its provisions, is entered into between Mike Komaransky, an individual (the “Lender”), on the one hand, and, on the other hand, Athena Bitcoin Global, a Nevada corporation (“Parent”) and its subsidiary Athena Bitcoin, Inc., a Delaware corporation (“Subsidiary”, together with Parent and each of their successors and assigns, the “Company”). The Lender and the Company are sometimes referred to herein collectively as the “Parties” and each individually as a “Party”. For clarification, the Parties intend that each of Parent and Company shall be jointly and severally liable as borrowers under this Agreement, the Note and that certain Security Agreement made and entered into concurrently with that certain First Amendment to this Agreement as dated therein, and that all references herein and therein to Company shall mean to include a reference to both Parent and Subsidiary.”
B. Section 1 (Definitions).
(i) The definition of “Loan Maturity Date” in Section 1.1 of the Loan Agreement is hereby amended and replaced in its entirety to read as follows: “Loan Maturity Date means May 31, 2022.”
(ii) The following definition is added to Section 1.1: “Security Agreement means that certain Security Agreement attached to this Agreement as Exhibit D to be entered into the by the Parties as of the same date as that certain First Amendment to Loan Agreement dated as therein.” The Parties agree that the form of Security Agreement attached to this Amendment as Appendix 1 shall be inserted into the Loan Agreement as and be Exhibit D to the Loan Agreement.
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C. Section 2 (The Loans).
(i) Section 2.3 of the Loan Agreement is hereby amended and replaced in its entirety to read as follows: “Mandatory Payment of the Loans”. The Company shall make weekly payments (due by 5:00 p.m. U.S. Central Time on Friday of each calendar week) in the amount equal to US$35,000, payable in bitcoin (and not in any other fiat- or crypto-currency) at the published exchange rate at 9:00 a.m. Central Time on such Friday), to be applied by the Lender toward the then unpaid principal balance of the Loan. The Company will repay all of the unpaid principal balance of the Loan and all interest and fees accrued and unpaid thereon on the Loan Maturity Date, unless accelerated pursuant to Section 2.5.
(ii) A new Section 2.6 of the Loan Agreement is hereby added to read as follows:
“Grant of Security Interest. To secure the prompt payment of the Company’s obligations and the prompt, full and faithful performance by the Company of all of the provisions to be kept, observed or performed by the Company under this Loan Agreement, the Note and/or the other documents, the Company does hereby GRANT, ASSIGN AND TRANSFER to the Lender a first priority security interest in and to, and a lien on, all property, wherever located, whether real or personal, now owned or existing or at any time hereafter arising or acquired by (or on behalf of) the Company or in which the Company now has, or at any time in the future may acquire, any right, title or interest (all of the foregoing, individually and collectively, the “Collateral”), including without limitation the property set forth in Exhibit A to the Security Agreement, as may be applicable, except such Collateral shall exclude any and all property described as Collateral in that certain Security Agreement dated as of May 30, 2017, by and between Athena Bitcoin, Inc. and Consolidated Trading Futures, LLC (“CTF”) until the repayment by Athena Bitcoin of the outstanding debt and obligations to CTF under the CTF Security Agreement.”
(iii) A new Section 2.7 of the Loan Agreement is hereby added to read as follows:
“Conversion of the Note. At the first time and on the first date after June 30, 2021 that the published exchange rate of bitcoin for US dollars is equal to or exceeds a ratio of 1 bitcoin:US$75,000 (the “Conversion Ratio Trigger”), the outstanding principal amount of the Note due and owing to the Lender at such time, including accrued interest, if any, shall be automatically converted to US dollars calculated at the applicable Conversion Trigger Ratio (an “Exchange-based Conversion Event”). Upon an Exchange-based Conversion Event, and within five (5) days thereof, Company shall issue in the favor of the Lender a replacement (secured) promissory note reflecting the outstanding principal and interest amount due as of the date of the Exchange-based Conversion Event and containing substantially similar terms as the Note with no material modification thereto, and upon receipt thereof from Company, the Lender shall immediately acknowledge in writing the cancellation of the Note and surrender any original copies thereof in its possession (the “Note Exchange”). The Parties agree that any Note Exchange which occurs pursuant to this Section 2.7 shall be self-executing and shall not require any further amendments to this Agreement or the Security Agreement, and that the Lender shall thereafter be entitled to amend any filings made by it to continue to perfect its security interests in Company’s collateral as pledged under the Security Agreement, as required by applicable law.”
2. Reaffirmation. Company (a) affirms all of its obligations under the Loan Agreement and (b) agrees that this Amendment and all documents, agreements and instruments executed in connection herewith do not operate to reduce or discharge the Company’s obligations thereunder.
3. No Other Amendment; Recitals. Except as modified by this Amendment, the Loan Agreement shall remain in full force and effect in all respects without any modification. This Amendment shall be effective as to the Loan Agreement as of the Effective Date. The preamble and recitals hereof are fully incorporated into this Amendment.
4. Governing Law. This Amendment shall be governed by and construed under the laws of the State of Illinois, without regard conflict of laws principles that would result in the application of any law other than those of the State of Illinois.
5. Counterparts. This Amendment may be signed in two or more counterparts, each of which shall be an original, and all of which shall be deemed one instrument, and counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
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[SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AGREEMENT]
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Effective Date.
| COMPANY | |||
| PARENT | |||
| ATHENA BITCOIN GLOBAL | |||
| By: /s/ Eric Gravengaard | |||
| Name: Eric Gravengaard | |||
| Title: CEO | |||
| Date: 12-Jul-2021 | |||
| BORROWER | |||
| ATHENA BITCOIN GLOBAL | |||
| By: /s/ Eric Gravengaard | |||
| Name: Eric Gravengaard | |||
| Title: CEO | |||
| Date: 12-Jul-2021 | |||
| LENDER | |||
| By: /s/ Mike Komaransky | |||
| Name: Mike Komaransky | |||
| Date: 12-Jul-2021 | |||
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Exhibit 10.7
FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) to that certain Securities Purchase Agreement dated January 31, 2020 (the “Purchase Agreement”) is made and entered into as of the date last written below (the “Effective Date”), by and among Athena Bitcoin Global (f/k/a GamePlan, Inc.), a Nevada corporation (“Company”), and KGPLA Holdings, LLC, a Delaware limited liability company (“Lead Investor”) on behalf of itself and other investors (collectively, the “Investors”). Company and the Investors are sometimes hereinafter referred to individually as a “Party” and, collectively, as the “Parties.” Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.
RECITALS
WHEREAS, as of immediately prior to the Effective Date and pursuant to Section 9.10(a) of the Purchase Agreement, the Parties may amend the Purchase Agreement in a signed writing Investors holding at least a majority of the aggregate principal amount of all Convertible Debentures (which is held by Lead Investor), plus the affirmative written consent of Lead Investor, and the Parties desire to enter into this Amendment to amend certain terms of the Purchase Agreement, subject to Section 9.10(b).
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and conditions set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. Amendments to Purchase Agreement. The Purchase Agreement is hereby amended as follows:
A. Definitions in the Purchase Agreement. The following definitions as set forth in Article I (Definitions) of the Purchase Agreement are amended and replaced in their entirety to read as follows:
“Conversion Price” means $0.012 per share of the Issuer’s Common Stock, or the price calculated as follows, whichever results in the lower price:
| (i) | with respect to a conversion pursuant to Section 2.01(c)(i)(1) (i.e., a Next Equity Financing conversion), the lesser of: (A) the product of (x) 100% less the Discount and (y) the lowest per share purchase price of the Equity Securities issued in the Next Equity Financing; and (B) the quotient resulting from dividing (x) the Valuation Cap by (y) the Fully Diluted Capitalization immediately prior to the closing of the Next Equity Financing; |
| (ii) | with respect to a conversion pursuant to Section 2.01(c)(i)(2) (i.e., an IPO conversion), the lesser of: (A) the product of (x) 100% less the Discount and (y) the lowest per share purchase price of the Equity Securities issued as part of the IPO; and (B) ninety percent (90%) of the quotient resulting from dividing (x) the Valuation Cap by (y) the Fully Diluted Capitalization immediately prior to the closing date of the Next Equity Financing; |
| (iii) | with respect to a conversion pursuant to Section 2.01(c)(i)(3) (i.e., a Corporate Transaction conversion), if a conversion is elected by Investor, the quotient resulting from dividing (x) the Valuation Cap by (y) the Fully Diluted Capitalization immediately prior to the closing date of the Next Equity Financing; |
| (iv) | with respect to a conversion pursuant to Section 2.01(c)(ii)(1) (i.e., an optional Maturity Date conversion) or Section 2.01(c)(ii)(2) (i.e., an optional conversion at any time), the quotient resulting from dividing (x) the Valuation Cap by (y) the Fully Diluted Capitalization immediately prior to the closing date of the Next Equity Financing. |
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“Fully Diluted Capitalization” means the number of issued and outstanding shares of the Issuer’s capital stock immediately prior to the closing date of the Issuer’s Next Equity Financing, assuming: (i) the conversion or exercise of all of the Issuer’s outstanding convertible or exercisable securities, including shares of convertible preferred stock and all outstanding vested or unvested options or warrants to purchase the Issuer’s capital stock; and (ii) the issuance of all shares of the Issuer’s capital stock reserved and available for future issuance under any of the Issuer’s existing equity incentive plans or any equity incentive plan created or expanded in connection with the Next Equity Financing. Notwithstanding the foregoing, "Fully Diluted Capitalization" excludes: (y) (1) any convertible promissory notes, debentures or bonds issued by the Issuer and/or the Company, separately or combined together in one or more transactions, with an aggregate face value of $500,000.00 or less, and (2) the Convertible Debentures contemplated to be sold by the Issuer under this Agreement; and (z) any SAFEs or SAFTs issued by the Issuer, separately or combined together in one or more transactions, with an aggregate face value of $500,000.00 or less.
“Next Equity Financing” means the next sale (or series of related sales on substantially the same terms) by the Issuer of additional Equity Securities following the Agreement Date 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 US$3,000,000.00 (excluding, for the avoidance of doubt, the aggregate principal amount of the Convertible Debentures); provided that, for clarification, this is not meant to include any actions or listing for trading on the OTC Markets.
B. Mandatory Conversion. The first sentence of Section 2(c)(i)(1) (Mandatory Conversion upon Next Equity Financing) of the Purchase Agreement is amended and replaced in its entirety to read as follows: “The principal balance and any unpaid accrued interest (if such interest is not paid in full by the Issuer concurrently with the conversion) on each Convertible Debenture of each Investor shall be converted into Conversion Securities upon the closing of the Next Equity Financing upon; provided, however, that no such Mandatory Conversion shall apply to the Lead Investor automatically and shall only apply to the Lead Investor upon its express written consent thereto upon receiving notice of such option from the Issuer at least five (5) days prior to the closing of the Next Equity Financing as contemplated hereunder.”
C. Prepayment of Convertible Debenture(s). Section 2.01(c)(v) is hereby amended and replaced in its entirety to read as follows: “(v) Prepayment of Convertible Debenture(s). The principal amount of Convertible Debenture(s) and any accrued and unpaid interest thereon, may be prepaid by the Issuer at any time without any penalty.”
2. Reaffirmation. Company (a) affirms all of its obligations under the Purchase Agreement and all Convertible Debentures issued thereunder and (b) agrees that this Amendment and all documents, agreements and instruments executed in connection herewith do not operate to reduce or discharge the Company’s obligations thereunder.
3. No Other Amendment; Recitals. Except as modified by this Amendment, the Purchase Agreement shall remain in full force and effect in all respects without any modification. This Amendment shall be effective as to the Purchase Agreement as of the Effective Date. The preamble and recitals hereof are fully incorporated into this Amendment.
4. Governing Law. This Amendment shall be governed by and construed under the laws of the State of Delaware, without regard conflict of laws principles that would result in the application of any law other than those of the State of Delaware.
5. Counterparts. This Amendment may be signed in two or more counterparts, each of which shall be an original, and all of which shall be deemed one instrument, and counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
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[SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Effective Date.
| COMPANY | ||
| ATHENA BITCOIN GLOBAL | ||
| By: /s/ Eric Gravengaard | ||
| Name: Eric Gravengaard | ||
| Title: CEO | ||
| Date: 12-Jul-2021 | ||
| LEAD INVESTOR | ||
| KGPLA HOLDINGS, LLC | ||
| By: /s/ Mike Komaransky | ||
| Name: Mike Komaransky | ||
| Title: Authorized Person | ||
| Date: 12-Jul-2021 |
| 3 |
Exhibit 10.8
EXHIBIT D
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of the date last written below (the “Effective Date”) (as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”), is made by and among, on the one hand, Athena Bitcoin, Inc., a Delaware corporation (“Borrower”) and Athena Bitcoin Global (f/k/a GamePlan, Inc.), a Nevada corporation (“Parent”, and together with Borrower, “Grantor”), and on the other hand, Michael Komaransky, an individual (“Lender”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in that certain Loan Agreement dated as of August 22, 2018, as amended and in effect in accordance with its terms (the “Loan Agreement”).
RECITALS
WHEREAS, the Secured Party made a loan to Borrower in the amount of 30 bitcoin, a substantial portion of which remains outstanding as of immediately prior to the Effective Date, and which has matured and is due to the Secured Party pursuant to the express terms of the Loan Agreement;
WHEREAS, as of the Effective Date and pursuant to that certain First Amendment to Loan Agreement dated concurrently herewith (the “First Amendment”), and as a requirement thereunder, Parent joined the Loan Agreement to be jointly and severally liable with Borrower under the Loan Agreement and the Note, in exchange for the Secured Party agreeing to certain amendments to the Loan Agreement including the extension of the Loan Maturity Date, and including the Parties’ agreement that the Note shall be secured by a pledge of assets by Grantor as more particularly set forth in the First Amendment;
WHEREAS, this Agreement is given by the Grantor in favor of the Secured Party to secure the payment and performance of all of the Secured Obligations; and
WHEREAS, it is a condition to the obligations of the Lender to agree to the First Amendment that the Grantor execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
| 1. | Definitions. |
(a) Unless otherwise specified herein, all references to Sections, Exhibits and Schedules herein are to Sections, Exhibits and Schedules of this Agreement.
(b) Unless otherwise defined herein, terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9.
(c) For purposes of this Agreement, the following capitalized terms not otherwise defined herein shall have the following meanings:
“Collateral” has the meaning set forth in Section 2.
“Event of Default” means any breach by Grantor or Grantor’s default in respect of any provision of the Loan Agreement, the Note or this Agreement, or Grantor’s breach or default of any other provision of any loan agreement or debt instrument to which Grantor is a party.
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“First Priority” means, with respect to any lien and security interest purported to be created in any Collateral pursuant to this Agreement, such lien and security interest is the most senior lien to which such Collateral is subject (subject only to liens permitted under the Loan Agreement).
“Proceeds” means “proceeds” as such term is defined in section 9-102 of the UCC and, in any event, shall include, without limitation, all dividends or other income from the Collateral, collections thereon or distributions with respect thereto.
“Secured Obligations” has the meaning set forth in Section 3.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of Delaware or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code as in effect from time to time in such state.
| 2. | Grant of Security Interest. For value received, each of Parent and Borrower, as Grantor, hereby pledges and grants to the Secured Party, and hereby creates a continuing First Priority lien and security interest in favor of the Secured Party in and to all of each of Parent’s and Borrower’s (as Grantor) right, title and interest in and to the following assets of the Grantor (the “Collateral”): |
(a) all fixtures and personal property of every kind and nature including all accounts (including health-care-insurance receivables), goods (including inventory and equipment), documents (including, if applicable, electronic documents), instruments, promissory notes, chattel paper (whether tangible or electronic), letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), securities and all other investment property, general intangibles (including all payment intangibles), intellectual property rights, money, deposit accounts, and any other contract rights or rights to the payment of money, including any commercial tort claims; and
(b) all Proceeds and products of each of the foregoing, all books and records relating to the foregoing, all supporting obligations related thereto, and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to the Grantor from time to time with respect to any of the foregoing.
The Grantor hereby covenants and agrees that it shall not sell, transfer or otherwise dispose of, or permit any security interest, lien or other encumbrance to exist with respect to, any of the Collateral (other than the security interest of Lender contemplated hereby).
Notwithstanding anything to the contrary herein, the Collateral shall not include the following property of Borrower: any property described as “Collateral” (the “CTF Collateral”) in that certain Security Agreement dated as of May 30, 2017, by and between Borrower and Consolidated Trading Futures, LLC (“CTF”) for as long as any amounts are outstanding by Borrower to CTF thereunder, provided that at such time of full repayment to CTF thereunder, and if any principal amount, interest or fees remain due and outstanding by Grantor under the Note to the Secured Party, then the CTF Collateral shall automatically and immediately be included with the Collateral as if fully described hereunder with no further need to amend or modify this Agreement, and the Secured Party shall thereupon be entitled to take all actions necessary to perfect its secured interest in CTF Collateral as it becomes part of the Collateral, under this Agreement and applicable law.
| 3. | Secured Obligations. The Collateral secures the due and prompt payment and performance of: |
(a) the obligations of the Grantor from time to time arising under the Loan Agreement, this Agreement or otherwise with respect to the due and prompt payment of (i) the principal of and premium, if any, and interest on the Loans (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements, reimbursement obligations, contract causes of action, expenses and indemnities, whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Grantor under or in respect of the Loan Agreement and this Agreement; and
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(b) all other covenants, duties, debts, obligations and liabilities of any kind of the Grantor under or in respect of the Loan Agreement, this Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether evidenced by a note or other writing, whether allowed in any bankruptcy, insolvency, receivership or other similar proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, fixed or otherwise (all such obligations, covenants, duties, debts, liabilities, sums and expenses set forth in Section 3 being herein collectively called the “Secured Obligations”).
| 4. | Perfection of Security Interest and Further Assurances. |
(a) The Grantor shall, from time to time, as may be required by the Secured Party with respect to all Collateral, immediately take all actions as may be requested by the Secured Party to perfect the security interest of the Secured Party in the Collateral, including, without limitation, with respect to all Collateral over which control may be obtained within the meaning of sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC, section 201 of the federal Electronic Signatures in Global and National Commerce Act and, as the case may be, section 16 of the Uniform Electronic Transactions Act, as applicable, the Grantor shall immediately take all actions as may be requested from time to time by the Secured Party so that control of such Collateral is obtained and at all times held by the Secured Party. All of the foregoing shall be at the sole cost and expense of the Grantor.
(b) The Grantor hereby irrevocably authorizes the Secured Party at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Grantor hereunder, without the signature of the Grantor where permitted by law, including the filing of a financing statement describing the Collateral as all assets now owned or hereafter acquired by the Grantor, or words of similar effect. The Grantor agrees to provide all information required by the Secured Party pursuant to this Section promptly to the Secured Party upon request.
(c) The Grantor agrees that at any time and from time to time, at the expense of the Grantor, the Grantor will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Secured Party may request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any Collateral.
| 5. | Representations and Warranties. The Grantor represents and warrants as follows: |
(a) All information set forth in the Purchase Agreements in respect of the Collateral is accurate and complete and there has been no change in any such information since the aforesaid date.
(b) The Collateral consisting of securities have been duly authorized and validly issued and are fully paid and non-assessable and subject to no options to purchase or similar rights. The Grantor holds no commercial tort claims.
(c) At the time the Collateral becomes subject to the lien and security interest created by this Agreement, the Grantor will be the sole, direct, legal and beneficial owner thereof, free and clear of any lien, security interest, encumbrance, claim, option or right of others except for the security interest created by this Agreement and other liens permitted by the Loan Agreement.
(d) The pledge of the Collateral pursuant to this Agreement creates a valid and perfected First Priority security interest in the Collateral, securing the payment and performance when due of the Secured Obligations.
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(e) It has full power, authority and legal right to borrow the Loans and pledge the Collateral pursuant to this Agreement.
(f) Each of this Agreement and the Loan Agreement has been duly authorized, executed and delivered by the Grantor and constitutes a legal, valid and binding obligation of the Grantor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to equitable principles (regardless of whether enforcement is sought in equity or at law).
(g) No authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the borrowing of the Loans and the pledge by the Grantor of the Collateral pursuant to this Agreement or for the execution and delivery of the Loan Agreement and this Agreement by the Grantor or the performance by the Grantor of its obligations thereunder.
(h) The execution and delivery of the Loan Agreement and this Agreement by the Grantor and the performance by the Grantor of its obligations thereunder, will not violate any provision of any applicable law or regulation or any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to the Grantor or any of its property, or the organizational or governing documents of the Grantor or any agreement or instrument to which the Grantor is party or by which it or its property is bound.
(i) The Grantor has taken all action required on its part for control (as defined in sections 8-106, 9-104, 9-105, 9-106 and 9-107 of the UCC, section 201 of the federal Electronic Signatures in Global and National Commerce Act and, as the case may be, section 16 of the Uniform Electronic Transactions Act, as applicable) to have been obtained by the Secured Party over all Collateral with respect to which such control may be obtained pursuant to the UCC. No person other than the Secured Party has control or possession of all or any part of the Collateral.
| 6. | Voting, Distributions and Receivables. |
(a) The Secured Party agrees that the Grantor may, unless an Event of Default shall have occurred and be continuing, receive and retain all cash payments and other payments or distributions with respect to the Collateral consisting of securities, other Equity Interests or indebtedness owed by any obligor.
(b) If any Event of Default shall have occurred and be continuing, the Secured Party may, or at the request and option of the Secured Party the Grantor shall, notify account debtors and other persons obligated on any of the Collateral of the security interest of the Secured Party in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to the Secured Party.
| 7. | Covenants. The Grantor covenants as follows: |
(a) The Grantor will not, without providing at least thirty (30) days’ prior written notice to the Secured Party, organize any entity for purposes of conducting its business and transfer or license any business assets to any such entity for such purposes. The Grantor will, prior to any change described in the preceding sentence, take all actions requested by the Secured Party to maintain the perfection and priority of the Secured Party’s security interest in the Collateral.
(b) The Collateral, to the extent not delivered to the Secured Party pursuant to Section 4, will be kept by the Grantor at his principle place of business and the Grantor will not remove the Collateral from such locations without providing at least thirty (30) days’ prior written notice to the Secured Party. The Grantor will, prior to any change described in the preceding sentence, take all actions required by the Secured Party to maintain the perfection and priority of the Secured Party’s security interest in the Collateral.
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(c) The Grantor shall, at his own cost and expense, defend title to the Collateral and the First Priority lien and security interest of the Secured Party therein against the claim of any person claiming against or through the Grantor and shall maintain and preserve such perfected First Priority security interest for so long as this Agreement shall remain in effect.
(d) The Grantor will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option with respect to, restrict, or grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest, option, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever on, any of the Collateral or any interest therein except as expressly provided for in the Loan Agreement.
(e) The Grantor will keep the Collateral in good order and repair and will not use the same in violation of law or any policy of insurance thereon. The Grantor will permit the Secured Party, or his designee, to inspect the Collateral at any reasonable time, wherever located.
(f) The Grantor will pay promptly when due all taxes, assessments, governmental charges, and levies upon the Collateral or incurred in connection with the use or operation of the Collateral or incurred in connection with this Agreement.
(g) The Grantor will continue to operate his business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, including any applicable state law versions thereof, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances.
| 8. | Secured Party Appointed Attorney-in-Fact. The Grantor hereby appoints the Secured Party the Grantor’s attorney-in-fact, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time during the continuance of an Event of Default in the Secured Party’s discretion to take any action and to execute any instrument which the Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement (but the Secured Party shall not be obligated to and shall have no liability to the Grantor or any third party for failure to do so or take action). This appointment, being coupled with an interest, shall be irrevocable. The Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. |
| 9. | Secured Party May Perform. If the Grantor fails to perform any obligation contained in this Agreement, the Secured Party may itself perform, or cause performance of, such obligation, and the expenses of the Secured Party incurred in connection therewith shall be payable by the Grantor; provided that the Secured Party shall not be required to perform or discharge any obligation of the Grantor. |
| 10. | Reasonable Care. The Secured Party shall have no duty with respect to the care and preservation of the Collateral beyond the exercise of reasonable care. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Secured Party accords its own property, it being understood that the Secured Party shall not have any responsibility for (a) ascertaining or taking action with respect to any claims, the nature or sufficiency of any payment or performance by any party under or pursuant to any agreement relating to the Collateral or other matters relative to any Collateral, whether or not the Secured Party has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral. Nothing set forth in this Agreement, nor the exercise by the Secured Party of any of the rights and remedies hereunder, shall relieve the Grantor from the performance of any obligation on the Grantor’s part to be performed or observed in respect of any of the Collateral. |
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| 11. | Remedies Upon Default. |
(a) If any Event of Default shall have occurred and be continuing, the Secured Party, without any other notice to or demand upon the Grantor, may assert all rights and remedies of a secured party under the UCC or other applicable law, including, without limitation, the right to take possession of, hold, collect, sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or any portion of the Collateral.
(b) If notice prior to disposition of the Collateral or any portion thereof is necessary under applicable law, written notice mailed to the Grantor at its notice address as provided in Section 15 hereof ten (10) days prior to the date of such disposition shall constitute reasonable notice, but notice given in any other reasonable manner shall be sufficient. So long as the sale of the Collateral is made in a commercially reasonable manner, the Secured Party may sell such Collateral on such terms and to such purchaser(s) as the Secured Party in its absolute discretion may choose, without assuming any credit risk and without any obligation to advertise or give notice of any kind other than that necessary under applicable law. Without precluding any other methods of sale, the sale of the Collateral or any portion thereof shall have been made in a commercially reasonable manner if conducted in conformity with reasonable commercial practices of creditors disposing of similar property. At any sale of the Collateral, if permitted by applicable law, the Secured Party may be the purchaser, licensee, assignee or recipient of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale. To the extent permitted by applicable law, the Grantor waives all claims, damages and demands it may acquire against the Secured Party arising out of the exercise by it of any rights hereunder. The Grantor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Secured Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Secured Party or any custodian may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Secured Party nor any custodian shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing, nor shall it be under any obligation to take any action whatsoever with regard thereto. The Grantor agrees that it would not be commercially unreasonable for the Secured Party to dispose of the Collateral or any portion thereof by utilizing internet sites that provide for the auction of assets of the type included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. The Secured Party shall not be obligated to clean-up or otherwise prepare the Collateral for sale.
(c) If any Event of Default shall have occurred and be continuing, all rights of the Grantor to (i) exercise the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 6.a) and (ii) receive the cash payments and other payments or distributions which it would otherwise be entitled to receive and retain pursuant to Section 6.b), shall immediately cease, and all such rights shall thereupon become vested in the Secured Party, which shall have the sole right to exercise such voting and other consensual rights and receive and hold such payments and other distributions as Collateral.
(d) If any Event of Default shall have occurred and be continuing, any cash held by the Secured Party as Collateral and all cash Proceeds received by the Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in whole or in part by the Secured Party to the payment of expenses incurred by the Secured Party in connection with the foregoing or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Party hereunder, including reasonable attorneys’ fees, and the balance of such proceeds shall be applied or set off against all or any part of the Secured Obligations in such order as the Secured Party shall elect. Any surplus of such cash or cash Proceeds held by the Secured Party and remaining after payment in full of all the Secured Obligations shall be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus. The Grantor shall remain liable for any deficiency if such cash and the cash Proceeds of any sale or other realization of the Collateral are insufficient to pay the Secured Obligations and the fees and other charges of any attorneys employed by the Secured Party to collect such deficiency.
(e) If the Secured Party shall determine to exercise its rights to sell all or any of the Collateral pursuant to this Section, the Grantor agrees that, upon request of the Secured Party, the Grantor will, at its own expense, do or cause to be done all such acts and things as may be necessary to make such sale of the Collateral or any part thereof valid and binding and in compliance with applicable law.
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| 12. | No Waiver and Cumulative Remedies. The Secured Party shall not by any act (except by a written instrument pursuant to Section 14), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law. |
| 13. | Security Interest Absolute. The Grantor hereby waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. All rights of the Secured Party and liens and security interests hereunder, and all Secured Obligations of the Grantor hereunder, shall be absolute and unconditional irrespective of: |
(a) any illegality or lack of validity or enforceability of any Secured Obligation or any related agreement or instrument;
(b) any change in the time, place or manner of payment of, or in any other term of, the Secured Obligations, or any rescission, waiver, amendment or other modification of the Loan Agreement, this Agreement or any other agreement, including any increase in the Secured Obligations resulting from any extension of additional credit or otherwise;
(c) any taking, exchange, substitution, release, impairment or non-perfection of any Collateral or any other collateral, or any taking, release, impairment, amendment, waiver or other modification of any guaranty, for all or any of the Secured Obligations;
(d) any manner of sale, disposition or application of proceeds of any Collateral or any other collateral or other assets to all or part of the Secured Obligations;
(e) any default, failure or delay, willful or otherwise, in the performance of the Secured Obligations;
(f) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by, the Grantor against the Secured Party; or
(g) any other circumstance (including, without limitation, any statute of limitations) or manner of administering the Loans or any existence of or reliance on any representation by the Secured Party that might vary the risk of the Grantor or otherwise operate as a defense available to, or a legal or equitable discharge of, the Grantor or any other grantor, guarantor or surety.
| 14. | Amendments. None of the terms or provisions of this Agreement may be amended, modified, supplemented, terminated or waived, and no consent to any departure by the Grantor therefrom shall be effective unless the same shall be in writing and signed by the Secured Party and the Grantor, and then such amendment, modification, supplement, waiver or consent shall be effective only in the specific instance and for the specific purpose for which made or given. |
| 15. | Notices. All notices and other communications provided for in this Agreement shall be in writing and shall be given in the manner and become effective as set forth in the Loan Agreement, and addressed to the respective parties at their addresses as specified on the signature pages hereof or as to either party at such other address as shall be designated by such party in a written notice to each other party. |
| 16. | Continuing Security Interest; Further Actions. This Agreement shall create a continuing First Priority lien and security interest in the Collateral and shall (a) subject to Section 17, remain in full force and effect until payment and performance in full of the Secured Obligations, (b) be binding upon the Grantor, its successors and assigns, and (c) inure to the benefit of the Secured Party and its successors, transferees and assigns; provided that the Grantor may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Secured Party. Without limiting the generality of the foregoing clause (c), any assignee of the Secured Party’s interest in any agreement or document which includes all or any of the Secured Obligations shall, upon assignment, become vested with all the benefits granted to the Secured Party herein with respect to such Secured Obligations. |
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| 17. | Term; Termination; Release. This Agreement shall remain in full force and effect until the Obligations have been satisfied and paid in full, Lender has no further obligations to make loans under the Loan Agreement or any related document, and all conditions for the release of Lender’s liens on and security interests in the assets of the Borrower set forth in the Loan Agreement shall have been satisfied. At the expiration of the term of this Agreement, Lender shall return to the Grantor all membership interest certificates and membership interest transfer powers relating to the Pledged Units (to the extent the same have been received by Lender). On the date on which all Secured Obligations have been paid and performed in full, the Secured Party will, at the request and sole expense of the Grantor, (a) duly assign, transfer and deliver to or at the direction of the Grantor (without recourse and without any representation or warranty) such of the Collateral as may then remain in the possession of the Secured Party, together with any monies at the time held by the Secured Party hereunder, and (b) execute and deliver to the Grantor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement. |
| 18. | Governing Law. This Agreement and the Loan Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or the Loan Agreement (except, as to the Loan Agreement, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the State of Illinois. |
| 19. | Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. |
[Signature Page Follows]
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[Signature Page to Security Agreement]
IN WITNESS HEREOF, the Parties hereto have executed this Agreement as of the date first written above.
| GRANTOR | ||
| PARENT | ||
| ATHENA BITCOIN GLOBAL | ||
| By: /s/ Eric Gravengaard | ||
| Name: Eric Gravengaard | ||
| Title: CEO | ||
| Date: _______________________________ | ||
| BORROWER | ||
| ATHENA BITCOIN GLOBAL | ||
| By: /s/ Eric Gravengaard | ||
| Name: Eric Gravengaard | ||
| Title: CEO | ||
| Date: _______________________________ | ||
| SECURED PARTY | ||
| By: /s/ Mike Komaransky | ||
| Name: Mike Komaransky | ||
| Date: __________________________________ | ||
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Exhibit 10.14
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED WITH THREE ASTERISKS [***]
GENESIS COIN INC. PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is entered into this 1st day of October, 2015, by and between Athena Bitcoin, Inc. (hereinafter "Buyer"), with business offices located at 440 S La Salle St Ste 2101, Chicago IL 60605 and Genesis Coin, Inc. (hereinafter "Company"), a Delaware corporation.
RECITALS:
WHEREAS, Company is in the business of selling kiosk equipment and software; and
WHEREAS, Buyer desires to purchase such equipment.
NOW, THEREFORE, in consideration of the mutual agreements and covenants contained therein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it is mutually agreed and covenanted by and between the parties to this Agreement as follows:
1. Sale of Equipment. Company hereby sells to Buyer and Buyer hereby purchases from Company the equipment described on Exhibit A attached hereto and incorporated herein, and licenses the software contained therein (hereinafter "Equipment").
2A. Purchase Price. Buyer shall pay to Company for the Equipment and for all obligations specified herein, as full and complete consideration therefore, the sum of [***] dollars ($[***]) (hereinafter "Purchase Price"). Discount pricing is provided as outlined below for this initial order only.
| A. | The Purchase Price is allocated as follows: | ||
| (2x) Genesis1 Kiosk (1 Cash Dispenser) | $[***] ea (2x) | ||
| Genesis1 Discount | $[***] ea (10x) | ||
| Shipping & Delivery | INCLUDED TO USA | ||
| Total: | $[***] |
3. Payment. Payment of the Purchase Price shall be made by Buyer to Company in full within 7 days from the execution date of this Agreement. Company shall have no obligations under this Agreement prior to full payment by Buyer. If payment is not received within 7 days upon execution of this Agreement, Agreement will be terminated and rendered null and void. Buyer understands that all sales are final and no refunds will be provided on any payments made.
4. Taxes. Buyer represents that it shall be responsible for any sales, use, property, gross receipts, VAT, income or similar taxes levied against any party to this Agreement arising out of the operation of the Equipment, excluding the license fee paid to the Company for which the Company shall bear all VAT, income or similar taxes.
5. Delivery. Delivery of the Equipment to Buyer by Company, at Buyer's sole cost and expense, shall be made within 45 days after execution of this Agreement and full payment (hereinafter "Delivery Date"). The Equipment shall be packaged appropriately and shall be clearly labeled. Buyer will be responsible for any additional import taxes or duties required to deliver the Equipment beyond the amount invoiced. Company will notify and invoice Buyer for any additional import taxes or duties paid for by Company to deliver the Equipment. Delivery of the Equipment in an undamaged condition to Buyer's Installation Site shall constitute "Delivery" to Buyer. Risk of loss during transit shall remain with Company.
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6. Setup and Installation. Buyer shall comply with all permits and licenses required by Federal, State, or local authorities in connection with the delivery and installation of the Equipment.
7. Software. Company hereby grants to Buyer a LIMITED, NONEXCLUSIVE LICENSE and/or SUBLICENSE (hereinafter “License”) to use the software identified in Exhibit A hereof (hereinafter “Software”) in connection with the sale of Equipment.
A. License Fee. In addition to the amount described in Section 2, Buyer shall pay to Company or nominee a software license fee of one percent (1%) of the value of all transactions processed by Buyer. Such fees shall be assessed in Bitcoin, deducted automatically and transferred automatically to Company or nominee. Absent automatic deduction and transfer of licensing fees, Buyer shall take all reasonable steps to effectuate the collection of this licensing fee. Buyer shall provide, upon reasonable written request, accounting records to Company reflecting transaction volume.
B. Transferability. Company’s software licenses are nontransferable. In the event that the Buyer sells the Equipment to another Party, the Party will be required to sign a new license agreement whose terms and fees are separate from this agreement.
C. Updates. Standard software updates provided by Company to the core Kiosk plat- form remain free for life. Any custom software development requested by Buyer and agreed to by Company will be assessed a fee of $[***] per hour. Any custom software developed on behalf of Buyer for usage with the Kiosk will remain the property of Company.
D. Term. This License shall commence upon delivery of the Equipment to the Buyer and shall continue for as long as Buyer retains full legal right and title to operate the Equipment.
E. Support. In any calendar month that Buyer has paid Company a software license fee, Company shall provide Buyer software support services via Skype chat or email.
F. Service Level Agreement. Company strives to provide reliable 99.9% uptime of all cloud-based software services. In the event that Buyer should experience a net disruption in service in excess of 12 hours per given calendar year, Company will rebate Buyer $[***] per 12 hour period of disruption over the threshold.
8. Equipment Warranty. The warranty provided to Buyer by Company with respect to the Equipment is set forth in Exhibit B attached hereto and incorporated herein. The warranty period shall commence upon Delivery of the Equipment.
9. Compliance with Laws. Buyer represents and warrants that Buyer operates the Equipment in compliance with all applicable Federal, State, and local laws, rules, regulations, and ordinances, and represents that it shall have obtained all licenses and permits required by law to engage in the activities necessary to perform its obligations under this Agreement.
10. Defense and Indemnification.
A. Buyer shall defend, indemnify and hold Company its directors, officers, employees, and agents harmless from any loss, lawsuit, liability, damage, cost and expense (including reasonable attorneys' fees) which may arise out of or result from (i) any claim by third persons against Company arising out of Buyer’s operation of Equipment; or (ii) the acts or omissions of the Buyer, its agents or employees in connection with this Agreement; or (iii) any breach or default in the performance of the obligations of Buyer hereunder.
B. The invalidity, in whole or in part, of any of the foregoing paragraph will not affect the remainder of such paragraph.
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. THE REDACTED TERMS HAVE BEEN MARKED WITH THREE ASTERISKS [***]
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11. Default by Company. Upon the occurrence of any of the following events, and except as is otherwise provided for in this Agreement, Company shall be deemed to be in default under this Agreement if:
A. The scheduled Delivery Date shall be exceeded by more than thirty (30) days; or
B. Company fails or defaults in the performance of any material obligation or covenant under this Agreement and does not correct or substantially cure such failure, default, or breach within thirty (30) days from and after Company's receipt of written notice from Buyer of such default or breach; or
C. Any material representation or warranty made by Company hereunder is breached and remains uncured from and after thirty (30) days following Company's receipt of written notice from Buyer of such breach.
If any event of default occurs and is not cured within any applicable period specified above, Buyer, at its sole option, may employ any remedy then available to it, whether at law or in equity, except as limited in Section 13 of this Agreement, including, but not limited to, the following:
A. Proceed by appropriate legal action to enforce performance by Company of the applicable covenants and obligations of this Agreement and to recover damages for the breach thereof, and/or to enforce the Defense and Indemnification set forth in Section 10 hereof; or
B. Terminate this Agreement as to all or any part as Buyer in its sole discretion may determine; or
C. Pursue any other rights or remedies available to Buyer under the laws of the State of California, except as limited in Section 13 of this Agreement.
12. Default by Buyer. Default by Buyer in payment or performance of any material duty or obligation under this Agreement, shall, at the sole option of Company, if the default is not cured within thirty (30) days from and after Buyer's receipt of written notice from Company of the default, constitute a default of this Agreement. In such an event, Company, at its sole option, may employ any remedy then available to it, whether at law or in equity, except as limited in Section 13 of this Agreement, including, but not limited, to the following:
A. Withhold performance or further performance hereunder until all such defaults have been cured; or
B. Pursue any other rights and remedies available to Company under the laws of the State of California, except as limited in Section 13 of this Agreement.
13. Intellectual Property. Buyer understands that all software, data, and technical know- how including documentation, drivers, and code stored on the Kiosk’s hard drive and operating system remain the property of the Company. Any attempt to modify, decompile, duplicate, or otherwise change the software configuration or file system on the Kiosk without written consent from the Company constitutes a breach of contract. Should a violation occur, Company reserves the right to revoke the software license and or terminate the Agreement.
14. Arbitration. By initialing this Arbitration provision, Buyer and Company are agreeing to have any and all disputes that arise out of, or relate to this Agreement, decided only by binding arbitration. The arbitrator shall be a retired judge or justice who shall render an award in accordance with the substantive law of the State of California. In all other respects, the arbitration shall be conducted pursuant to the rules of JAMS in San Diego, California, and not by court action, except as provided by California law for judicial review of arbitration proceedings. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The parties hereto agree that this arbitration provision is self-executing and that a party shall not be required to obtain a court order compelling arbitration should the other party refuse to arbitrate. Pursuant to Code of Civil Procedure Section 1290.4, in any proceeding filed by either Buyer or Company to confirm an arbitration award rendered in any arbitration matter between Buyer and Company, a copy of the petition to confirm and written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served either by personal service at Buyer’s address shown in this Agreement or by United States Mail. Company and Buyer agree that period of notice on any such petition, written notice and any other papers upon which the petition is based shall be no more than ten (10) days from the date of personal service or fifteen (15) days from the date such documents are deposited in the United States Mail.
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In agreeing to this Arbitration provision, Company AND BUYER ARE SPECIFICALLY GIVING UP:
A. ALL RIGHTS COMPANY AND BUYER MAY POSSESS TO HAVE SUCH DISPUTES DECIDED IN A COURT OR JURY TRIAL; AND
B. ALL JUDICIAL RIGHTS, INCLUDING THE RIGHT TO APPEAL FROM THE DECISION OF THE ARBITRATOR OR ARBITRATORS.
IF EITHER COMPANY OR BUYER SHOULD REFUSE TO SUBMIT TO ARBITRATION, THE OTHER PARTY SHALL BE ENTITLED TO PROCEED WITH AN ARBITRATION AS PROVIDED IN THE ABOVE ARBITRATION PROVISION WITHOUT FIRST OBTAINING A COURT ORDER COMPELLING ARBITRATION. COMPANY AND BUYER ACKNOWLEDGE THE ABOVE AND FURTHER ACKNOWLEDGE THAT THIS MUTUAL AGREEMENT FOR BINDING ARBITRATION IS VOLUNTARY.
By initialing below, Buyer confirms that Buyer has read and understands this provision, and voluntarily agrees to binding arbitration. In doing so, Buyer voluntarily gives up important constitutional rights to trial by judge or jury, as well as rights to appeal. Buyer is advised that Buyer has the right to have independent counsel review this Arbitration provision and this entire Agreement prior to initialing this provision or signing the agreement.
| Initials /s/ EG | Company’s Initials /s/ ER |
15. Attorneys Fees. Should any litigation or arbitration be commenced between or among the parties hereto or their personal representatives concerning any of the provisions hereof or the rights or duties of any person or entity in relation hereto, the party or parties prevailing in such litigation or arbitration shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for his, her or their attorneys' fees and costs, which sum shall be deter- mined by the court in such litigation, arbitration or in a separate action brought for that purpose.
16. General.
A. Confidentiality. The parties shall hold in strictest confidence any information and material which is related to either Buyer's or Company's business or is designated by either Buy- er or Company as proprietary and confidential, herein or otherwise. It is understood that this confidentiality clause does not include information which: (i) is now or hereafter in the public domain through no fault of the party being provided the confidential information; (ii) prior to disclosure hereunder, is property within the rightful possession of the party being provided the confidential information; (iii) subsequent to disclosure hereunder, is lawfully received from a third party with no restriction on further disclosure; or (iv) is obligated to be produced under order of a court of competent jurisdiction, unless made the subject of a confidentiality agreement or protective order in connection with such proceeding, which the parties in all cases will attempt to obtain. Buyer and Company hereby covenant that each shall not disclose such information to any third party without prior written authorization of the other. Company further covenants not to disclose or otherwise make known to any party nor to issue or release for publication any articles or advertising or publicity matter relating to this Agreement in which the name of Buyer or any of its affiliates is mentioned or used, directly or indirectly, unless prior written consent is granted by Buyer.
B. Notices. All notices and other communications pertaining to this Agreement shall be in writing and shall be deemed duly to have been given if personally delivered to the other party or if sent by the United State Postal Service certified mail, return receipt requested, postage prepaid or by Federal Express, United Parcel or other nationally recognized overnight carrier. All notices or communications between Buyer and Company pertaining to this Agreement shall be addressed as follows:
| If to Buyer: | Athena Bitcoin, Inc. |
|
Attention: Eric Gravengaard | |
| 440 S La Salle St Ste 2101, | |
| Chicago IL 60605 |
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| With a copy to: | _____________ |
|
Attention: _____________ | |
| _____________ | |
| _____________ | |
| If to Company: | Genesis Coin, Inc. |
| Attention: Evan Rose | |
| 2269 Edinburg Ave. | |
| Cardiff, CA 92007 | |
| With a copy to: | Centara Legal Group, APC |
| Attention: David J. Gebhardt | |
| 4747 Executive Dr., Ste. 440 | |
| San Diego, CA 92121 |
Either party may change its notification address by giving written notice to that effect to the other party in the manner provided herein.
C. Waiver. Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall neither be considered a waiver nor deprive that party of any right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing and signed by the party to be charged therewith.
D. Modifications. No revision or modification of this Agreement shall be effective unless in writing and executed by authorized representative of both parties.
E. Assignment. The prior written approval of Company shall be required to allow a delegation or assignment of duty to perform any obligation owed to Company by Buyer, its agents, employees, contractors or affiliates.
F. Severability. If any portion of this Agreement is held invalid, such invalidity shall not affect the validity of the remaining portions of the Agreement, and the parties will substitute for any such invalid portion hereof a provision which best approximates the effect and intent of the invalid provision.
G. Construction and Jurisdiction. This Agreement shall be governed by the laws of the State of California (excepting any conflict of laws or provisions which would serve to defeat application of California substantive law). Each of the parties to this Agreement hereby irrevocably and unconditionally: (i) consents to submit to the exclusive jurisdiction of the courts of San Diego County, California for any proceeding arising in connection with this Agreement and each such party agrees not to commence any such proceeding except in such courts, and (ii) waives any objection to the laying of venue of any such proceeding in the courts of San Diego County, California. EACH PARTY, KNOWINGLY AND AFTER CONSULTATION WITH COUNSEL, FOR ITSELF, ITS SUCCESSSORS AND ASSIGNS, WAIVES ALL RIGHT TO TRIAL BY JURY OF ANY CLAIM ARISING WITH RESPECT TO THIS AGREEMENT OR ANY MATTER RELATED IN ANY WAY THERETO.
H. Headings. The paragraph titles of this Agreement are for conveniences only and shall not define or limit any of the provisions hereof.
I. Entire Agreement. This Agreement, the documents referenced herein and all Exhibits hereto (Exhibits A and B) are intended as the complete and exclusive statement of the agreement between Buyer and Company with respect to the subject matter hereof, and supersede all prior agreements and negotiations related thereto.
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J. Binding Effect. The provisions hereof shall be binding upon and shall inure to the benefit of Buyer and Company, their respective successors, and permitted assigns.
K. Survival. The representations and warranties contained in this Agreement shall survive termination of this Agreement.
L. Counterparts. Provided that all parties hereto execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Executed copies of this Agreement may be delivered by facsimile transmission or other comparable means. This Agreement shall be deemed fully executed and entered into on the date of execution by the last signatory required hereby.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have signed this agreement as of the day and year first written above, and the person executing this agreement on behalf of each party represents and warrants that this agreement has been authorized by all necessary parties, is validly executed by an authorized officer or agent, and is binding upon and enforceable against the company in accordance with its terms.
| WITNESS: | |
| By: /s/ Eric Gravengaard | |
| Name: Eric Gravengaard | |
| Title: President and CEO | |
| WITNESS: | Genesis Coin, Inc. |
| By: /s/ Evan Rose | |
| Name: Evan Rose | |
| Title: President and CEO | |
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EXHIBIT A
Description of Equipment
| QUANTITY | DESCRIPTION |
| 2 | Genesis1 Kiosk with one cash dispensing cassette |
| 1 | Software License and Access to Operating Backend |
In the event of any inconsistency between the terms in main body of the Agreement
and the terms in Exhibit A attached hereto, the terms in main body of the Agreement
will control.
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EXHIBIT B
MANUFACTURERS WARRANTY
Genmega, Inc. provides a limited one-year parts warranty for the G6000™ series kiosk.
Genmega guarantees your G6000™ model kiosk to be free from defects in materials and workmanship.
The one-year parts warranty begins 15 days from the original kiosk shipping date.
WHAT IS COVERED:
· Cash Dispensing Unit (CDU) and Cash Cassette
· Receipt printer (SHU)
· LCD module
· Magnetic Card Reader (MCR)
· EPP Keypad
· Power Supply
· Mainboard (CE)
· Lock and locking mechanism **LIMITED 90 DAY WARRANTY**
Dial and Electronic locks will be covered by a limited 90-day warranty beginning 15 days
from shipping date. Should the lock fail under normal use, Genmega will replace the lock only.
Services required to open the vault and or replace the lock are at the expense of the Machine owner.
WHAT IS NOT COVERED:
· Power cable and modem cable
· Key lock and key
· Plastic Bezels
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· Receipt printer jam
· Note jam
· Forgotten password or combination of lock
· Any damages from misuse, improper installation, and vandalism
· Any damages from “brown out” or low power, lightning, or any other ‘acts of God’
Once the manufacturers warranty has expired, all claims for warranty service must be resolved
directly between the distributor/dealer and the Machine owner.
OBTAINING SERVICE: If you have any problems or questions about your Genmega
Machine, your dealer or distributor is your primary contact for assistance/service.
Your manufacturer’s warranty is provided through your dealer or distributor.
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Exhibit 10.15
ORAL PURCHASE AND SALE AGREEMENT BETWEEN GENESIS COIN INC. AND ATHENA BITCOIN, INC.
Reference is made to that certain Genesis Coin Inc. Purchase and Sale Agreement (the “Agreement”), dated as of October 1, 2015, by and between Athena Bitcoin, Inc. (the “Company”) and Genesis Coin, Inc. (the “Seller”). Capitalized terms used in the Agreement apply to this oral agreement between the parties.
Each of the Company and Seller acknowledge that since executing the Agreement for 2 Genesis1 Kiosk, the Company has purchased additional kiosks from the Seller at prevailing commercial prices based on the terms set forth in the Agreement. The main terms covered in the Agreement include payment terms, software license and associated fee, service level, and general warranty. This is verbal understanding between the Company and Seller that has existed since executing the Agreement in October 2015.
Additionally, each of the Company and Seller agree that future purchases will continue to adhere to prevailing commercial pricing subject to market conditions and the terms set forth in the Agreement.
Athena Bitcoin Global / agreed to by Eric Gravengaard, CEO
Genesis Coin, Inc. / agreed to by Evan Rose, President and CEO
Exhibit 10.62
THIS CONVERTIBLE DEBENTURE AND THE SECURITIES ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS CONVERTIBLE DEBENTURE IS SUBJECT TO THE TERMS AND PROVISIONS OF THE SECURITIES PURCHASE AGREEMENT DATED AS OF JANUARY 31, 2020, AS AMENDED AND IN EFFECT, AMONG THE COMPANY AND THE INVESTOR(S) NAMED THEREIN, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
THIS CONVERTIBLE DEBENTURE IS ALSO SUBJECT TO THE TERMS AND PROVISIONS OF SENIOR SECURED LOAN AGREEMENT DATED MAY 15, 2023 AS AMENDED AND IN EFFECT BY AND AMONG THE COMPANY, ITS SUBSIDIARIES AND THE HOLDER, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
AMENDED AND RESTATED SECURED CONVERTIBLE DEBENTURE
| No. CN-1 | Date of Original Issuance: January 31, 2020 |
| US$3,000,000 | Date of Amendment/Restatement and Reaffirmed Issuance: May 15, 2023 |
FOR VALUE RECEIVED, Athena Bitcoin Global a Nevada corporation (the “Company”), hereby promises to pay to the order of KGPLA Holdings, LLC, a Delaware limited liability company, or any subsequent holder hereof (the “Holder”), the principal sum of US$3,000,000 (the “Principal Amount”), together with interest thereon from the date of this Secured Convertible Debenture. Interest will accrue on the Principal Amount from the date of issuance of this Amended and Restated Secured Convertible Debenture dated as of the date set forth above (this “Secured Convertible Debenture”) at a rate of eight percent (8%) per annum (“Interest”). Unless earlier converted into Conversion Securities pursuant to Section 2.01(c) of that certain Securities Purchase Agreement dated January 30, 2020 by and among the Company, the Holder and the other parties thereto, as amended by that certain First Amendment to Securities Purchase Agreement dated July 12, 2021 (the “Purchase Agreement”), the Principal Amount and accrued interest of this Secured Convertible Debenture will be due and payable by the Company on or after the Maturity Date or upon demand by the Lead Investor in accordance with the terms and conditions of the Purchase Agreement.
WHEREAS, this Secured Convertible Debenture is one of a series of Secured Convertible Debentures originally issued pursuant to the Purchase Agreement, and capitalized terms not defined herein will have the meanings set forth in the Purchase Agreement; and
WHEREAS, the Company has requested that the Holder extend further credit to the Company pursuant to that certain Senior Secured Loan Agreement dated May 15, 2023 by and among the Holder, as lender, and the Company and its subsidiaries, as the borrowers (the “Secured Loan Agreement”), and as a condition to loaning additional funds to the Company under the Secured Loan Agreement, the Company agreed (i) to amend and restate this Secured Convertible Debenture such that it become a secured, and not general unsecured, obligation of the Company on par with the Notes (as defined in the Secured Loan Agreement) issued concurrently with the amendment hereof, pursuant and subject to the Security Documents (as defined in the Secured Loan Agreement) made and delivered in connection with the transactions contemplated by the Secured Loan Agreement, and (ii) to reaffirm the Company’s obligations to repay the Principal Amount and all sums otherwise due and owing hereunder, in accordance with the terms of the Purchase Agreement and this Secured Convertible Debenture, and otherwise to reaffirm all provisions thereof and hereof.
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1. Payment; Reaffirmation.
(a) All payments will be made in lawful money of the United States of America at the principal office of the Company, or at such other place as the Holder may from time to time designate in writing to the Company. Payment will be credited first to accrued interest due and payable, with any remainder applied to principal. Prepayment of principal, together with accrued interest, may not be made without the written consent of the Holder, except in the event of a Corporate Transaction (as set forth in Section 2.01(c)(ii)(1) of the Purchase Agreement).
(b) Interest shall be calculated based on actual number of days elapsed over a year of 365 days and paid quarterly no later than twenty (20) days following each quarter. Notwithstanding any other provision of this Secured Convertible Debenture, the Holder will not charge and the Company shall not be required to pay any interest or other fees or charges in excess of the maximum rates or amounts permitted by applicable law and in the event any payments are made in excess of such maximum, such payments shall be refunded to the Company or credited to reduce the Principal Amount. All payments received by the Holder hereunder will be applied first to reasonable costs of collection, if any, then to Interest, and then the balance to the Principal Amount.
(c) The entirety of the Company’s obligations in respect of this Secured Convertible Debenture and the Purchase Agreement to the Holder, including all amounts due and owing pursuant hereto and thereto, are expressly reaffirmed and acknowledged in their entirety by the Company, as a binding legal obligation of the Company for all purposes. In the event of any conflict between any term or provision of the Purchase Agreement or this Secured Convertible Debenture, the term or provision of the Purchase Agreement or this Secured Convertible Debenture, as the case may be, will govern.
2. Security. This Secured Convertible Debenture is secured by a first-priority lien on the Collateral (as that term is defined in, and pursuant to, the Securities Documents made and issued in favor of the Holder in connection with the Secured Loan Agreement), which liens are pari passu first-priority liens of the Holder with those other concurrent liens on the Collateral pursuant to the Notes (as defined in the Secured Loan Agreement) issued in favor of and held by the Holder.
3. Conversion of the Secured Convertible Debentures. This Secured Convertible Debenture and any amounts due hereunder will be convertible into Conversion Shares in accordance with the terms of Section 2.01(c) of the Purchase Agreement, pursuant to the conversion notice attached hereto in substantial form.
4. Events of Default. An “Event of Default” will occur if any of the following occurs:
(a) the Company fails to make any payment of the Principal Amount of Interest when due within ten (10) business days following the Holder’s written demand for payment;
(b) the Company materially breaches any representation or warranty contained in, or fails to comply with, any of the terms or covenants of the Purchase Agreement or this Secured Convertible Debenture, and such breach or failure is not cured within thirty (30) days after the Holder has given the Company written notice of such breach, or otherwise is in material breach of any representation, warranty, term or covenant of the Loan Documents (as defined in the Secured Loan Agreement), including, without limitation, of Secured Loan Agreement, the Notes or the Security Documents;
(c) involuntary proceedings shall have been commenced against the Company (i) under federal bankruptcy law or under any applicable federal or state bankruptcy, insolvency, or similar law, which seek the general adjustment of the Company’s debts, (ii) seeking the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any material part of the Company’s property, or (iii) seeking an order winding up or liquidating the assets of the Company are initiated and continue for a period of sixty (60) days;
(d) (i) a voluntary proceeding shall have been commenced under federal bankruptcy law, or any other applicable federal or state bankruptcy, insolvency, or other similar law, (ii) the consent by the Company to the appointment of, or taking possession by, a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Company or for any material part of the Company’s property, (iii) the Company making any assignment for the benefit of creditors, (iv) the admission in writing of the Company generally to pay the Company’s debts as they become due, (v) the failure of the Company generally to pay the Company’s debts as they become due (which failure results in an acceleration of, a default under or breach of any agreement for such indebtedness), or (vi) the taking of any formal action by the Company in furtherance of any of the foregoing; or
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(e) judgment(s) for the payment of money in excess of $100,000, individually or in the aggregate, shall have been rendered by a court of record against the Company, and such judgment shall continue unsatisfied and in effect for a period of ninety (90) consecutive days without being stayed, vacated, discharged, satisfied or bonded pending appeal; provided, however, that no Event of Default shall exist under this Section 4(e) if the Company is in good faith contesting such judgment.
5. Remedies on Default. Upon the occurrence of an Event of Default, at the option and upon the declaration of the Required Holders (i) the entire unpaid Principal Amount and accrued and unpaid interest on this Secured Convertible Debenture and all other Secured Convertible Debentures shall, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable (provided that if an Event of Default specified in Section 4.c) or Section 4.d) occurs, this Secured Convertible Debenture shall become immediately due and payable without any declaration or other act on the part of the Holder) and (ii) interest shall accrue on the unpaid Principal Amount from and after the date of such Event of Default at a rate equal to eighteen percent (18%) per annum, and the Holder may, among other things, proceed to protect and enforce its rights hereunder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in the Purchase Agreement, or for an injunction against a violation of any of the terms hereof or thereof or in the exercise of any power granted hereby or thereby or by law. No right conferred upon the Holder hereby or by the Purchase Agreement shall be exclusive of any other right referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. In the event of an Event of Default, payment shall be made on this Secured Convertible Debenture in the form of a certified check or other immediately available funds. Nothing herein will affect any of the Holder’s rights under the Secured Loan Agreement or the Security Documents in respect of its rights and remedies in an event of default thereunder including, without limitation, its rights to foreclose on the Collateral pledged pursuant to the Security Documents.
6. Transferability. No sale, pledge or transfer (“Transfer”) of this Secured Convertible Debenture will be accepted or recognized by the Company unless registration is not required under the Securities Act in respect of such transaction and such Transfer does not violate any applicable federal, state or other securities laws; provided, however, that no Transfer shall be effective without the prior written consent of the Board of Directors of the Company (which shall not be unreasonably withheld). The Company may elect, in its sole discretion, prior to any Transfer to require an opinion of counsel with respect to such matters, except that no opinion shall be required with respect to (i) a Transfer by a Holder to any Affiliate or their respective directors, officers, partners or members; a Transfer by a Holder which is a partnership to a partner of such partnership or a retired partner of such partnership or to the estate of any such partner or retired partner; or a Transfer by a Holder which is a limited liability company to a member of such limited liability company or a retired member or to the estate of any such member or retired member, provided that the transferee in each case agrees in writing to be subject to the terms of this Secured Convertible Debenture and the Purchase Agreement or (ii) a Transfer made in accordance with Rule 144 under the Securities Act, provided that the transferee agrees in writing to be subject to the terms of this Secured Convertible Debenture and the Purchase Agreement (such transactions, a “Permitted Transfer”). In the event of a Permitted Transfer, upon the receipt of the original executed copy of this Secured Convertible Debenture from the Holder, the Company will promptly issue a new Secured Convertible Debenture in the name of the transferee at no charge, except for any applicable transfer taxes.
7. Miscellaneous.
(a) Defenses. The obligations of the Company under this Secured Convertible Debenture shall not be subject to reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for any reason.
(b) Attorneys’ and Collection Fees. Should the indebtedness evidenced by this Secured Convertible Debenture or any part hereof be collected at law or in equity or in bankruptcy, receivership or other court proceedings, or this Secured Convertible Debenture be placed in the hands of attorneys for collection, the Company agrees to pay, in addition to the Principal Amount and accrued interest due and payable hereon, all costs of collection, including, without limitation, reasonable attorneys’ fees and expenses, incurred by the Holder in collecting such indebtedness or enforcing this Secured Convertible Debenture.
(c) Waiver of Presentment. The Company hereby waives presentment, demand for payment, notice of dishonor, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of this Secured Convertible Debenture.
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(d) Amendments and Waivers; Resolutions of Dispute; Notice. The amendment or waiver of any term of this Secured Convertible Debenture, the resolution of any controversy or claim arising out of or relating to this Secured Convertible Debenture and the provision of notice among the Company and the Holder will be governed by the terms of the Purchase Agreement.
(e) Successors and Assigns. This Secured Convertible Debenture applies to, inures to the benefit of, and binds the respective successors and assigns of the parties hereto; provided, however, that the Company may not assign its obligations under this Secured Convertible Debenture without the written consent of the Lead Investor. Any transfer of this Secured Convertible Debenture may be effectuated only pursuant to the Purchase Agreement and by surrender of this Secured Convertible Debenture to the Company and reissuance of a new Secured Convertible Debenture to the transferee. The Holder and any subsequent holder of this Secured Convertible Debenture receives this Secured Convertible Debenture subject to the foregoing terms and conditions and agrees to comply with the foregoing terms and conditions for the benefit of the Company and any other Purchasers (or their respective successors or assigns).
(f) Officers and Directors Not Liable. In no event will any officer or director of the Company be liable for any amounts due and payable pursuant to this Secured Convertible Debenture.
(g) Limitation on Interest. In no event will any interest charged, collected or reserved under this Secured Convertible Debenture exceed the maximum rate then permitted by applicable law, and if any payment made by the Company under this Secured Convertible Debenture exceeds such maximum rate, then such excess sum will be credited by the Holders as a payment of principal.
(h) Choice of Law. This Secured Convertible Debenture, and all matters arising out of or relating to this Secured Convertible Debenture, whether sounding in contract, tort, or statute will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to the conflicts of law provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Delaware.
(i) Notice. Any notice required or permitted under this Secured Convertible Debenture shall be effectuated in accordance with the provisions of Section 9.03 of the Purchase Agreement.
(j) Approval. The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved the Company’s execution of this Secured Convertible Debenture based upon a reasonable belief that the principal provided hereunder is appropriate for the Company after reasonable inquiry concerning the Company’s financing objectives and financial situation. In addition, the Company hereby represents that it intends to use the principal of this Secured Convertible Debenture primarily for the operations of its business, and not for any personal, family or household purpose.
| COMPANY: | |
|
Athena Bitcoin Global, a Nevada corporation
By: /s/ Matias Goldenhorn
Name: Matias Goldenhorn
Title: CEO |
| 4 |
[FORM OF CONVERSION NOTICE]
| TO: | GAMEPLAN, INC. 1332 N Halsted St Ste 401 |
| Chicago, IL, 60642 | |
| Attention: CEO/President |
The undersigned owner of this Amended and Restated Secured Convertible Debenture due January 30, 2025 (the “Debenture”) issued by Athena Bitcoin Global, a Nevada corporation (the “Company”) hereby irrevocably exercises its option to convert $____________, which is equal to the Principal Amount (and any amount of interest thereon accrued but unpaid or to be paid by the Company concurrently with the conversion in lieu thereof as of the intended conversion date), into shares of the Company’s common stock (“Common Stock”) in accordance with the terms of the Debenture and the Securities Purchase Agreement of even date therewith (the “Purchase Agreement”). The undersigned hereby instructs the Company to convert the portion of the Debenture specified above into shares of Common Stock issued at Conversion in accordance with the provisions of the Debenture and Section 2.01(c) of the Purchase Agreement. The undersigned directs that the Common Stock and certificates therefor deliverable upon conversion, the Debenture reissued in the Principal Amount not being surrendered for conversion hereby, the check in payment of the accrued and unpaid interest thereon (if so paid by the Company concurrently herewith) to the date of this Notice, be registered in the name of and/or delivered to the undersigned unless a different name has been indicated below. All capitalized terms used and not defined herein have the respective meanings assigned to them in the Debenture and the Purchase Agreement. The conversion pursuant hereto shall be deemed to have been effected at the date and time specified below, and at such time the rights of the undersigned as a Holder of the Principal Amount of the Debenture set forth above shall cease and the Person or Persons in whose name or names the Common Stock issued upon conversion shall be registered shall be deemed to have become the holder or holders of record of the Common Stock shares represented thereby and all voting and other rights associated with the beneficial ownership of such Common Stock shares shall at such time vest with such Person or Persons.
Date and time:
| KGPLA Holdings LLC | |
| By: ______________________________ | |
| Name: Jason Lu | |
| Title: Manager |
Fill in for registration of Debenture:
Please print name and address
(including ZIP code number):
KGPLA Holdings LLC
Attn: Jason Lu, Manager
10830 SW 69th Ave
Pinecrest, FL 33156
| 5 |
Exhibit 10.64
PFS:009730.0005.3399201.1 MANAGED SERVICES TERMINATION AGREEMENT This MANAGED SERVICES TERMINATION AGREEMENT (this “Agreement”) dated as of this 23 rd day of October, 2024 (the “Effective Date”), is by and between William Mgt, LLC an Illinois Limited Liability Company (the “ Provider ”) on the one hand and Athena Bitcoin, Inc . a Delaware corporation ( “ Company ”) . Each may be referred to herein as a “Party” or collectively as “Parties” . RECITALS WHEREAS, Provider has been providing Company with Bitcoin Kiosks (the “ Kiosks ”) management services, which such services included assisting in identifying merchant locations for Company, installation of Kiosks at certain merchant locations, maintaining and storing an inventory of the Kiosks and assisting with management of merchant customer service, among other services requested by Company of Provider from time to time (collectively the “ Management Services ”) pursuant to the Client Services Agreement between the Parties executed on April 26 , 2024 (the “ Management Services Agreement ”) . WHEREAS, Company has been : i) paying Provider for the Management Services ; and ii) providing Provider with office space within the Company’s offices to create efficiencies and collaboration in Providers delivery of the Management Services to Company . WHEREAS, the Parties desire to terminate their Management Services agreement. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Incorporation of the Recitals . The above recitals are hereby incorporated in and made a part of this Agreement as if set forth herein . 2. Termination . Upon the Effective Date, Provider shall: a. Cease providing any Management Services to the Company ; b. Work with Company to assist transition of its employees that were dedicated to Company in providing the Management Services to full - time employment with Company . The aforementioned notwithstanding, Company agrees it will not hire or otherwise solicit or seek to employ or engage in any capacity, Carolina Rios, who will remain with Provider following the Effective Date ; and c. Provider shall begin vacating the Company’s office space, with such move out date to be completed within ninety ( 90 ) days of the Effective Date . 3. Post Termination Obligations . Following the Effective Date, Provider shall have no further obligations to provide Management Services to the Company and Company shall have no obligation to make payment pursuant to the Management Services Agreement . Provided however, Company may seek assistance from Provider in transitioning the services from Provider to Company and Provider shall assist Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
Athena Bitcoin, Inc . /Athena Bitcoin Global c/o Matias Goldenhorn – CEO & President 1 SE 3 rd Avenue – Ste 2740 Miami, FL 33131 Email : matias@athenabitcoin . com 2 PFS:009730.0005.3399201.1 Company in such post termination transition services . Ninety days following the Effective Date, Provider’s obligation to cooperate with Company in the transitioning of its services shall lapse and Provider shall have no further obligations to provide such services to Company under the Management Services Agreement, absent an amendment to this Agreement pursuant to Section 5 below . 4. Assignment . This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns . No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party . 5. Amendments and Waivers . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto . No waiver by any party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such default, misrepresentation, or breach of warranty or covenant . 6. No Waiver ; Cumulative Remedies . The failure of either party to enforce any one or more of the terms or conditions of this Agreement will not be deemed a waiver of such terms or conditions or limit the right to enforce any term and condition . All rights and remedies provided are cumulative and are not exclusive of any rights or remedies provided by law . 7. Governing Law/Venue . This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida . Each of the parties hereto submits to the non - exclusive jurisdiction of any state or federal court sitting in Miami, Florida, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court . 8. Notice . All notices, requests, demands, claims, and other communications hereunder shall be in writing . Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) one ( 1 ) business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) one ( 1 ) business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) three ( 3 ) business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below : If to Provider: William Mgt., LLC P.O. Box 192135 Miami Beach, Florida 33193 Attention: Jordan Mirch Email: jmirch@williammgt.com If to Company: Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
3 PFS:009730.0005.3399201.1 9. With a copy that shall not constitute notice, to: legal@athenabitcoin.com Severability . If any provision of this Agreement or portion thereof should be declared invalid for any reason, the invalid provision or portion hereof shall be deemed omitted and the remaining terms shall nevertheless be carried into effect. 10. Counterparts . This Agreement may be executed in one or more counterparts (including by means of facsimile or electronic PDF copy), each of which shall be deemed an original but all of which together shall constitute one and the same instrument . 11. Further Assurances . The parties hereto shall execute such further documents, and perform such further acts, as may be necessary to effectuate the terms of this Agreement, and to otherwise comply with the terms of this Agreement and consummate the transactions contemplated hereby . 12. Entire Agreement . This Agreement (including the documents and exhibits referred to herein) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they relate in any way to the subject matter hereof . 13. Waiver of Conflict of Interest . In connection with the preparation of this Agreement, each of the Parties acknowledges and agrees that (a) PFS has acted as legal counsel to the Company and Provider in the preparation of this Agreement, (b) the Parties have been advised by PFS that their respective interests may be opposed to one another, and (c) they have each been advised to retain separate legal counsel . Notwithstanding the foregoing, the Parties desire that PFS represent the Company and Provider, have retained separate counsel or have knowingly waived their right to do so and jointly and severally forever waive any claim that representation of the Company and Provider by PFS constitutes a conflict of interest which has or may result in any of them suffering damages, losses or other injuries from the transactions contemplated by this Agreement . 14. Taxes . All transfer, documentary, sales, use, stamp, registration and other such taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement shall be born by the responsible party . 15. Costs and Attorney’s Fees . In the event either party brings an action to enforce the terms of this Agreement, the non - prevailing party in such action shall pay to the prevailing party the prevailing party’s costs and expenses, including reasonable attorneys’ fees, incurred in connection with such enforcement action . [SIGNATURE PAGE TO FOLLOW] Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3399201.1 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. PROVIDER: William Mgt, LLC By: Name: Jordan Mirch Title: Manager COMPANY: Athena Bitcoin, Inc. By: Name: Matias Goldenhorn Title: CEO & President Athena Bitcoin Global By: Name: Matias Goldenhorn Title: CEO Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3399202.1 FIRST AMENDMENT TO INTERCREDITOR AGREEMENT This First Amendment to the Intercreditor Agreement (the “ Amendment ”) is made and entered into as of October 23 , 2024 by and between KGPLA Holdings, LLC, a Delaware limited liability company (“ KGPLA ”), Taproot Acquisition Enterprises, LLC (“ Taproot ”), a Delaware limited liability company and Athena Bitcoin Global, a Nevada Corporation (“ Athena ”) . KGPLA, Taproot and Athena may be referred to herein as “ Party ” or collectively as “ Parties ” . RECITALS A. The Parties entered into that certain Intercreditor Agreement dated November 1 , 2023 (the “ Agreement ”) whereby KGPLA, agreed to a limited subordination of its first priority security position on collateral of Athena to Taproot, to assist in the facilitation of Athena’s acquisition of Bitcoin ATM Machines (“Bitcoin ATMs” or “Kiosks”) from Taproot . B. Taproot desires to sell to Athena, and Athena desires to purchase from Taproot certain additional Kiosks in which Taproot desires to maintain a first priority security interest in such Kiosks . C. In order to facilitate the sale by Taproot of additional Kiosks to Athena, the Parties desire to amend the Agreement to consent and permit Taproot to attach a first priority security interest to such Kiosks . D. Thus, the Parties desire to amend the Agreement upon the terms and conditions contained herein. TERMS NOW, THEREFORE, in consideration of the terms, conditions and covenants contained in the Agreement and in this Amendment, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows : 1. Incorporation of Recitals . The Parties agree and acknowledge that the Recitals are incorporated herein and a material consideration of this Amendment . 2. Amendments and Agreements . a. The Parties agree that the definition of “Equipment Loan Agreement” as defined in the "Re” line of the Agreement is hereby deleted in its entirety and replaced with the following : “i) the Equipment Financing Agreement dated November 2 , 2023 by and between Taproot and Athena (referred to herein individually as the “ November 2 Agreement”) ; and (ii) the Equipment Financing Agreement dated October 23 , 2024 by and between Taproot and Athena (referred to herein individually as the “ October 23 Agreement ” . b. The Parties agree that the definition of “Borrower” as defined in the second sentence of the Agreement, is hereby amended to include, Athena Bitcoin, Inc . in its capacity as a Purchaser under the November 2 Agreement and the October 23 Agreement . c. The Parties agree that the definition of “Equipment Loan Obligations” is hereby deleted in its entirety and replaced with the following: Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3399202.1 “means the Borrower’s obligation under : i) the Equipment Financing Agreement dated November 2 , 2023 , to make payment of the Base Payment to the Equipment Lender, solely with respect to the Schedule A Equipment, and such other covenants the Borrower must comply with until the occurrence of the First Payment Completion under the Equipment Loan Agreement ; and ii) that certain Equipment Financing Agreement dated October 23 , 2024 , to make payment of Purchaser’s Payment Obligations pursuant to section 2 of the Equipment Financing Agreement and such other covenants Borrower must comply with under such agreement and any subsequent amendments thereto . The Parties agree that the definition of “Taproot Equipment Collateral” is hereby deleted in its entirety and replaced with the following : d. “means the Bitcoin ATM machines that : i) Borrower purchases from the Equipment Lender pursuant to the Equipment Loan Agreement, as specifically listed on Exhibit A and Exhibit B ; and ii) Borrower purchases from Taproot pursuant to the Equipment Financing Agreement, as specifically listed on Schedule A thereto and as amended from time to time . For clarity, such collateral does not include (i) Cash Collateral ; or (ii) any other property or assets of the Borrower . e. The Parties agree that the definition of “Base Payment” is hereby deleted in its entirety and replaced with the following: “shall have the meaning given such term in the November 2 Agreement”. f. The Parties hereby agree to add the following definitions: “ Purchaser’s Payment Obligations ” shall have the meaning given such term in the October 23 Agreement. Miscellaneous . 3. a. This Amendment, together with the Agreement, constitutes the entire agreement between the parties and supersedes all prior or contemporaneous discussions, negotiations, representations, warranties, or agreements relating to the subject matter hereof . In the event of any inconsistency or conflict between this Amendment and the Agreement, this Amendment shall govern . b. Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect. c. This Amendment may be executed simultaneously in any number of counterparts, each of which will be deemed an original but all of which will together constitute one and the same agreement . This Amendment may be delivered by fax or . pdf file . d. Capitalized terms used herein but not defined herein shall have the meaning ascribed to such terms in the Agreement. [ signature page follows ] Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3399202.1 SENIOR LENDER: KGPLA Holdings, LLC Jason Lu, its Manager EQUIPMENT LENDER: Taproot Acquisition Enterprises, LLC Jordan Mirch, its Manager BORROWER: Athena Bitcoin Global Matias Goldenhorn, its CEO and President Athena Bitcoin, Inc. Matias Goldenhorn, its CEO and President Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3404248.1 EQUIPMENT FINANCING AGREEMENT THIS EQUIPMENT FINANCING AGREEMENT (this “ Agreement ”) is entered into as of October 30 , 2024 (the “ Effective Date ”) by and between Taproot Acquisition Enterprises, LLC, a Delaware limited liability company (“ Seller ”) on the one hand, and Athena Bitcoin, Inc . a Delaware corporation (collectively the “ Purchaser ”) . Purchaser and Seller are sometimes referred to herein as the “Party” or “ Parties . ” R E C I T A L S : WHEREAS, Seller owns certain Bitcoin ATM Kiosks listed on Schedule A hereto (collectively the “ Equipment ” and individually, each a “ Unit ”) ; WHEREAS, pursuant to the following agreements between the parties : Equipment Financing Agreement dated November 2 , 2023 (“ Purchase Agreement 1 ”), Equipment Financing Agreement dated December 31 , 2023 (“ Purchase Agreement 2 ”), Equipment Financing Agreement dated February 23 , 2024 (“ Purchase Agreement 3 ”), Equipment Financing Agreement dated May 4 , 2024 (“ Purchase Agreement 4 , ” and hereinafter, Purchase Agreement 1 , Purchase Agreement 2 , Purchase Agreement 3 , and Purchase Agreement 4 , shall be collectively referred to as the “ Prior Purchase Agreements ”), and the Omnibus Equipment Financing Agreement dated September 19 , 2024 (“ Omnibus Agreement ”), Seller has supplied Purchaser with equipment for use in its business operations ; WHEREAS, Seller has placed the Equipment in various retail establishments pursuant to an agreement between Seller and the operator of such retail establishment (each a “ Merchant Agreement ” and collectively the “ Merchant Agreements ” ) ; WHEREAS, Seller will cooperate with Purchaser to assign the Merchant Agreements to Purchaser pursuant to an assignment and assumption agreement in the form attached hereto as Exhibit B ; and WHEREAS, Purchaser and Seller desire to amend and supersede the Prior Purchase Agreements, formalize and document a framework for Seller to be able to supply future Units to Purchaser, allow for the assignment and assumption of the Merchant Agreements, and document Purchaser’s obligation to pay for such Units, all on the terms and conditions contained herein : AGREEMENT: NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows : 1. Purchase of Installed Equipment . Each Unit subject to this Agreement, including the installed and active Units listed on Schedule A attached hereto, shall be sold, assigned, transferred and conveyed from Seller to Purchaser, free and clear of any and all liens, pledges, encumbrances, charges or other security interest of any kind as of the Effective Date . The purchase price for each Unit which is installed and activated shall be Seven Thousand Two Hundred Dollars ( $ 7 , 200 . 00 ), per Unit (the “ Unit Purchase Price ”), to be paid as provided in Section 2 (a) below, subject to the conditions herein . The aforementioned notwithstanding, Seller’s title to the Equipment shall be subject to Seller’s first priority security interest . a. Purchase of Equipment for El Salvador . Purchaser is purchasing 110 Units from Seller for use in Purchaser’s El Salvador operations (collectively the “ El Salvador Units ” and individually the “ El Salvador Unit ”) which shall be listed on an appended Schedule A following the Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
a. Purchaser’s payment obligations for the Equipment shall be as follows: i. Purchaser shall pay to Seller, Three Million Dollars ( $ 3 , 000 , 000 . 00 ) in four ( 4 ) equal monthly installments of Seven Hundred and Fifty Thousand Dollars ( $ 750 , 000 . 00 ) with the first payment being made on or before October 31 , 2024 , and the final payment being made on or before January 31 , 2025 (the “ Down Payment ”) . ii. Beginning on the Effective Date, in addition to the Down Payment, Purchaser shall pay Seller on a weekly basis, eight - tenths of one percent ( 0 . 8 % ) of Purchaser’s revenue derived from the sale of Bitcoin in each location Purchaser maintains a Unit in the continental United States operating as an Athena Bitcoin unit (the “ Payment Amount ”) until the earlier of (i) the expiration of the Term of this Agreement, or (ii) the total amount payable under this Agreement totals the aggregate of all Units sold to Purchaser which have not been rejected or returned in accordance with this 2 delivery, installation and activation of the El Salvador Units to El Salvador, which shall be sold, assigned, transferred and conveyed from Seller to Purchaser for the Unit Purchase Price . Provided however, that in the event Purchaser elects to pay for an El Salvador Unit in full at the time of purchase, such El Salvador Unit purchase price shall be reduced to Five Thousand Dollars ( $ 5 , 000 . 00 ), per unit . The Purchaser’s payment obligations for any such new Units shall be completed pursuant to Section 2 (a) . b. Purchase of Additional Units . Pursuant to this Agreement, Purchaser shall have the right, but not the obligation to purchase additional Units from Seller as they become available (“ Additional Units ”), and in doing so, will amend the Schedule A to reflect the purchase of such Additional Units . Additional Units shall be considered sold pursuant to this Agreement effective upon : (i) Seller issuing a purchase order to Purchaser reflecting the number of Additional Units being sold along with an amended Schedule A to the email address listed for Purchaser in Section 20 (notices) ; (ii) Purchaser responding to such email acknowledging and confirming such amendment ; and (iii) written notice that Purchaser has accepted installation of the additional Unit, provided that if Purchaser has not provided written notice of such acceptance within ten ( 10 ) business days of such installation (or otherwise raised a dispute with respect to a particular Unit) then such installation shall be deemed accepted . Any Additional Unit sold from Seller to Purchaser pursuant to this Agreement will be sold at a purchase price of Seven Thousand, Two Hundred Dollars ( $ 7 , 200 . 00 ) per Unit (“ Additional Unit Purchase Price ”) and such sale will be deemed effective upon formal acceptance . The Purchaser’s payment obligations for any such new Units shall be completed pursuant to Section 2 (b) . c. Title . Title to each Unit will automatically transfer when Purchaser accepts delivery of a purchase order from Seller, duly executed by Seller . d. Audit Rights . The Parties agree that Purchaser shall have the right upon thirty ( 30 ) days’ notice to audit such books, records and accounts as it may reasonably request access to, so as to confirm that the Equipment listed on Exhibit A match with the Equipment transferred to Purchaser in accordance with this Agreement . Seller will maintain all such books, records and accounts for at least twenty - four ( 24 ) months after the transfer of such Equipment . Should Purchaser identify any discrepancy, the Parties will discuss in good faith amending the Exhibit A to accurately reflect the Units transferred . 2. Purchaser’s Payment Obligation . Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
b. Purchaser’s payment obligations for the Additional Units shall be as follows: i. Purchaser shall pay the Additional Unit Purchase Price for each Additional Unit ordered by Purchaser within thirty days of the Additional Units being deemed sold pursuant to Section 1 (b) . c. Additional Payment . Purchaser, its successor or assigns, during the Term, and only during this Term, shall pay to Seller an additional one - half of one percent ( 0 . 5 % ) of Purchaser’s revenue derived from the sale of Bitcoin in each location Purchaser maintains a Unit in the continental United States operating as an Athena Bitcoin unit (the “ Additional Payment ”), subject to the conditions in Section 2 (c)(iii) below . This Section 2 (c) amends and supersedes any other payment obligation of Purchaser contained in any of the Prior Purchase Agreements . For clarification, after the Effective Date of this Agreement, Purchaser, its affiliates or assigns, shall have no further obligations to make payment of any kind to Seller relating to or arising from the Prior Purchase Agreements, unless otherwise stated in the Omnibus Agreement . i. In the event Purchaser satisfies its payment obligations pursuant to Sections 2 (a) and 2 (b) above prior to the end of the Term, Purchaser shall have the option, in its sole discretion, to buy - out the Additional Payment obligation (the “ Buy - Out Option ”) . The Buy - Out Option price shall be determined by (i) Purchaser’s monthly revenue average as determined from Purchaser’s revenue derived from the sale of Bitcoin in every location Purchaser maintains in the continental United States operating as Athena Bitcoin over the prior 12 months divided by 12 (the “ Monthly Average ”) ; (ii) and multiplying the Monthly Average by the number of months remaining in the Term, multiplied by one - half of one percent ( 0 . 5 % ) (the ” Buy - Out Option Price ”) . For purposes of determining the number of months remaining on the Term, if Purchaser has satisfied its payment obligations pursuant to Section 2 (b) in the middle of a month, the Buy - Out Price will be prorated based on the number of days remaining in such month . Purchaser shall exercise its Buy - Out Option by providing Seller with ten ( 10 ) business days written notice of its intent 3 Agreement (“ Aggregate Equipment Purchase Price ”) . The aforementioned notwithstanding, during the Term, Purchaser’s minimum monthly payment obligation of the Payment Amount will be One - Hundred, Twenty - Five Thousand ( $ 125 , 000 . 00 ) Dollars (the “ Minimum Payment Amount ”) such that in no month will the Payment Amount to Seller be less than the Minimum Payment Amount . If on the last day of any month during the Term the Payment Amount is less than the Minimum Payment Amount, then Purchaser shall pay to Seller the difference between the Payment Amount and the Minimum Payment Amount, with such payment being made no later than the fifth day following of the following month . 1 . The Parties acknowledge and agree that Purchaser has previously paid as an advance to Seller, Two Hundred Fifty - Seven Thousand, Four Hundred, Eighty - One and 83 / 100 Dollars ( $ 257 , 481 . 83 ) to be applied against the Aggregate Equipment Purchase Price . iii. Upon the expiration of the Term, Purchaser shall owe and be obligated to pay to Seller, the then outstanding balance on all Equipment subject to this Agreement and any amendments hereto . Failure by Purchaser to pay the outstanding balance on the thirty - six - month anniversary of the Effective Date shall be a Purchaser Event of Default pursuant to Section 7 below . Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
to exercise the Buy - Out Option with such Buy - Out Option Price (as defined herein) being paid to Seller on the tenth business day following the exercised notice (the “ Buy - Out Option Payment Date ”) . Contemporaneously with Purchaser’s exercise of the Buy - Out Option, Purchaser will present to Seller its calculations in support of the Buy - Out Option Price . Thereafter, Seller will have three ( 3 ) business days to object and provide its own calculation of the Buy - Out Option Price . If Seller objects to the Buy - Out Option Price, the Buy - Out Payment Date shall be extended by ten ( 10 ) business days and the Parties will submit each calculation to a non - interested, third - party neutral with a Certified Public Accountant license to review and determine the correct Buy - Out Option Price, with such determination being binding upon the Parties . Upon the issuance of such third - party neutral’s determination, Purchaser shall have five ( 5 ) business days thereafter to pay the Buy - Out Option Price to Seller . It shall be a Purchaser Event of Default pursuant to Section 7 below, in the event Purchaser fails to pay the Buy - Out Option Price on the Buy - Out Option Payment Date . ii. Purchaser’s obligations hereunder shall be joint and several. iii. For the purposes of Section 2 (c), the sale of Bitcoin from “Athena Bitcoin units” from which the Additional Payment will be derived includes sales made by Purchaser, its affiliates, and by those arising from asset acquisition transactions that are sourced and negotiated by Seller . Provided, that Athena Bitcoin unit sales made after the Effective Date that arise from any of Purchaser’s subsequent mergers and acquisitions with or of other entities, or asset acquisition transactions which are not sourced and negotiated by Seller, are not included in the Additional Payment calculation . 3. Purchaser Right to Return Units . In addition to all other rights and remedies set forth in this Agreement, Purchaser shall have the right upon ten ( 10 ) business days’ notice to Seller, at its sole election, return any Unit which Purchaser believes or has reason to believe, is subject to a dispute regarding its ownership in the event Seller does not cure such dispute regarding ownership prior to the notice period herein lapsing . Should Purchaser exercise such right, Seller shall credit the Unit price against any other amounts owed under this Agreement . Such Unit shall be available for repurchase once Purchaser has determined that Seller has clear and merchantable title . The aforementioned notwithstanding, Purchaser may not exercise this right in Section 3 with respect to Units acquired by Seller from SandP Solutions, LLC . 4. Purchase Money Security Interest . As collateral security for the payment of the purchase price of the Equipment and performance in full of all the obligations of the Purchaser under this Agreement, the Purchaser hereby pledges and grants to the Seller, a lien on and first priority security interest in and to all of the right, title and interest of the Purchaser in, to and under the Equipment listed on Schedule A, and as amended from time to time, wherever located, and whether now existing or hereafter arising or acquired from time to time, and in all accessions thereto and replacements or modifications thereof, as well as proceeds (including insurance proceeds) of the foregoing . The security interest granted under this provision constitutes a purchase - money security interest under Article 9 of the Florida Uniform Commercial Code . 5. Term . The term of this agreement will be thirty - six ( 36 ) months from the Effective Date (the “ Term ”), with any outstanding payment obligation pursuant to Section 2 being due and owing on the conclusion of the thirty - sixth month following the Effective Date . 6. Covenants . The following covenants of Purchaser and Seller shall apply until the Unit Purchase price for each Unit subject to this Agreement and any amendment hereto, has been paid in full . 4 Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
iv . Further Assurances . Purchaser agrees to execute and deliver from time to time upon reasonable request of Seller such other instruments of assignment, conveyance and transfer and take such other action as Seller may reasonably request for the purpose of perfecting, continuing, amending, protecting or further evidencing the arrangements contemplated hereby or to enable Seller to exercise and enforce its rights and remedies hereunder . Purchaser will, at Purchaser's expense, upon each request of Seller (i) authorize Seller to file, from time to time, financing statements or other records in such public offices as Seller may require, together with continuation statements thereof and amendments thereto, containing, among other things, (a) a description of the Equipment as Seller may require, and (b) Purchaser's federal taxpayer identification number and/or state organizational number, if any, and any other identifying information as Seller may require, and (ii) comply with every other requirement deemed necessary by Seller for the perfection of its security interest in the Equipment . Without diminishing or impairing any of Purchaser's obligations hereunder, a photographic, electronic or other reproduction of this Agreement shall be sufficient as a financing statement . b. Seller Covenants: i. During the Term of this Agreement, Seller will use reasonable efforts to assist the Purchaser in growing its business which shall include but not be limited to the following : procure new locations for the Purchaser’s Bitcoin units, promote and 5 a. Purchaser Covenants: i. Inspection . Purchaser will at all times keep accurate and complete records of the Equipment based on what was provided to it by Seller . Upon providing notice to Purchaser at least one ( 1 ) business day in advance, Seller and its agents shall have at its sole cost and expense, the right at all reasonable times to examine and inspect the Equipment and to make extracts from the books and records related to the Schedule A Equipment, and at its sole cost and expense to examine, appraise and protect the Schedule A Equipment . ii. No Transfer or Encumbrance . During the Term of this Agreement, Purchaser agrees that it will not, without in each case obtaining Seller’s prior written consent, (i) sell, lease, transfer or otherwise dispose of all or any part of the Equipment listed on Schedule A or any amendment thereto or license any of the Equipment on Schedule A or any amendment thereto except as otherwise permitted herein, or (ii) encumber the Equipment on Schedule A or any amendment thereto, including, but not limited to, through adverse claims, assignments, attachments, leases, mortgages, security interests, or other liens of any kind or nature (the “ Encumbrances ”) except those in favor of Seller and those consented to in writing by Seller (the “ Permitted Encumbrances ”) . iii. Preservation of the Equipment ; Risk of Loss . Purchaser will at its sole cost and expense maintain the Equipment in good condition and repair, except for ordinary wear and tear or other intentional damages caused by a third party, and in no event in better condition than as of the date transfer to Purchaser . Purchaser will promptly pay all taxes, levies and all costs of repair, maintenance and preservation . Purchaser bears the risk of loss of the Equipment . Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
a. Purchaser Default . The Purchaser shall, at Seller’s option, be in default under this Agreement upon the happening of any of the following events or conditions (each, an “Purchaser Event of Default ”) : (a) the failure by the Purchaser to perform any of its obligations under this Agreement ; (b) falsity or inaccuracy in any material respect or material breach by the Purchaser of any written warranty, representation or statement made or furnished to Seller by or on behalf of the Purchaser ; (c) the entry of any judgment against the Purchaser placing a lien against or the making of any levy, seizure or attachment of or on the Equipment that could (in Seller’s reasonable sole discretion) have a material adverse effect on the financial condition of the Purchaser or the ability of the Purchaser to perform its obligations ; or (d) any willful act of Purchaser which causes the failure of Seller to have a perfected first priority security interest in the Equipment ; or (e) evidence received by Seller that the Purchaser may have directly or indirectly been engaged in any type of illegal activity which, in Seller’s reasonable discretion, might result in the forfeiture of any property of the Purchaser by any governmental entity, federal, state or local, provided, that, upon the occurrence of any of the foregoing, such event or condition shall not be considered a Purchaser Event of Default unless and until Seller provides notice to Purchaser of its occurrence, and such Purchaser Event of Default is not cured by Purchaser within ten ( 10 ) business days thereafter . Purchaser may cure a Purchaser Event of Default pursuant to Section 7 (e) if within fifteen ( 15 ) days of being notified from Seller of a potential forfeiture of a Unit it pays to Seller the Unit Purchase Price for such Unit or Units that are subject to forfeiture . The above notwithstanding, it will not be an event of default if Purchaser is unable to operate in a particular jurisdiction due to changes in licensing requirements at the local, municipal or state level . Provided however, that Purchaser’s inability to operate in a particular jurisdiction will not limit, modify or alter Purchaser’s payment obligations in Section 2 above . b. Events of Default by Seller . The Seller shall, at Purchaser’s option, be in default under this Agreement upon the happening of any of the following events or conditions (each, an “Seller Event of Default”) : (a) the failure by the Seller to perform any of its obligations under this Agreement ; (b) falsity or inaccuracy in any material respect or material breach by the Seller of any written warranty, representation or statement made or furnished to Purchaser by or on behalf of the Seller ; (c) the entry of any judgment against the Seller placing a lien against or the making of any levy, seizure or attachment of or on the Equipment that could (in Purchaser’s reasonable sole discretion) have a material adverse 6 market the Purchaser’s business, and related services, and support the Purchaser’s revenue growth and improve its current operations . Provided that Seller’s failure to perform its obligations under this Section 6 (b) shall not be deemed a Seller Default . ii. Seller will at its cost, within ten (10) days of notice, discharge or bond any lien filed by any person or entity in relation to the Equipment. iii. Seller agrees to execute and deliver from time to time upon reasonable request of Purchaser such other instruments of assignment, conveyance and transfer and take such other action as Purchaser may reasonably request for the purpose of perfecting, continuing, amending, protecting or further evidencing the arrangements contemplated hereby or to enable Purchaser to exercise and enforce its rights and remedies hereunder and to take title to such Equipment . 7. Events of Default . Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
a. Seller Remedies . Upon the occurrence of any such Purchaser Event of Default and at any time thereafter, Seller may declare all of the payments owed for the Equipment secured hereby, and any amendment hereto, immediately due and payable and shall have, in addition to any remedies provided herein or by any applicable law or in equity, all the remedies of a secured party under the UCC . Seller’s remedies include, but are not limited to, the right to (a) peaceably by its own means or with judicial assistance enter the Purchaser’s premises, or wherever such Equipment may be and take possession of the Equipment without prior notice to the Purchaser or the opportunity for a hearing, and (b) require the Purchaser to assemble the Equipment and make it available to Seller at a place designated by Seller . Expenses of retaking, holding, preparing for disposition, disposing or the Equipment shall include Seller’s reasonable attorneys’ fees and legal expenses, incurred or expended by Seller to enforce any payment due it under this Agreement either as against the Purchaser, or in the prosecution or defense of any action, or concerning any matter growing out of or connection with the subject matter of this Agreement and the Equipment pledged hereunder . Seller’s rights under this Section 8 shall lapse upon Purchaser’s full satisfaction of its payment obligations under Section 2 (a) above . b. Buyer Remedies . Upon the occurrence of any such Seller Event of Default and at any time thereafter, Purchaser may pursue any remedies provided herein or by any applicable law or in equity . If the Seller Event of Default is due to a reach of Section 6 (b)(ii) Purchaser’s remedies shall include, but are not limited to, the right to step - in on Sellers behalf and at Seller’s sole cost and expense, including attorney’s fees, to discharge or bond any lien, claim, or charge filed by any person or entity in relation to the Equipment and take any other action necessary to ensure clean and marketable title . Expenses include Purchaser’s reasonable attorneys’ fees and legal expenses, incurred or expended by Purchaser to enforce any payment due it under this Agreement either as against the Seller, or in the prosecution or defense of any action, or concerning any matter growing out of or connection with the subject matter of this Agreement and the Equipment . 9 . Assignment and Assumption of Merchant Agreements . Within ninety days ( 90 ), of the execution of this Agreement, and from time to time as Additional Units are purchased, the Parties will use best efforts to enter into the Assignment and Assumption Agreement attached hereto as Exhibit B, which will have as a schedule, each of the Merchant Agreements being assumed by Purchaser . For clarification purposes only, Purchaser acknowledges that there are Merchant Agreements which can only be assigned 7 effect on the financial condition of the Purchaser or the ability of the Seller to perform its obligations ; or (d) any willful act of Seller which causes the failure of Purchaser to have clean and marketable title in the Equipment ; or (e) evidence received by Purchaser that the Seller may have directly or indirectly been engaged in any type of illegal activity which, in Purchaser’s reasonable discretion, might result in the forfeiture of any property of the Purchaser or Seller by any governmental entity, federal, state or local, provided, that, upon the occurrence of any of the foregoing, such event or condition shall not be considered a Seller Event of Default unless and until Purchaser provides notice to Seller of its occurrence, and such Seller Event of Default is not cured by Seller within ten ( 10 ) business days thereafter . Seller may cure a Seller Event of Default pursuant to Section 7 (e) if within fifteen ( 15 ) days of being notified from Purchaser of a potential forfeiture of a Unit it pays to Purchaser the Unit Purchase Price for such Unit or Units that are subject to forfeiture or replaces such Unit or Units with a Unit or Units that is not subject to potential forfeiture . 8. Remedies . Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
with prior consent of the merchant and that Seller is making no representation to the assignability of such Merchant Agreements. 10. Representations and Warranties of Seller . Seller represents and warrants to Purchaser that the statements contained in this Section 10 are correct and complete as of the date hereof. a. Seller is a private limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware . b. Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder . Without limiting the generality of the foregoing, the Members and Manager of Seller have duly authorized the execution, delivery, and performance of this Agreement by Seller . This Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms and conditions . c. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or any provision of the corporate charter of Seller or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound . Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any third party, government or governmental agency in order for the Parties hereto to consummate the transactions contemplated by this Agreement . d. No Violation of Law ; Litigation . It is not in violation of any applicable law, which violations, individually or in the aggregate, would affect performance of any of its obligations under this Agreement . There are no proceedings by or before any court, governmental authority, or dispute resolution body now pending or to its actual knowledge threatened against it which, if adversely determined, could reasonably be expected to have a material adverse effect on its financial condition or right or ability to perform its obligations under this Agreement . This section excludes Seller’s lawsuit pending and active with SandP Solutions, LLC . e. Seller has good and marketable title and ownership, free and clear of all liens, encumbrances, claims, charges, restrictions on transfer, to all Equipment, documentation, materials, software and all other items required for the intended use of the Equipment . Except for the representations contained in this Agreement, Seller is selling the Equipment on an “As Is” basis. 11. Representations and Warranties of Purchaser . Purchaser represents and warrants to Seller that the statements contained in this Section 11 are correct and complete as of the date hereof. a. Athena Bitcoin, Inc . , is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware and is a wholly owned subsidiary of Athena Bitcoin Global, a Nevada corporation and a publicly listed company on otc markets . b. Purchaser has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder . This Agreement constitutes the valid and legally binding obligation of Purchaser, enforceable in accordance with its terms and conditions . 8 Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
c . Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Purchaser is subject or any provision of the corporate charter of Purchaser or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any agreement, contract, lease, license, instrument, or other arrangement to which Purchaser is a party or by which it is bound . Purchaser need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any third party, government or governmental agency in order for the Parties hereto to consummate the transactions contemplated by this Agreement . 12. Seller’s Indemnity . Purchaser shall defend, indemnify and hold harmless Seller and its affiliates, and their respective employees, officers, directors, shareholders and agents (collectively, the “ Seller’s Indemnities ”) from and against any and all losses, liabilities, penalties, fines, damages, expenses (including reasonable attorney’s fees), causes of action, suits or claims of every kind and irrespective of the theory upon which based (collectively, “ Losses ”) relating to or arising from (i) permanent loss and/or damage to the Equipment ; and (ii) any third party claims brought against Seller which are the result of the Purchaser’s breach of this agreement, gross negligence or willful misconduct, except to the extent caused by Seller’s gross negligence or willful misconduct . This Section 12 shall survive termination of this Agreement . 13. Purchaser’s Indemnity . Seller shall defend, indemnify and hold harmless Purchaser, its successors and assigns, and their respective employees, officers, directors, shareholders and agents (collectively, the “ Purchaser’s Indemnities ”) from and against any and all Losses relating to or resulting from (i) the Equipment, including without limitation, Seller’s lack of title to any of the Equipment free and clear of any and all liens or encumbrances ; (ii) permanent loss and/or damage to the Equipment prior to the date of transfer to Purchaser ; (iii) any third party claims brought against Purchaser which are the result of the Seller’s title to the Equipment, including but not limited to Seller’s breach of this Agreement, except to the extent caused by Seller’s gross negligence or willful misconduct . This Section 13 shall survive termination of this Agreement . a. In the event a claim is asserted against Purchaser arising from Seller’s actions with respect to title to a Unit or improper installation of a Unit by Seller at a merchant location then Purchaser may, at its sole election : (i) remove such Unit from the disputed location and place such Unit at a different location ; (ii) return such Unit to Seller and deduct the Unit Purchase Price for such Unit from the total balance owed to Seller ; or (iii) request a new Unit from Seller to replace such Unit where there is a dispute regarding clear title to such Unit . 14. Assignment . This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns . No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party ; provided, however, that Seller or Purchaser may assign any or all of its rights and interests hereunder to one or more of its affiliates . 15. Amendments and Waivers . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Parties hereto . No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, 9 Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such default, misrepresentation, or breach of warranty or covenant 16. Exclusivity; Non - competition; Non - disparagement . a. For Seventy Eight ( 78 ) months following the Effective Date, Seller, its principals and affiliates, including William Mgt . LLC and Jordan Mirch (the “ Seller Parties ”), agree to exclusively promote, market and sell Units to Purchaser, its successors, assigns and affiliates . b. For Seventy Eight ( 78 ) months following the Effective Date, and other than Purchaser’s business, and pre - existing agreements as of the Effective Date, Seller Parties shall not participate as an owner, manager, employee, investor, contractor or consultant in any business that is competitive or a competitor to Purchaser’s business as it is as of the Effective Date . c. For Seventy Eight ( 78 ) months following the Effective Date, Seller further agrees not to directly or indirectly, in any communications with any person or entity, make any derogatory, disparaging, critical and/or negative statement whether oral, written or otherwise, against or about Purchaser . 17. Participation in Purchaser’s Equity Compensation Plan . In consideration for the rights and obligations of Seller hereunder, Purchaser acknowledges and agrees that Seller will be eligible to participate in Purchaser’s Equity Compensation Plan, following the completion of Purchaser's S - 1 process and applicable laws and regulations . 18. Amendments to Prior Purchase Agreements . In consideration for the rights and obligations of both Parties hereunder, the Parties wish to amend certain sections of the Prior Purchase Agreements and the Omnibus Agreement as follows : a. Prior Purchase Agreements . The Parties acknowledge that each Exhibit A contained in the Prior Purchase Agreements are incorrect and do not accurately capture the prior units sold . The Parties wish to amend each Exhibit A . i. Each of the Prior Purchase Agreements Exhibit A is hereby amended and replaced with the specific Exhibit A attached on Schedule B to this Agreement. 19. No Waiver ; Cumulative Remedies . The failure of Seller or Purchaser to enforce any one or more of the terms or conditions of this Agreement will not be deemed a waiver of such terms or conditions or limit the right to enforce any term and condition . All rights and remedies provided are cumulative and are not exclusive of any rights or remedies provided by law . 20. Governing Law/Venue . This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida . Each of the Parties hereto submits to the non - exclusive jurisdiction of any state or federal court sitting in Miami, Florida, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court . 21. Notice . All notices, requests, demands, claims, and other communications hereunder shall be in writing . Any notice, request, demand, claim, or other communication hereunder shall be deemed duly 10 Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
given (i) when delivered personally to the recipient, (ii) one ( 1 ) business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) one ( 1 ) business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) three ( 3 ) business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below : If to Seller: Taproot Acquisition Enterprises, LLC P.O. Box 192135 Miami Beach, Florida 33193 Attention: Jordan Mirch Email: jmirch@williammgt.com If to Purchaser: Athena Bitcoin, Inc. c/o Matias Goldenhorn – CEO & President 1 SE 3 rd Avenue – Ste 2740 Miami, FL 33131 Email: matias@athenabitcoin.com 22. With a copy that shall not constitute notice, to: legal@athenabitcoin.com Severability . If any provision of this Agreement or portion thereof should be declared invalid for any reason, the invalid provision or portion hereof shall be deemed omitted and the remaining terms shall nevertheless be carried into effect. 23. Counterparts . This Agreement may be executed in one or more counterparts (including by means of facsimile or electronic PDF copy), each of which shall be deemed an original but all of which together shall constitute one and the same instrument . 24. Further Assurances . The Parties hereto shall execute such further documents, and perform such further acts, as may be necessary to, transfer and convey the Equipment to Purchaser, on the terms herein contained, and to otherwise comply with the terms of this Agreement and consummate the transactions contemplated hereby . Seller has entered into certain merchant agreements for the placement of Units at merchant locations that have been sold to Purchaser and the Parties desire to have such merchant agreements assigned to Purchaser . The Parties agree to work in good faith to have such merchant agreements assigned to Purchaser . 25. Entire Agreement . This Agreement (including the documents and exhibits referred to herein) constitutes the entire agreement between the Parties and supersedes any and all prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof including, but not limited to the Prior Purchase Agreements 26. Interpretation . The headings of Articles and Sections in this Agreement are provided for convenience of reference only and will not affect the meaning of this Agreement . All Schedules and Exhibits to this Agreement are incorporated by reference . All words used in this Agreement will be construed to be of such gender or number as the circumstances require . Unless otherwise expressly provided, the words “include,” “includes” and “including” shall be interpreted to mean “including without limitation . ” A reference to a document, law, code, contract, agreement, or this Agreement, includes a reference to that document, code, contract, or agreement as periodically amended, supplemented, replaced, or restated . The Parties shall act 11 Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
iv . will promptly notify the Disclosing Party if it becomes aware of any use, disclosure of or unauthorized written, verbal or visual access to any of the Confidential Information of Disclosing Party in violation of this Agreement . b . If the Receiving Party is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, the Receiving Party shall provide : (i) written notice of such requirement to the Disclosing Party within five business days so the Disclosing Party may seek, at its sole cost, a protective order or other remedy or waive compliance with the confidentiality provisions of this Agreement ; and (ii) reasonable assistance, at the Disclosing Party’s sole cost, in opposing such disclosure or seeking a protective order or other limitations 12 reasonably and in accordance with the principles of good faith and fair dealing in the performance of this Agreement. 27. Confidentiality . “Confidential Information” means all, or any part of, and originals or copies of, any information (technical and non - technical), documents, data, records, computer programs, software, inventions, discoveries, designs, promotional ideas, customer information, financial information, practices, processes, methods, techniques, trade secrets, products, the terms of any proposed agreement between the Parties, and/or research (in each case, in any form or media, whether electronic, paper or oral) received by the Receiving Party from the Disclosing Party or its representatives, which is so designated either in writing or by oral communication . Confidential Information shall be deemed to include all notes, analyses, compilations, and other material prepared by the Receiving Party containing any Confidential Information . Confidential Information shall not include information that : (i) is now or becomes publicly available through no breach on the part of the Receiving Party or another person’s confidentiality obligations ; (ii) the Receiving Party can demonstrate it had lawfully in its possession prior to disclosure without any obligation of confidentiality ; (iii) is independently developed by the Receiving Party without access to or the use of any Confidential Information of the Disclosing Party as evidenced by written documentation ; or (iv) the Receiving Party lawfully obtains from a third party who has the right to transfer and disclose it . a. The party that receives Confidential Information (the “ Receiving Party ”) of the Disclosing Party: i. will not disclose or otherwise make available such Confidential Information to any third party, whether by written, verbal or visual means, without the Disclosing Party’s prior written consent ; however, the Receiving Party may disclose the Confidential Information to its officers, employees, consultants, legal advisors, market advisors, trustees, and any others who have a “need to know,” who have been apprised of this restriction, and who are themselves bound by nondisclosure obligations at least as restrictive as those set forth in this Section ; ii. will hold the Confidential Information in confidence and use the same degree of care it uses to keep its own similar information confidential, but in no event shall it use less than a reasonable degree of care ; iii. use such Confidential Information only to perform its obligations or exercise of its rights or remedies under the Agreement; and Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
13 on disclosure . After providing such notice and assistance, if the Receiving Party remains required by law to disclose any Confidential Information, the Receiving Party shall disclose no more than that portion of the Confidential Information which, on the advice of the Receiving Party’s legal counsel, the Receiving Party is legally required to disclose and, upon the Disclosing Party’s request, shall use commercially reasonable efforts to obtain assurances from the applicable court or agency that such Confidential Information will be afforded confidential treatment . c. Nothing in this Agreement shall prevent either Party from using any general methodologies or know - how known by such Party prior to the Disclosing Party’s disclosures under this Agreement and that are contained in the unaided memory of such Party’s personnel provided that in doing so it is not in breach of its obligations of confidentiality under this Section . d. The provisions of this Section 27 shall survive the term of this Agreement and shall continue through the term of the Processing Agreement, except in the case of Confidential Information that is a trade secrets within the meaning of applicable law, which shall survive for so long as such Confidential Information remains a trade secret . e. The Receiving Party shall be responsible for any breach of this Section 27 caused by any of its representatives . On the expiration of this Agreement, the Receiving Party shall, promptly return or destroy all Confidential Information and copies thereof that it has received under this Agreement . f. No Trading . The Recipient acknowledges and is aware of the restrictions imposed by the United States Federal Securities Laws and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company . The Receiver hereby agrees that, while in possession of such material nonpublic information, it shall not purchase or sell any publicly traded securities of Athena Bitcoin Global, communicate such information to any third party, take any other action with respect to Athena Bitcoin Global, in violation of such Laws, or cause or encourage any third party to do any of the foregoing . This Agreement and the Parties’ obligations hereunder shall terminate and be of no further force or effect at the conclusion of the Term, subject to the securities law, as may be applicable . g. The Parties acknowledge and agree that any violation of this Section 27 will cause substantial and irreparable injury to the Disclosing Party and that money damages as a remedy at law for any breach of the provisions of this Section 27 will be inadequate . 28. Taxes . All transfer, documentary, sales, use, stamp, registration and other such taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement shall be borne by the responsible Party . 29. Costs and Attorney’s Fees . In the event either Party brings an action to enforce the terms of this Agreement, the non - prevailing Party in such action shall pay to the prevailing Party the prevailing Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
14 Party’s costs and expenses, including reasonable attorneys’ fees, incurred in connection with such enforcement action. [SIGNATURE PAGE TO FOLLOW] Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. SELLER: Taproot Acquisition Enterprises, LLC By: Name: Jordan Mirch Title: Manager PURCHASER: Athena Bitcoin, Inc. By: Name: Matias Goldenhorn Title: CEO & President Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
Schedule A Equipment Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
152626 152010 152070 151954 151896 151845 151788 151580 152627 152012 152071 151955 151897 151846 151790 151581 152631 152013 152074 151958 151898 151848 151792 151582 152632 152014 152075 151959 151900 151849 151794 151583 152633 152015 152077 151960 151901 151850 151795 151590 152635 152016 152078 151961 151902 151852 151796 151592 152637 152017 152079 151962 151903 151853 151797 151595 152638 152018 152080 151963 151904 151854 151799 151614 152639 152019 152081 151965 151905 151855 151801 151615 156119 152020 152083 151966 151907 151856 151802 151616 156134 152021 152085 151968 151909 151857 151803 151617 156474 152023 152086 151969 151910 151858 151804 151618 156475 152024 152099 151970 151911 151859 151805 151619 156476 152025 152573 151971 151912 151860 151808 151620 156478 152027 152574 151972 151913 151861 151809 151636 156479 152028 152575 151973 151914 151862 151810 151655 156480 152029 152576 151975 151916 151863 151811 151661 156481 152030 152577 151976 151917 151864 151812 151662 156482 152032 152580 151977 151918 151865 151813 151663 156483 152034 152581 151978 151919 151866 151814 151670 156492 152036 152583 151980 151920 151867 151816 151671 156494 152037 152586 151981 151924 151869 151820 151676 156498 152039 152587 151982 151926 151870 151821 151677 KI - 10001 152042 152589 151983 151927 151872 151822 151678 KI - 10002 152044 152591 151984 151928 151873 151823 151682 KI - 10009 152045 152592 151985 151930 151875 151824 151687 KI - 10010 152047 152595 151986 151931 151876 151825 151689 KI - 10014 152048 152597 151987 151932 151877 151827 151691 KI - 10015 152049 152598 151990 151933 151878 151829 151692 KI - 10018 152050 152600 151992 151934 151879 151830 151695 KI - 10022 152051 152601 151993 151936 151880 151831 151696 KI - 10023 152052 152602 151994 151938 151883 151832 151698 KI - 10028 152053 152603 151996 151939 151884 151833 151729 KI - 10029 152054 152604 151997 151940 151885 151834 151730 KI - 10030 152056 152605 151998 151941 151886 151835 151731 KI - 99999 152057 152606 151999 151942 151888 151836 151734 TYKA000047 152059 152608 152000 151943 151889 15
Exhibit B Assignment and Assumption Agreement of Merchant Agreements ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “ Assignment ”) is made and entered into as of , 2024 (the “ Effective Date ”), by and between Taproot Acquisition Enterprises, LLC (“ Assignor ”) and Athena Bitcoin, Inc . (collectively, “ Assignee ”) . RECITALS A. Pursuant to the Equipment Financing Agreement dated October , 2024 , by and between Assignor and Assignee (collectively, the “ Agreement ”), Assignor has conveyed to Assignee Bitcoin ATM Kiosks which are currently installed and operational (the “ Property ”) . B. The Property is subject to those merchant agreements identified on Appendix A attached hereto (the “ Leases ”) . C. Pursuant to the Agreement and in connection with the conveyance of the Property, Assignor has agreed to assign to Assignee all of Assignor's right, title, and interest in and to the Leases as landlord, and Assignee has agreed to assume and perform all of Assignor's liabilities and obligations arising under the Leases on and after the Effective Date . ASSIGNMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows : As of the Effective Date, Assignor hereby assigns, transfers, and conveys to Assignee all of Assignor's right, title, and interest in and to the Leases as landlord . Assignor shall indemnify, defend with counsel reasonably acceptable to Assignee, and hold Assignee harmless from any claim, liability, cost, or expense (including, without limitation, reasonable attorneys' fees) arising out of any obligation related to such this Assignment . Assignee hereby assumes all liabilities and obligations of Assignor under the Leases, and agrees to perform all such obligations that are to be performed or that become due on or after the Effective Date . This Assignment shall be binding upon and inure to the benefit of Assignor, Assignee, and their respective successors and assigns . This Assignment shall be governed and construed in accordance with the laws of the State of Florida, without reference to conflict of laws principles . This Assignment may be executed in separate counterparts which, when taken together, shall constitute one document . [Signatures on the following page] Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
e: na Bitcoin, Inc. Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922 IN WITNESS WHEREOF, the parties have executed this Assignment as of the Effective Date. ASSIGNOR: Taproot Acquisition Enterprises, LLC By: Nam Jordan Mirch Title: Ceo ASSIGNEE: Athe By: Name: Matias Goldenhörn Title: CEO
AppendixA Merchant Agreements (attached) Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3402042.1 AMENDMENT TO OMNIBUS AGREEMENT This Amendment (the “Amendment”) to that certain Omnibus Equipment Refinancing Agreement dated September 19 , 2024 , by and between Taproot Acquisition Enterprises, LLC (“Seller”) and Athena Bitcoin, Inc . (“ Purchaser ”) (the “Agreement”) is entered into as of October 30 , 2024 (the “Effective Date”) by and between Taproot Acquisition Enterprises, LLC and Athena Bitcoin, Inc . Purchaser and Seller are sometimes referred to herein as the Party or Parties . RECITALS: WHEREAS, on September 19 , 2024 , the Parties entered into the Agreement to refinance and consolidate Purchaser’s payment obligations under three different financing agreements into one agreement and payment schedule . WHEREAS, the Agreement included a Schedule A, which was intended to reflect the serial numbers for the Equipment that had been sold by Seller to Purchaser that was subject to the Agreement. WHEREAS, Schedule A contained errors and did not include the correct serial numbers for some of the Equipment subject to the Agreement. WHEREAS, the Parties desire to replace Schedule A to the Agreement with a new Schedule A to reflect the correct serial numbers for the Equipment. AGREEMENT: NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchase agree to the following: 1. Schedule A . Schedule A to the Agreement is hereby substituted with the Schedule A attached hereto as if it was attached to the Agreement. 2. Miscellaneous . a. The Agreement and all of the documents, instruments and materials executed and delivered heretofore or hereafter pursuant to the Agreement are deemed hereby to be amended so that any reference therein to the Agreement shall be a reference to such document as amended by this Amendment . b. Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect . c. This Amendment may be executed simultaneously in any number of counterparts, each of which will be deemed an original but all of which will together constitute Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3402042.1 one and the same agreement. This Amendment may be delivered by fax or .pdf file. d. Capitalized terms used herein but not defined herein shall have the meaning ascribed to such terms in the Agreement. [ signature page follows ] Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
PFS:009730.0005.3402042.1 IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. SELLER: Taproot Acquisition Enterprises, LLC By: Name: Jordan Mirch Title: Manager PURCHASER Athena Bitcoin, Inc. By: Name: Matias Goldenhorn Title: CEO & President Docusign Envelope ID: B6A1F75B - DCF8 - 45E5 - BDEE - 6283E02BD922
Exhibit 10.65
 |
ATHENA BITCOIN |
August 15, 2023
Carlos Carreno
5320 LaGorce Dr.
33139 Miami Beach, FL
Dear Carlos,
We believe you have what it takes to accompany us on our journey to bring bitcoin ATM and related Fintech services to the world and it is my pleasure to extend you an offer to join our leadership team as Chief of Staff. This position will report to the Chief Executive Officer. Your tentative start date is August 15th, 2023.
Regarding your compensation, regular pay dates are semi-monthly, on the 15th and last day of each month. The details of your compensation are as follows:
| · | Full-time, exempt, salaried position - on site in Miami, FL | |
| · | $230,000 annual base salary | |
| · | Discretionary yearly bonus potential, | |
| · | Health and dental insurance benefits - eligibility effective the first of the month following your date of hire. Employee premiums are currently paid for by the company at 100%, | |
| · | Flexible Personal Time Off-average employee usage is 3 weeks per year, | |
| · | Eligibility for Incentive for 5 million ABIT Stock Options at senior leadership level on the common stock of Athena Bitcoin Global when and if such an equity incentive plan is offered and duly authorized, |
Bonus Eligibility: You will be eligible to receive a target discretionary yearly bonus, based on the Company's performance and your individual performance. Whether Athena awards bonuses for any given year, the allocation of the bonuses for Company and individual performance, and the amounts of such bonuses, if awarded, will be in the sole discretion of the Company as determined by its Board of Directors (the "Board"). If the Board approves payment of bonuses for any given year, the bonus amounts generally will be determined and paid within the first pay period of the year based on the prior year's performance. You must be employed on the date the bonus is scheduled to be paid in order to receive the bonus payment. If your employment terminates for any reason prior to the payment of the bonus, then you will not have earned the bonus and will not receive any portion of it.
Athena Bitcoin Global 1332 N Halsted St, Ste 403 Chicago, IL 60642 www.athenabitcoin.com |
Athena Bitcoin, Inc. 312-690-4466 info@athenabitcoin.com |
|
ATHENA BITCOIN |
Please note that this employment offer is contingent on your satisfactory completion of all onboarding documents and agreements (including but not limited to non-compete, NDA, Non Trading, among others) as well as completing and passing all reference, background, education, and employment screens, checks and processes.
By signing below, you are certifying that you have not entered into any agreements with your previous employer that would in any way restrict the activities required to perform your job with Athena. In addition, please note that if you possess any confidential or proprietary information regarding your previous employer, we insist that you do not disclose or use such information in connection with your Athena employment.
Should you choose to accept this offer, please understand that your employment is at-will, meaning that you have the right to end your employment with us at any time, for any reason or no reason, with or without cause or advance notice - and, of course, Athena has that same right. In addition, please note that, from time to time, Athena may need to change your assignments, positions, and compensation levels to meet changing business needs and conditions.
Upon acceptance of this offer, you will receive your new hire paperwork via your email address.
We look forward to the potential of you joining the leadership team at Athena and we'll be behind you each step of the way. Please contact me if you have any questions.
Sincerely,
/s/ Matias Goldenhorn
Matias Goldenhorn
Chief Executive Officer
I, Carlos Carreño, have read and understood the provisions of this offer of employment, and I accept the above conditional job offer. I understand that my employment with Athena Bitcoin is considered at will, meaning that either the company or I may terminate this employment relationship at any time without cause or notice.
| Signature: /s/ Carlos Carreño | Date: 08/15/23 |
Athena Bitcoin Global 1332 N Halsted St, Ste 403 Chicago, IL 60642 www.athenabitcoin.com |
Athena Bitcoin, Inc. 312-690-4466 info@athenabitcoin.com |
| 2 |
Exhibit 10.66
12/11/2024
Omar Jimenez
omarjimenez@hotmail.com
Dear Omar,
It is my pleasure to extend to you an offer to join our team as Chief Financial Officer at Athena Bitcoin. In addition to your role as CFO, we are pleased to invite you to join the Athena Bitcoin Global Board of Directors. Your skills and experience will be a valuable asset to our team, and we are excited for you to join our company.
Position Details
| · | Job Title: Chief financial Officer | |
| · | Reporting To: Matias Goldenhörn CEO | |
| · | Start Date: 1/15/2025 | |
| · | Location: Miami, FL – On-Site | |
| · | Classification: Exempt |
Compensation
| · | Base Salary: Your starting annual base salary will be $300,000.00 Annually, paid semi-monthly on the 15th and last day of each month, subject to required tax withholdings and deductions. | |
| Bonus Eligibility: You are eligible to receive a discretionary bonus based on two primary factors: the overall performance of the Company and your individual performance as assessed by the Company. Any bonus awarded is determined solely at the Company’s discretion and is not guaranteed. The terms, conditions, and payment of such bonuses will be communicated by the Company and are subject to applicable taxes and deductions - 50% of Base. | ||
| · | Equity: As part of your compensation, you will be granted 10 million options of common stock under the company’s equity compensation plan, subject to the following terms: | |
| · | Vesting Schedule: | |
| Your options will vest in equal annual installments over three years from your start date, provided you remain employed with the Company. |
| 1 |
| · | Strike Price: | |
| The strike price for your options will be equal to the fair market value of the Company’s stock as determined on the grant date, TBD days after the Company’s S-1 registration statement becomes effective. | ||
| · | Exercise Period: | |
You may exercise vested options while employed with the Company. If your employment ends, you will have 90 days to exercise any vested options. | ||
| Unvested options will be forfeited. | ||
| Details about your grant will be outlined in the Company’s equity compensation plan, which you will receive upon grant issuance. |
At Athena Bitcoin, we are committed to offering a comprehensive benefits package that supports the well-being of our employees. You will be eligible for the following benefits:
| · | Paid Time Off (PTO): You will receive flexible paid time off, allowing you to take time as needed limit of 4 weeks, subject to manager approval and company needs. This policy ensures a healthy work-life balance. | |
| · | Paid Holidays: Athena Bitcoin offers 11 paid holidays annually, aligning with standard banking holidays. | |
| · | Health and Wellness Benefits: We provide fully paid medical, dental, and vision insurance for you as an employee. You can also add dependents at an additional cost, and we will provide details regarding dependent coverage upon your start. | |
| · | Life Insurance: We offer company-paid life insurance at no cost to you, which includes basic coverage. | |
| · | Retirement Plan: You will be eligible to participate in our 401(k) plan, which includes a company match of up to 3%, enabling you to build retirement savings with company support. |
| 2 |
Additional Conditions
This offer is contingent upon the successful completion of a background check, which will be conducted through our third-party provider. Please provide the necessary documentation as soon as possible so we can expedite this process.
Additionally, as a condition of employment, you will be required to sign a Non-Compete Agreement and a Non-Solicitation Agreement. These documents will outline the restrictions on certain activities during and after your employment with Athena Bitcoin, ensuring the protection of company interests.
Disclosure of Existing Agreements
To ensure compliance with your new role, we ask that you inform us if you are currently bound by any Non-Compete or Non-Solicitation Agreements with any previous employers. Please provide a copy of any such agreements, if applicable, so that we can assess any potential conflicts with your employment at Athena Bitcoin.
Employment at Will
Please note that your employment with Athena Bitcoin is at-will, meaning either you or the company may terminate the employment relationship at any time, with or without cause or notice, subject to applicable laws. This letter does not constitute a contract for employment for any specific period.
We are confident that you will make a significant impact on our team, and we look forward to welcoming you aboard! To confirm your acceptance of this offer, please sign and return this letter by December 13, 2024.
If you have any questions or need further clarification, feel free to reach out. We are excited about the opportunity to work together!
Warm regards,
Barbara Gomez
Human Resource Director
Athena Bitcoin
Acknowledgment of Offer
I, Omar Jimenez accept the offer of employment from Athena Bitcoin as outlined in this letter. I understand that my employment is at-will and that nothing in this letter alters the at-will employment relationship. I also confirm that I have disclosed any existing Non-Compete or Non-Solicitation Agreements with previous employers.
Signature: /s/ Omar Jimenez
Date: December 13, 2024
| 3 |
Exhibit 21.1
Athena Bitcoin Global
List of subsidiaries*
Athena Bitcoin Global (the “Company”) has the following subsidiaries as of December 31, 2025:
Athena Bitcoin, Inc., a Delaware corporation, which is wholly-owned (“Athena Bitcoin”).
Our wholly-owned subsidiaries located outside of the United States are:
| · | Athena Holdings El Salvador S.A. de C.V., incorporated in El Salvador (99% owned by Athena Bitcoin); | |
| · | Athena Holdings Colombia SAS, incorporated in Colombia (95% owned by Athena Bitcoin); | |
| · | Athena Holding Company S.R.L, incorporated in Argentina (Athena Bitcoin beneficially owns and controls Athena Holding Company SRL which is nominally owned by Eric Gravengaard 45%, Gilbert Valentine 45%, and Matias Goldenhörn 10%); | |
| · | Athena Bitcoin S. de C.V., incorporated in Mexico (“Athena SV”)(99% owned by Athena Bitcoin); | |
| · | Athena Holdings of PR LLC, incorporated in Puerto Rico (99% owned by Athena Bitcoin); and | |
| · | Athena Business Holdings Panama S.A., a dormant company, incorporated in Panama (99% owned by Athena Bitcoin). |
* Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other subsidiaries of Athena Bitcoin Global. are omitted because, considered in the aggregate, they would not constitute a significant subsidiary as of the end of the year covered by this report. Inclusion in this list is not, however, a representation that the listed subsidiary is a “significant subsidiary.” The list above is as of March 6, 2026.
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matias Goldenhörn, certify that:
1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2025 of Athena Bitcoin Global (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 6, 2026
| By: /s/Matias Goldenhörn | |
| Matias Goldenhörn | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Omar Jimenez, certify that:
1. I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2025 of Athena Bitcoin Global (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 6, 2026
| By:/s/ Omar Jimenez | |
| Omar Jimenez | |
| Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Matias Goldenhörn, hereby certify, that, to my knowledge:
1. The Annual Report on Form 10-K for the period ended December 31, 2025 (the “Report”) of Athena Bitcoin Global (the “Company”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Date: March 6, 2026
| By: | /s/ Matias Goldenhörn | |
| Matias Goldenhörn | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Omar Jimenez, hereby certify, that, to my knowledge:
1. The Annual Report on Form 10-K for the period ended December 31, 2025 (the “Report”) of Athena Bitcoin Global (the “Company”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Date: March 6, 2026
| By: | /s/ Omar Jimenez | |
| Omar Jimenez | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |