AIB Data Centers Inc S-1, filed Jun 2, 2026
AIB Data Centers Inc. (AIB)
Registration No. 333-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Exact name of Registrant as specified in its charter)
| 3841 | 39-2631241 | |||
| (State
or other jurisdiction of incorporation or organization) |
(Primary
Standard Industrial Classification Code Number) |
(I.R.S.
Employer Identification Number) |
1540 Broadway, Ste. 1010
New York, NY 10036
Telephone: 646-493-2993
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Jerry Tang
Chief Executive Officer and President
1540 Broadway, Ste. 1010
New York, NY 10036
(646) 493-2993
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| Mitchell Nussbaum, Esq. Tahra Wright, Esq. Loeb & Loeb LLP 345 Park Avenue New York, NY 10154 (212) 407-4000 |
Robert Charron, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 (212) 370-1300 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 7(a)(2)(B) of the Securities Act.
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED JUNE 2, 2026 |
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
Up to 16,620,498 Shares of Common Stock
Pre-funded Warrants to purchase up to 16,620,498 Shares of Common Stock
Up to 16,620,498 Shares of Common Stock Underlying such Pre-funded Warrants
This is a firm commitment public offering (the “Offering”) of up $60,000,000, or 16,620,498 shares of common stock, par value $0.0001 per share (“common stock” or “Common Stock”) of BlockchAIn Digital Infrastructure, Inc. based upon an assumed public offering price of $3.61 per share (the last reported sale price per share of our common stock on the NYSE American LLC (the “NYSE American”) on May 28, 2026).
We are also offering to those purchasers, if any, whose purchase of shares of common stock in this Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of such purchaser, 9.99%) of our outstanding shares of common stock immediately following the consummation of this Offering, the opportunity to purchase, if the purchaser so chooses, pre-funded warrants, (the “Pre-funded Warrants”), in lieu of shares of common stock that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of such purchaser, 9.99%) of our outstanding shares of common stock. Each Pre-funded Warrant will be immediately exercisable for one share of common stock and may be exercised at any time until all of the Pre-funded Warrants are exercised in full. The purchase price of each Pre-funded Warrant will equal the price per share at which the shares of our common stock are being sold to the public in this Offering, minus $0.0001, and the exercise price of each Pre-funded Warrant will be $0.0001 per share. For each Pre-funded Warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. This Offering also includes the shares of common stock issuable upon exercise of the Pre-funded Warrants.
Our common stock is listed on the NYSE American under the symbol “AIB.” On May 28, 2026, the last reported sale price of our common stock was $3.61 per share. The actual public offering price per share of common stock sold in this Offering will be determined between us and the representative of the underwriters based on market conditions at the time of pricing and may be at a discount to the current market price. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final public offering price. The securities in this Offering will be offered at a fixed price and are expected to be issued in a single closing. In addition, there is no established public trading market for the Pre-funded Warrants and we do not expect a market to develop. We do not intend to apply for a listing of the Pre-funded Warrants on any national securities exchange or other nationally recognized trading system.
You should read this prospectus and any prospectus supplement, together with additional information described under “Where You Can Find More Information,” carefully before you invest in any of our securities.
We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012, and as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Risk Factors – As an emerging growth company, BlockchAIn cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make BlockchAIn common stock less attractive to investors.”
Investing in our securities is speculative and involves a high degree of risk. You should carefully consider the risk factors beginning on page 9 of this prospectus before purchasing our securities.
| Per Share | Total | |||
| Public offering price | $ | $ | ||
| Underwriting discounts and commissions (6.0%)(1) | $ | $ | ||
| Proceeds to us, before expenses | $ | $ |
| (1) | We have agreed to issue the representative of the underwriters, at the closing of this offering, common stock purchase warrants (“Representative Warrants”) to purchase the number of shares of common stock equal to 4% of the aggregate number of shares of common stock and Pre-funded Warrants sold in this offering, including any shares sold upon exercise of the underwriters’ option. In addition, we have agreed to reimburse the representative for certain expenses in connection with this offering. See “Underwriting.” |
We have granted the underwriters a 45-day option to purchase up to an aggregate of 2,493,074 shares of our common stock (equal to 15% of the number of shares of common stock and/or Pre-funded Warrants sold in this offering) to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be approximately $4,140,000 and the total proceeds to us, before expenses, will be approximately $___.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the securities against payment on or about June , 2026, subject to the satisfaction of customary closing conditions.
Lucid Capital Markets
The date of this prospectus is June , 2026.
TABLE OF CONTENTS
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-1 that we filed with the U.S. Securities and Exchange Commission (the “SEC”). You should carefully read this prospectus and any prospectus supplement, as well as additional information described under “Where You Can Find More Information,” before deciding to invest in our securities.
We have not, and the underwriters have not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of its time of delivery or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.
The information provided in this prospectus contains statistical data and estimates, including those relating to market size and competitive position of the markets in which we participate, that we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions have been verified by any independent source.
For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the United States.
We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos and website names. This prospectus may contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this prospectus are listed without their ©, ® and ™symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus may constitute “forward-looking statements” for purposes of federal securities laws. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements appear in a number of places in this registration statement including, without limitation, in the sections of this registration statement titled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “contemplate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “will,” “would” and other similar words and expressions (including the negative of any of the foregoing), but the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements are based on information available as of the date of this prospectus and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of the Company and our directors, officers and affiliates. There can be no assurance that future developments will be those that have been anticipated. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date.
These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Risk Factors,” our periodic filings with the SEC and the following:
| ● | the expected benefits of and potential value created by the Business Combination for the Signing Day Sports Stockholders and the One Blockchain Securityholders; |
| ● | the ability to maintain the listing of BlockchAIn’s securities on the NYSE American following the Business Combination; |
| ● | the price and volatility of Bitcoin, ETH and other cryptocurrencies; |
| ● | our ability to begin or complete any project that is “in the pipeline,” contracted or negotiated but not yet under active construction; |
| ● | our ability to make effective judgments regarding pricing strategy and resource allocation; |
| ● | our ability to control electricity costs; |
| ● | the risk that one or more of our customers may experience financial distress or bankruptcy, which could result in reduced revenue, uncollectible accounts receivable, or disruptions to our operations; |
| ● | regulatory changes or actions that may restrict the use of cryptocurrencies or the operation of cryptocurrency networks in a manner that may require our customers or tenants to cease certain or all operations; |
| ● | the risks to our business of earthquakes, fires, floods, and other natural catastrophic events and interruptions by man-made issues such as strikes and terrorist attacks; |
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| ● | unexpected costs or expenses to our business; |
| ● | our expectations regarding our cash runway or use of its cash; and |
| ● | general economic and business conditions in our market. |
You should refer to “Risk Factors” on page 9 of this prospectus for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of the risks, uncertainties and assumptions described under “Risk Factors” and elsewhere, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur.
Should one or more of these risks or uncertainties materialize or should any of the assumptions made by our management proves incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
All subsequent written and oral forward-looking statements addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.
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PROSPECTUS SUMMARY
This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in this registration statement. Before you decide whether to purchase our securities, you should read this entire prospectus carefully, including the sections of this prospectus titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. You should also carefully read the information in this prospectus, including our financial statements, and the exhibits to the registration statement of which this prospectus is a part.
The Company
Through One Blockchain, our primary operating subsidiary, we develop, own and operate digital infrastructure dedicated to AI hosting and high-performance computing optimized colocation data center capacity. Our operations are currently centered around our existing 65 MW data center facility, which we refer to as CLT-01.
As part of our planned transition and expansion, we are developing a modular deployment architecture intended to convert existing powered land and brownfield sites, including digital-asset-mining facilities, into AI/HPC-grade colocation facilities. To support this approach, we secure executed utility commitments before committing capital to vertical construction. Our facilities are designed for liquid-cooled, high-density AI compute workloads, with rack densities of up to 150 kilowatts and N+1 mechanical and electrical redundancy. We operate on an “owner-agnostic” platform: our tenants supply their own graphics processing units (GPUs) and other compute hardware, and we provide the underlying real estate, power, cooling, and connectivity infrastructure under long-term leases. We believe this structure aligns our cash flows with the duration of AI infrastructure demand without exposing us to the residual-value or technology-obsolescence risks associated with hardware ownership.
As of May 2026, our portfolio consists of:
| ● | Approximately 65 MW of energized utility load at our CLT-01 campus; |
| ● | Approximately 25 MW of additional capacity in active development or interconnection; and |
| ● | An identified development pipeline of approximately 485 MW across four sites. |
Active Commercial Dialogue with Prospective Tenants.
We are continuously seeking new tenants and currently have ongoing commercial dialogue with multiple prospective tenants across the following categories: (i) GPU cloud platforms; (ii) Bare-metal GPU marketplaces; (iii) AI cloud infrastructure operators; (iv) AI silicon and hosted-inference platforms; and (v) Sovereign AI infrastructure programs.
As of the date of this prospectus, other than one non-binding letter of intent with a data infrastructure tenant for an additional 5 MW at CLT-01, we have negotiated and exchanged draft lease agreements with a global cloud provider covering 26 MW utility load (20 MW IT load) of data center capacity at CLT-01. Finalizing and executing this lease is subject to the provider securing an end-user for the lease, which may take several weeks. As a result, we have commenced preliminary negotiations with other prospective tenants and have exchanged drafts of lease agreements. We anticipate that the lease, or a materially similar lease with other prospective tenant or tenants, could potentially be executed within the next 90 days. However, execution of any lease remains subject to continued negotiation, technical and commercial diligence, site and power availability review, legal documentation, credit review, financing considerations, internal approvals and other customary conditions. There can be no assurance that any definitive lease will be executed within such timeframe, or at all, or that any definitive lease, if executed, will be for the capacity, duration or economic terms currently under discussion.
Industry and Market Opportunity
The global data center industry has experienced sustained growth over the past decade as enterprises increasingly rely on digital infrastructure to support cloud computing, data-intensive applications, and the continued growth of internet traffic. Organizations are generating and processing significantly larger volumes of data while simultaneously adopting distributed IT architectures designed to improve scalability, performance and resiliency.
A growing number of organizations are transitioning toward outsourcing their data center requirements to third-party providers in order to reduce capital expenditures, increase operational flexibility, and gain access to specialized infrastructure and connectivity ecosystems. Carrier-neutral multi-tenant data centers (“MTDCs”), which provide colocation space, power, cooling, physical security, and access to multiple network providers and cloud platforms, have become an increasingly important component of global digital infrastructure.
More recently, the rapid adoption of artificial intelligence, machine learning and other high-performance computing workloads has begun to materially increase demand for data center capacity capable of supporting high-density computing environments. These workloads require substantial power availability, advanced cooling systems and highly reliable infrastructure, which has increased the importance of purpose-built facilities designed to support higher power densities.
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Management believes that several long-term industry trends — including enterprise digital transformation, the continued growth of cloud computing, increasing demand for interconnection between digital platforms, and the emergence of AI-driven workloads — are expected to continue driving demand for outsourced data center infrastructure. Management believes the Company’s operational capabilities and infrastructure position it to participate in the growing demand for data center capacity in its markets.
Demand for compute infrastructure capable of supporting AI training and inference workloads has accelerated meaningfully since 2023. Industry data we have reviewed indicates that U.S. data center installed capacity has grown from approximately 10 gigawatts (GW) in 2023 to approximately 15.5 GW in 2025, and that third-party forecasts project growth to approximately 95 GW by 2030. According to JLL's North America Data Center Report (Year-End 2025) and Goldman Sachs Research (2026), data center power demand is projected to grow at a 21% compound annual growth rate, with the sector expected to account for approximately 11% of total U.S. grid consumption by 2030 and requiring an estimated $720 billion in grid infrastructure investment to support that demand. Hyperscale cloud providers have collectively committed in excess of $1 trillion in data center capital expenditure through 2028, reflecting the scale of enterprise demand for AI-ready compute infrastructure that purpose-built colocation operators like AIB are positioned to serve.
We believe this growth has materially outpaced incremental electric grid capacity additions, which have grown at an estimated 2% to 3% annually, and that primary U.S. interconnection queues now exhibit average wait times of five to six years.
Industry vacancy in North American data center markets is currently estimated at approximately 1%, and prices for “powered-land” parcels (i.e., land with executed power-delivery commitments) have risen meaningfully in recent quarters. We believe that the combination of accelerating demand for AI-suitable compute, slow incremental grid capacity additions, and the cost and timeline to procure new utility interconnection has created a structural undersupply of large-format, AI-ready colocation capacity in the United States.
Our Competitive Strengths
We believe the following competitive strengths position us to capture value from these market dynamics:
| ● | Contracted utility power as a development gate. We pursue executed utility ESAs or comparable binding power commitments prior to commencing vertical construction. We believe this discipline reduces the principal source of execution delay in our industry. |
| ● | Repurposing of existing energized infrastructure. Our anchor CLT-01 site has been previously operated as a 40 MW digital-asset-mining facility and is grid-interconnected, zoned for industrial/ data center use, and equipped with carrier-neutral connectivity. We believe the conversion of existing powered land into AI/HPC colocation capacity offers materially faster time-to-energization than greenfield development. |
| ● | AI-optimized facility design. Our facilities are designed for rack densities of up to 150 kW, liquid cooling, N+1 redundancy, and a target annualized power usage effectiveness (PUE) of approximately 1.3. We believe these specifications align with the requirements of current-generation AI training workloads. |
| ● | Owner-agnostic operating model. Our tenants supply their own GPU and compute hardware under long-term leases. We do not own, finance, or operate GPUs, and we do not assume technology-obsolescence or residual-value risk associated with hardware. |
| ● | Modular construction approach. Our facilities are designed in standardized 10 MW data-hall modules, which allows phased deployment, parallel civil work, and pre-engineered equipment procurement. We target a 9-to-12-month delivery cycle per module against an industry baseline of 18 months or longer for traditional builds, although we cannot assure that any particular project will meet these timelines. |
| ● | Supply chain pre-positioning. We secure long-lead electrical equipment—including transformers and generators—under letters of intent at site selection and have eight key vendor relationships in place. We believe these arrangements mitigate procurement risk for time-critical components. |
| ● | Experienced management team. Members of our management team have prior operating experience in data center construction, hyperscale infrastructure leasing, capital markets, and tax-advantaged real estate structures. See “Management”.. |
Recent Developments
The following developments have occurred since the beginning of 2026 and are described elsewhere in this prospectus:
| ● | Repurposing of our existing facility, referred to as CLT-01. In the first quarter of 2026, we announced the repurposing of our existing energized 40 MW CLT-01 site for AI/HPC colocation use. |
| ● | NYSE American listing. In March 2026, our common stock began trading on the NYSE American under the symbol “AIB.” |
| ● | Electrical Service Agreement (“ESA”) expansion at CLT-01. On May 27, 2026, we executed an amended ESA expanding the utility power capacity available to the CLT-01 site to 65 MW. |
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Business Combination
On May 27, 2025, the Company entered into the Business Combination Agreement with Signing Day Sports, Merger Sub I, Merger Sub II, and One Blockchain, providing for a business combination. Upon the consummation of the Business Combination, Merger Sub I merged with and into Signing Day Sports, with Signing Day Sports surviving as a wholly-owned subsidiary of BlockchAIn, and Merger Sub II merged with and into One Blockchain, with One Blockchain surviving as a wholly-owned subsidiary of BlockchAIn.
On March 16, 2026, the business combination closed (the “Closing”). As a result of the business combination, each outstanding share of Signing Day Sports common stock was exchanged for the right to receive 0.09334 of one (1) registered share of common stock of BlockchAIn, except that if the exchange would otherwise result in a fractional BlockchAIn share being issuable to a Signing Day Sports stockholder, the number of BlockchAIn shares issuable to such stockholder was rounded up to the nearest whole share with respect to that BlockchAIn share (the “Exchange Ratio”). A total of 3,198,511 shares of common stock was issued to the Signing Day Sports stockholders (prior to the rounding adjustments). In addition, each outstanding option to purchase Signing Day Sports common stock or outstanding warrant to purchase Signing Day Sports common stock that had not previously been exercised prior to the Closing was converted into an option or warrant, as applicable, to purchase a number of BlockchAIn shares equal to the number of shares of Signing Day Sports common stock subject to such option or warrant immediately prior to the Closing multiplied by the Exchange Ratio, with the per share exercise price divided by the Exchange Ratio, and each option immediately became fully vested.
As a result of the One Blockchain Merger, the membership interests of One Blockchain (“One Blockchain membership interests”) outstanding prior to the One Blockchain Merger were automatically cancelled, in exchange for the right of the holders thereof to receive the number of BlockchAIn shares equal to (a) the product of (i) the number of fully-diluted shares of Signing Day Sports common stock outstanding immediately prior to the effective time of the Business Combination, not including certain out-of-the-money derivative securities (“SGN Outstanding Shares”), multiplied by (ii) 1/0.085, and multiplied by (iii) the Exchange Ratio, minus (b) the product of (i) the SGN Outstanding Shares multiplied by (ii) the Exchange Ratio (the “One Blockchain Merger Consideration”).
In connection with the Business Combination, on March 16, 2026, Signing Day Sports Stockholders received 3,198,511 shares of common stock (prior to the rounding adjustments) and the securityholders of One Blockchain received 33,225,888 shares of common stock.
The Business Combination Agreement provides for the issuance of earnout shares (the “Earnout Shares”) to the members, as of immediately prior to the Closing, of One Blockchain (collectively, the “One Blockchain Securityholders”), consisting of shares of common stock, if the 2026 EBITDA equals or exceeds $25 million. The Earnout Shares will equal 11.628% of the One Blockchain Merger Consideration, subject to adjustment. One Blockchain Securityholders may receive up to 3,863,460 (subject to adjustment) additional BlockchAIn shares, respectively, if the Earnout Shares are issued. If the conditions for the issuance of the Earnout Shares are met, the Earnout Shares will be issued within ten calendar days following the date on which BlockchAIn files its annual report for its 2026 fiscal year with the SEC.
In addition, at the closing of the Business Combination, BlockchAIn issued to Maxim Group, as the financial advisor to One Blockchain (as the agreed consideration for advisory services provided to One Blockchain) and the designee of Maxim Partners, (i) 1,204,669 shares of common stock equal to 3.5% of the total transaction enterprise value, in accordance with the obligations of One Blockchain under the Advisory Agreement. At such time the Earnout Shares, if any, are issued, a number of shares of common stock equal to 3.5% of the Earnout Shares will be issued at such time. Maxim Group may receive up to 140,126 additional shares of common stock if the Earnout Shares are issued. The number of shares of common stock issued to Maxim Group at the Closing, and if applicable, in connection with the Earnout Shares, will reduce only the equity ownership otherwise allocable to the holders of One Blockchain membership interests.
The transaction terms of the Business Combination provided that following the Closing, Signing Day Sports Stockholders would own 8.5% of the Company, One Blockchain Securityholders would own 88.3% of the Company, and Maxim (or its designees) would own 3.2% of the Company. After the Closing, an additional 17,065 shares of common stock were issued to Signing Day Sports Stockholders due to rounding adjustments as a result of fractional shares outstanding after Closing. To realign the shareholding percentages with those contemplated by the Business Combination transaction documents, the Board of Directors approved the issuance of an additional 177,729 shares of common stock to be issued to legacy One Blockchain securityholders and 6,444 additional shares of common stock to be issued to Maxim. Such shares have not been issued as of the date of this prospectus.
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Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not 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 of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and 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.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance or the application of existing guidance to changes in our business could significantly affect our business, financial condition and results of operations. In addition, we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act, as more fully described in the section of this registration statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Emerging Growth Company.”
We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the sale of our common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenues of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Summary Risk Factors
Risks Related to this Offering
| ● | Investors in this offering will experience immediate and substantial dilution in the net tangible book value per share of their investment. |
| ● | Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment. |
| ● | The Pre-funded Warrants are speculative in nature and there is not expected to be an active trading market for the warrants. |
| ● | Holders of Pre-funded Warrants will have no rights as a common stockholder until they acquire our common stock. |
| ● | This offering may cause the trading price of our common stock to decrease. |
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Risks Related to Ownership of Common Stock
| ● | We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing securities that would dilute your ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our common stock. |
| ● | Future sales of a substantial number of shares of common stock by us or our large stockholders, or dilutive exercises of a substantial number of warrants by our warrant holders could adversely affect the market price of our common stock. |
| ● | If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares. |
| ● | If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding its stock, its stock price and trading volume could decline. |
| ● | We are an emerging growth company and a “smaller reporting company” and the reduced reporting requirements applicable to such companies may make our common stock less attractive to investors. |
| ● | The price of our common stock may be volatile, and you may lose all or part of your investment. |
| ● | There may not be enough liquidity in our securities to enable securityholders to sell their securities. |
| ● | The Company may be deemed a “controlled company” within the meaning of the NYSE American rules and the rules of the SEC. |
| ● | The ongoing requirements of being a public company may strain the Company’s resources and distract management and we will incur substantial costs as a result of being a public company. |
| ● | We do not intend to pay any cash dividends in the foreseeable future. |
Risks Related to Our Business and Operations
| ● | We have generated the majority of our revenue from a small number of customers, including Blue Ridge Digital Mining, which is controlled by Jerry Tang, our Chief Executive Officer, President, and the direct or indirect owner of the majority of the membership interests of the One Blockchain Securityholders, and we are therefore exposed to a number of related risks. |
| ● | Our operational results and growth are heavily dependent on securing and maintaining favorable agreements for power and land, and the failure to do so could adversely impact our business and planned expansions. |
| ● | Our operations are dependent on the performance and reliability of our data center infrastructure and operational technology. |
| ● | We are subject to risks associated with our need for significant and reliable electric power, and the complexities of our power agreements, including true-up adjustments and curtailment requirements, could adversely impact our costs and profitability. |
| ● | Construction, equipment procurement, and commissioning of data center facilities are subject to delays, cost overruns, and supply chain disruptions. |
| ● | We may not be able to finalize or execute definitive lease agreements with prospective tenants, which could adversely affect our financial results, growth prospects, and business strategy. |
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Risks Related to the Digital Infrastructure and HPC Industries
| ● | The digital infrastructure and high-performance computing industries in which One Blockchain operates are characterized by rapidly evolving technology, shifting customer requirements, and increasing demand for power-dense hosting capacity. If One Blockchain fails to adapt its service offerings, maintain competitive pricing, or meet the operational expectations of its customers, it may not be able to attract new customers or retain existing customers, and its business and results of operations may be adversely affected. |
| ● | The development of blockchain technology and cryptocurrency is in its early stage and any adverse development in the cryptocurrency or blockchain market could adversely affect One Blockchain’s business and results of operations. |
| ● | Technological obsolescence of mining equipment could negatively impact our business. |
Risks Related to Our Financial Condition
| ● |
We have a limited operating history operating as an AI/HPC colocation developer. Our historical financial statements primarily reflect the operations of our legacy digital-asset-mining business. |
| ● | We will require significant capital to fund our growth strategy, and failure to obtain necessary financing on favorable terms, or at all, could adversely affect our growth and operations. |
| ● | Our former investment banker may assert rights to participate in, or claim fees from, this offering notwithstanding our position that such rights have been terminated. |
Risks Related to Regulatory Compliance and Other Legal Matters
| ● | We are subject to a highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations. |
| ● | We may be involved in legal and other disputes from time to time arising out of our operations, including disputes with our suppliers, customers or employees. Our vendors and customers are also subject to risks relating to litigation and disputes, which could adversely affect our business or reputation. |
| ● | Digital asset mining activities are energy-intensive, which may restrict the geographic locations of data center hosting facilities and have a negative environmental impact. |
| ● | Future sales of shares by existing stockholders could cause the Company’s stock price to decline. |
Corporate Information
Our principal executive offices are located at 1540 Broadway, Ste. 1010, New York, NY 10036 and our telephone number is 646-493-2993. Our website address is https://oneblockchain.ai/. Any information contained on, or that can be accessed through, our website is not incorporated by reference into, nor is it in any way part of this registration statement and should not be relied upon in connection with making any decision with respect to an investment in our securities. We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC. You may obtain any of the documents filed by us with the SEC at no cost from the SEC’s website at http://www.sec.gov.
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THE OFFERING
| Issuer: | BlockchAIn Digital Infrastructure, Inc. |
| Common Stock offered by us: | 16,620,498 shares of common stock (or 19,113,572 shares of common stock if the representative exercises its option to purchase additional shares in full) based on an assumed public offering price of $3.61 per share (which is the last reported sale price of our common stock on the NYSE American on May 28, 2026). |
| Pre-Funded Warrants | We are also offering Pre-funded Warrants to purchase shares of common stock in lieu of shares of common stock to any purchaser whose purchase of shares of common stock in this Offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the purchaser’s election, 9.99%) of our outstanding shares of common stock immediately following the consummation of this Offering. The purchase price of each Pre-funded Warrant is equal to the price at which each share of common stock is being sold to the public in this Offering, minus $0.0001. Each Pre-funded Warrant will be exercisable for one share of common stock, will have an exercise price of $0.0001 per share, will be immediately exercisable, and will not expire prior to exercise. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the Pre-funded Warrants. For each Pre-funded Warrant that we sell, the number of shares of common stock that we are selling in the Offering will be decreased on a one-for-one basis. |
| This prospectus also relates to the offering of the common stock issuable upon exercise of the Pre-Funded Warrants. See “Description of Securities— Pre-Funded Warrants”. | |
| Public offering price: | $3.61 per share of common stock, which is the assumed public offering price and the closing price of our common stock on the NYSE American on May 28, 2026. |
| Common stock outstanding immediately prior to this offering: | 37,646,133 shares of common stock as of May 28, 2026 |
| Common stock to be outstanding immediately after this offering (1): | 54,266,631 shares (or 56,759,705 shares if the representative exercises its option to purchase additional shares in full) and assumes no sale of Pre-funded Warrants, which, if sold, would reduce the number of shares of common stock that we are offering on a one-for-one basis. |
| Option to Purchase Additional Shares | We have granted a 45-day option to the underwriters to purchase from us, at the public offering price, less the underwriting discounts and commissions, up to 2,493,074 additional shares of common stock solely to cover over-allotments, if any. |
| Use of proceeds: | We expect to receive net proceeds, after deducting the underwriting discounts and commissions and estimated expenses payable by us, of approximately $55.8 million (or approximately $67.6 million if the representative exercises its option to purchase additional shares in full). |
| We currently intend to use the net proceeds from this offering for working capital, capital expenditures relating to growing our business, and general corporate purposes. See “Use of Proceeds.” |
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| Underwriting Compensation: | Upon the closing of this offering, we will pay the underwriter a cash transaction fee equal to 6.0% of the aggregate gross cash proceeds to us from the sale of the securities in the Offering. In addition, we will reimburse the representative for certain out-of-pocket expenses related to the Offering. See “Underwriting.” |
| Representative Warrants Lock-Up |
We will issue to the representative, or its designees, at the closing of this Offering common stock purchase warrants (“Representative Warrants”) to purchase the number of shares of common stock equal to 4% of the aggregate number of shares of common stock and Pre-funded Warrants sold in this Offering, including shares sold upon exercise of the underwriters’ option. The Representative Warrants will be exercisable immediately upon issuance, and from time to time, in whole or in part, and will expire five years from the commencement of sales at an exercise price of $___ per share (110% of the public offering price of the shares of common stock, based on an assumed public offering price of $3.61 per share (which is the last reported sale price of our common stock on the NYSE American on May 28, 2026). The registration statement of which this prospectus is a part also registers the Representative Warrants and the underlying shares of common stock. See “Underwriting.”
We and our officers, directors and holders of 5% of more of our common stock have agreed to not sell, offer, agree to sell, contract to sell, hypothecate, pledge, grant any option to purchase, make any short sale of, or otherwise dispose of or hedge, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for a period of up to 90 days from the close of this Offering, without the prior written consent of the representative. |
| See the section of this prospectus entitled “Underwriting” for additional information. | |
| Trading symbol: | Our Common Stock is listed on the NYSE American under the symbol “AIB.” We do not intend to list the Pre-funded Warrants offered hereunder on any stock exchange. |
| Risk factors: | The securities offered by this prospectus are speculative and involve a high degree of risk. Investors purchasing securities should not purchase the securities unless they can afford the loss of their entire investment. See “Risk Factors” beginning on page 9. |
| (1) | The number of shares of common stock to be outstanding following this Offering is based on 37,646,133 shares of common stock outstanding as of May 28, 2026, and excludes: |
| ● | 4,003,586 shares of common stock, in the aggregate (subject to adjustment) issuable only upon achievement of the EBITDA milestone for the fiscal year ended December 31, 2026, in connection with the earn-out provisions set forth in the Business Combination Agreement; |
| ● | 184,173 shares of common stock, in the aggregate, issuable to One Blockchain security holders and Maxim; |
| ● | 7,526,299 shares of common stock and available for grant and issuance under our Equity Incentive Plan; |
| ● | 566 shares of common stock issuable upon the exercise of options assumed from Signing Day Sports in connection with the Business Combination; and |
| ● | 1,904 shares of common stock issuable upon the exercise of warrants assumed from Signing Day Sports in connection with the Business Combination. |
Unless otherwise indicated, this prospectus also assumes no sale of Pre-funded Warrants and no exercise by the representative of its option to purchase additional shares of our common stock to cover over-allotments, if any.
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RISK FACTORS
Investing in our securities involves a high degree of risk. Before making an investment decision, you should consider carefully the following risk factors, as well as the other information set forth in this registration statement, including matters addressed in the section of this registration statement titled “Cautionary Note Regarding Forward-Looking Statements”. You should carefully consider the following risks and all of the other information contained in this prospectus before deciding whether to invest in our securities. Our business, financial condition, results of operations and future prospects may be adversely affected as a result of such risks. In such an event, the market price of our common stock could decline, and you could lose part or all of your investment.
Additionally, the risks and uncertainties described in this registration statement, any prospectus supplement, any post-effective amendment are not the only risks and uncertainties that we face. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial. The following discussions should be read in conjunction with our financial statements and the notes to the financial statements included therein.
Risks Related to this Offering and Ownership of our Securities
Investors in this Offering will experience immediate and substantial dilution in the book value of their investment.
The public offering price will be substantially higher than the net tangible book value per share of our outstanding shares of common stock. As a result, investors in this Offering will incur immediate dilution of $2.52 per share based on the assumed public offering price of $3.61 per share of Common Stock. Investors in this Offering will pay a price per share of Common Stock that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this Offering.
Our management will have broad discretion over the use of the proceeds we receive in this Offering and might not apply the proceeds in ways that increase the value of your investment.
Our management will have broad discretion over the use of our net proceeds from this Offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We expect to use the net proceeds from this offering for working capital, capital expenditures relating to growing our business, and general corporate purposes. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this Offering.
The Company may be deemed a “controlled company” within the meaning of the NYSE American rules and the rules of the SEC.
Jerry Tang, who serves as Chief Executive Officer, President, Chairman, and as a director of the Company may be deemed to beneficially own a majority (approximately 69.9%) of the Company’s outstanding common stock. As a result, the Company may be deemed to be a “controlled company” within the meaning of the corporate governance standards of NYSE American. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
| ● | the requirement that a majority of the BlockchAIn Board consist of “independent directors” as defined under the rules of the NYSE American; |
| ● | the requirement that the Company have a compensation committee that is composed entirely of directors who meet the NYSE American independence standards for compensation committee members with a written charter addressing the committee’s purpose and responsibilities; and |
| ● | the requirement that the Company’s director nominations be made, or recommended to the Company’s full board of directors, by its independent directors or by a nominations committee that consists entirely of independent directors and that the Company adopt a written charter or board resolution addressing the nominations process. |
If the Company is deemed to be a “controlled” company as a result of the Business Combination, the Company may rely upon these exemptions. although it does not currently intend to do so. If the Company relies on any of the exemptions listed above in the future, stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE American.
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We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing securities that would dilute your ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our common stock.
Any additional financing that we secure may require the granting of rights, preferences or privileges senior to, or pari passu with, those of our common stock. Any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our shares of common stock, which may be highly dilutive. The holders of any securities or instruments we may issue may have rights superior to the rights of our common stockholders. If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over holders of our common stock, it may negatively impact the trading price of our common stock and you may lose all or part of your investment.
Future sales of a substantial number of shares of Common Stock by us or our large stockholders, or dilutive exercises of a substantial number of warrants by our warrant holders could adversely affect the market price of our Common Stock.
Sales by us or our stockholders of a substantial number of shares of common stock in the public market following this offering, or the perception that these sales might occur, could cause the market price of the common stock to decline or could impair our ability to raise capital through a future sale of our equity securities. Additionally, dilutive exercises of a substantial number of warrants by our warrant-holders, or the perception that such exercises may occur, could put downward pressure on the market price of our common stock.
Future grants of shares of common stock under our equity incentive plan to our employees, non-employee directors and consultants, or sales by these individuals in the public market, could result in substantial dilution, thus decreasing the value of your investment in common stock. In addition, stockholders will experience dilution upon the exercise of any outstanding warrants.
Our Board approved an equity incentive plan which provides for the issuance of up to 7,526,299 additional shares of common Stock. Sales of a substantial number of the above-mentioned shares of Common Stock in the public market could result in a significant decrease in the market price of the Common Stock and have a material adverse effect on your investment.
We are an emerging growth company and a “smaller reporting company” and the reduced reporting requirements applicable to such companies may make our Common Stock less attractive to investors.
BlockchAIn is an emerging growth company, as defined in the JOBS Act. For as long as BlockchAIn continues to be an emerging growth company, it 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, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements and exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. BlockchAIn cannot predict if investors will find its common stock less attractive because BlockchAIn may rely on these exemptions. If some investors find common stock less attractive as a result, there may be a less active trading market for common stock and its stock price may be more volatile.
BlockchAIn will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the sale of our common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenues of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. BlockchAIn has opted to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare BlockchAIn’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.
Additionally, BlockchAIn is a “smaller reporting company” as defined in Item 10(f) of Regulation S-K, which allows us to take advantage of certain scaled disclosure requirements available specifically to smaller reporting companies. For example, we may continue to use reduced compensation disclosure obligations, and we will not be obligated to follow the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will remain a smaller reporting company until the last day of the fiscal year in which we have at least $100 million in revenue and at least $700 million in aggregate market value of our shares held by non-affiliated persons and entities (known as “public float”), or, alternatively, if our revenue exceeds $100 million, until the last day of the fiscal year in which our public float was at least $250.0 million (in each case, with respect to public float, as measured as of the last business day of the second quarter of such fiscal year). For the year ended December 31, 2025, BlockchAIn recorded revenue of approximately $18.5 million.
We cannot predict or otherwise determine if investors will find our securities less attractive as a result of our reliance on exemptions as a smaller reporting company and/or “non-accelerated filer.” If some investors find our securities less attractive as a result, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.
The price of our common stock may be volatile, and you may lose all or part of your investment.
The market price of our common stock is volatile and may fluctuate substantially as a result of many factors. Factors which may cause fluctuations in the price of our common stock include, but are not limited to:
| ● | actual or anticipated fluctuations in our growth rate or results of operations or those of our competitors; |
| ● | announcements by us or our competitors of new products or services, commercial relationships, acquisitions, or expansion plans; |
| ● | announcements by us or our competitors of other material developments; |
| ● | our involvement in litigation; |
| ● | changes in government regulation applicable to us and our products; |
| ● | sales, or the anticipation of sales, of our common stock, warrants and debt securities by us, or sales of our common stock by our insiders or other shareholders, including upon expiration of contractual lock-up agreements; |
| ● | competition from existing or new technologies and products; |
| ● | changes in key personnel; |
| ● | the trading volume of the common stock; |
| ● | changes in the estimation of the future size and growth rate of our markets; |
| ● | changes in our quarterly or annual forecasts with respect to operating results and financial conditions; |
| ● | general economic and market conditions; and |
| ● | Announcements regarding business acquisitions. |
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In addition, the stock markets have experienced extreme price and volume fluctuations. Broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. Technical factors in the public trading market for common stock may produce price movements that may or may not comport with macroeconomic, industry or BlockchAIn-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related hedging or other technical trading factors. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. If we become involved in any similar litigation, we could incur substantial costs and our management’s attention and resources could be diverted.
The requirements of being a public company may strain the Company’s resources and distract management and we will incur substantial costs as a result of being a public company.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act, and the Securities Act of 1933, as amended (the “Securities Act”). These rules, regulations and requirements are extensive. We will incur significant costs associated with our public company corporate governance and reporting requirements. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more corporate employees to comply with these requirements or engage outside consultants, which would increase our costs and expenses. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations. These applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on the Board or as executive officers.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.
As a result of disclosure of information in this prospectus and in the filings that we are required to make as a public company, our business, operating results and financial condition have become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If any such claims are successful, our business, operating results and financial condition could be adversely affected, and even if the 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 adversely affect our business, operating results and financial condition.
The Pre-Funded Warrants are speculative in nature and there is not expected to be an active trading market for the warrants.
The Pre-funded Warrants offered in this Offering do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock at a fixed price for a limited period of time. Pre-funded Warrant holders may exercise their right to acquire the common stock and pay an exercise price of $0.0001 per share. The Pre-funded Warrants do not expire. In addition, there is no established trading market for the Pre-funded Warrants and we do not expect an active trading market to develop. Without an active trading market, the liquidity of the Pre-funded Warrants will be limited.
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Holders of the Pre-funded Warrants will have no rights as a common stockholder until they acquire our common stock.
Until holders of the Pre-funded Warrants acquire shares of our common stock upon exercise of the Pre-funded Warrants, the holders will have no rights with respect to shares of our common stock issuable upon exercise of the Pre-funded Warrants. Upon exercise of the Pre-funded Warrants, the holder will be entitled to exercise the rights of a common stockholder as to the security exercised only as to matters for which the record date occurs after the exercise.
An active, liquid and orderly trading market for our Common Stock may not develop, the price of our stock may be volatile, and you could lose all or part of your investment.
Even though our Common Stock is currently listed on the NYSE American, we cannot predict the extent to which investor interest in our company will lead to the development of an active trading market in our securities or how liquid that market might become. If such a market does not develop or is not sustained, it may be difficult for you to sell your shares of Common Stock at the time you wish to sell them, at a price that is attractive to you, or at all. There could be extreme fluctuations in the price of our Common Stock if there are a limited number of shares in our public float.
The trading price of our Common Stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Our stock price could be subject to wide fluctuations in response to a variety of factors, which include:
| ● | whether we achieve our anticipated corporate objectives; |
| ● | actual or anticipated fluctuations in our quarterly or annual operating results; |
| ● | changes in our financial or operational estimates; |
| ● | our ability to implement our operational plans; |
| ● | changes in the economic performance or market valuations of companies similar to ours; and |
| ● | general economic or political conditions in the United States or elsewhere. |
In addition, broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following this offering. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
This Offering may cause the trading price of our Common Stock to decrease.
The number of shares of Common Stock underlying the securities we propose to issue and ultimately will issue if this Offering is completed may result in an immediate decrease in the trading price of our Common Stock. This decrease may continue after the completion of this Offering.
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If our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on the NYSE American and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our securities adversely, our stock price and trading volume could decline.
The trading market for our common stock is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
In making your investment decision, you should understand that we and the underwriters have not authorized any other party to provide you with information concerning us or this offering.
You should carefully evaluate all of the information in this prospectus before investing in our company. We may receive media coverage regarding our company, including coverage that is not directly attributable to statements made by our officers, that incorrectly reports on statements made by our officers or employees, or that is misleading as a result of omitting information provided by us, our officers or employees. We and the underwriter have not authorized any other party to provide you with information concerning us or this offering, and you should not rely on unauthorized information in making an investment decision.
We do not intend to pay any cash dividends in the foreseeable future.
The current expectation is that we will retain our future earnings to fund the development and growth of the business. As a result, capital appreciation, if any, of the common stock of BlockchAIn will be your sole source of gain, if any, for the foreseeable future.
Currently, our shares of common stock are listed on NYSE American. However, there may not be enough liquidity in such market to enable securityholders to sell their securities.
Currently, our common stock is listed on NYSE American. If a public market for our securities does not develop, investors may not be able to re-sell their securities, rendering their securities illiquid and possibly resulting in a complete loss of their investment. We cannot predict the extent to which investor interest in us will lead to the development of an active, liquid trading market. The trading price of and demand for the common stock and the development and continued existence of a market and favorable price for the common stock will depend on a number of conditions, including the development of a market following, including by analysts and other investment professionals, the businesses, operations, results, and prospects of the Company, general market and economic conditions, governmental actions, regulatory considerations, legal proceedings, and developments or other factors. These and other factors may impair the development of a liquid market and the ability of investors to sell shares at an attractive price. These factors also could cause the market price and demand for the common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares and may otherwise negatively affect the price and liquidity of the common stock. Many of these factors and conditions are beyond the control of the Company or the stockholders.
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A decline in the price of common stock could affect our ability to raise working capital and adversely impact our ability to continue operations.
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of the common stock and a reduction in our ability to raise capital. A decline in the price of our common stock could be especially detrimental to our liquidity, operations and strategic plans. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new products and services and continue current operations. If our common stock’s price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.
If securities analysts do not publish research or reports about the Company’s business or if they publish negative evaluations of the Company’s stock, the price of the Company’s stock could decline.
The trading market for BlockchAIn common stock will rely, in part, on the research and reports that industry or financial analysts publish about the Company or the Company’s business. Equity research analysts may elect not to provide research coverage of BlockchAIn common stock, and such lack of research coverage may adversely affect the market price of its common stock. In the event it does have equity research analyst coverage, the Company will not have any control over the analysts or the content and opinions included in their reports. The price of BlockchAIn common stock could decline if one or more equity research analysts downgrade its stock or issue other unfavorable commentary or research. If one or more equity research analysts cease coverage of the Company or fail to publish reports on it regularly, demand for its common stock could decrease, which in turn could cause its stock price or trading volume to decline.
Risks Related to Our Business and Our Industry
For purposes of this section, the words “we,” “our,” “us,” “One Blockchain,” and the “Company” refers to BlockchAIn and its subsidiaries.
Risks Related to Our Business and Operations
We have generated the majority of our revenue from a small number of customers, including Blue Ridge Digital Mining, which is controlled by Jerry Tang, our Chief Executive Officer, President, and the direct or indirect owner of the majority of the membership interests of the One Blockchain Securityholders, and we are therefore exposed to a number of related risks.
For the twelve months ended December 31, 2025, approximately 93% of One Blockchain’s revenues were derived from three customers. For the periods from February 8, 2024 to December 31, 2024 and January 1, 2024 to February 7, 2024, approximately 97% and 97%, respectively, of One Blockchain’s revenues were attributable to a single customer, Blue Ridge Digital Mining. Blue Ridge Digital Mining is owned by VCV Digital Infrastructure Holdings LLC, which is controlled by or affiliated with Jerry Tang, Chief Executive Officer and President of One Blockchain and the direct or indirect owner of the majority of the membership interests of the One Blockchain Securityholders.
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Our dependence on Blue Ridge Digital Mining for the substantial majority of our revenues exposes us to significant risks related to customer concentration. If Blue Ridge Digital Mining were to reduce its purchases, terminate its relationship with us, or experience financial difficulties, our business, financial condition, and results of operations would be materially and adversely affected. We may not be able to quickly replace the revenue generated by this customer with revenue from other sources, and any such loss could result in a significant decline in our revenues and profitability.
Additionally, because Blue Ridge Digital Mining is controlled by Jerry Tang, our Chief Executive Officer, President, and direct or indirect majority equity holder, our transactions with this customer may be subject to heightened scrutiny and potential conflicts of interest. Although we seek to ensure that all transactions with related parties are conducted on an arm’s-length basis and in accordance with applicable laws and our internal policies, there can be no assurance that such transactions will not be challenged or that they will not result in unfavorable terms for us. Any perceived or actual conflicts of interest could also negatively impact our reputation and relationships with other customers, suppliers, or investors.
Furthermore, our reliance on a single customer may limit our bargaining power and flexibility in negotiating contract terms, pricing, and payment schedules. This concentration also makes us more vulnerable to changes in the business strategies, financial condition, or operational priorities of Blue Ridge Digital Mining. If Blue Ridge Digital Mining were to experience operational disruptions, regulatory challenges, or shifts in its business model, our own business could be significantly disrupted.
In summary, our significant customer concentration, particularly with a related party, exposes us to risks that could materially and adversely affect our business, financial condition, results of operations, and prospects.
Our operational results and growth are heavily dependent on securing and maintaining favorable agreements for power and land, and the failure to do so could adversely impact our business and planned expansions.
Our ability to operate our existing facilities and develop new ones relies on securing cost-effective, reliable power and suitable land. The costs of electric power account for a significant portion of One Blockchain’s cost of revenue. We recently announced the expansion of our CLT-01 facility from 40 MW to 65 MW under an amended electric service agreement for 15 years with our existing utility provider. Failure to secure agreements of this type, or a significant increase in power costs or adverse lease terms, could delay or prevent our expansion, reduce our competitiveness, and materially harm our financial performance and growth prospects. The ground lease for our CLT-01 facility has an initial five-year term, and while there are renewal options, there is no guarantee that these will be exercised or that terms will remain favorable.
The availability of electric power may have technical, infrastructure, or regulatory limitations or may be interrupted by power outages that may harm One Blockchain’s ability to attain growth or cause revenues to decline.
There has been a substantial increase in the demand for electricity for digital asset mining, and this has had varying impacts on local electricity supply. Additionally, One Blockchain plans to increase its reliance on renewable sources of power in the future. Renewable power is generally an intermittent and variable source of electricity, which may not always be available. Because the electrical grid has very little storage capacity, the balance between electricity supply and demand must be maintained at all times to avoid a blackout or other cascading problem. Intermittent sources of renewable power are challenging because they disrupt the conventional methods for planning the daily operation of the electrical grid. Their power fluctuates over multiple time horizons, forcing the grid operator to adjust its day-ahead, hour-ahead, and real-time operating procedures.
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The amount of power required by One Blockchain and its customers will increase with the demand for One Blockchain’s services and the increase in equipment operated by its hosting customers. Should One Blockchain’s operations require more electricity than can be supplied in the areas where its data center facilities are located or should the electrical transmission grid and distribution systems be unable to provide the continuous, steady supply of electricity required, One Blockchain may have to limit or suspend activities or reduce the speed of its proposed expansion. If One Blockchain is unable to procure electricity at a suitable price, One Blockchain may have to shut down its operations in that particular jurisdiction either temporarily or permanently. Therefore, increased power costs and limited availability and curtailment of power resources will reduce One Blockchain’s revenue and have a material and adverse effect on its cost of revenue and results of operations. Although One Blockchain aims to build and operate energy efficient facilities, there can be no assurance such facilities will be able to deliver sufficient power to meet the growing needs of One Blockchain’s business. If One Blockchain is unable to receive adequate power supply and is forced to reduce its operations due to the availability or cost of electrical power, its business could experience materially negative impacts.
Certain government actors have begun to intervene with the supply of electrical energy to cryptocurrency miners. Governments or government regulators may potentially restrict electricity suppliers from providing electricity to mining data centers in times of electricity shortage or may otherwise potentially restrict or prohibit the provision of electricity to businesses like One Blockchain. In the event government regulators issue moratoriums or impose bans or restrictions involving hosting operations or transaction processing in jurisdictions in which it operates, One Blockchain will not be able to continue its operations in such jurisdictions. A moratorium ban or restriction could have a material adverse effect on One Blockchain’s business, financial condition and results of operations.
Additionally, One Blockchain’s facility operations would be materially adversely affected by a power outage. Energy costs and availability are vulnerable to risks of outages and power grid damage as a result of inclement weather, animal incursion, sabotage and other events out of One Blockchain’s control. Because the digital asset mining hosting services of One Blockchain’s business consumes a large amount of energy, it is not practical or economical for One Blockchain’s operations to run on back-up generators in the event of a power outage, which may be caused by weather, wildfires, pandemics, falling trees, falling distribution poles and transmission towers, transmission and distribution cable cuts, other force majeure events in the electricity and natural gas markets and/or the negligence or malfeasance of others. Any system downtime resulting from insufficient power resources or power outages could have a material adverse effect on One Blockchain’s business, financial condition and results of operations.
The development and construction of new data center facilities are subject to significant risks, including delays and cost overruns.
Our growth strategy heavily relies on the successful development and commissioning of new data center capacity, including the expansion of our CLT-01 facility. These projects involve significant capital expenditure and are subject to numerous risks, such as construction delays, shortages of materials and labor, unexpected budget increases, permitting and regulatory hurdles, and issues with contractors. Any material delay or substantial cost increase in these projects could adversely affect our ability to deploy compute infrastructure, commence HPC operations, and generate anticipated revenue, thereby impacting our financial condition and growth.
We operate in highly competitive digital asset mining and HPC markets.
The digital asset mining and HPC data center markets are characterized by intense competition. In digital asset mining, we compete with numerous companies for access to low-cost power, efficient hosting capacity, low-cost power, and reliable infrastructure. Many competitors may have greater financial resources, established relationships, or more advanced technology. In the HPC market, we will compete with established data center REITs, hyperscale cloud providers, and specialized HPC providers who may have significant advantages in terms of existing infrastructure, customer relationships, and brand recognition. Our ability to compete effectively will depend on our execution of growth strategies, securing low-cost power, and operational efficiency. Failure to compete successfully could lead to reduced market share, lower profitability, and an inability to achieve our growth objectives.
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If One Blockchain fails to accurately estimate the factors upon which One Blockchain bases its contract pricing, One Blockchain may generate less profit than expected or incur losses on those contracts, which could have a material adverse effect on One Blockchain’s business, financial condition and results of operations.
One Blockchain’s hosting contracts are generally priced taking into account various factors including the then digital asset value performance, network hash rate, purchase cost of mining machines, estimated power consumption by One Blockchain’s clients, along with other costs of products or services, as adjusted for actual costs. One Blockchain’s ability to earn a profit on such contracts requires that One Blockchain accurately estimate the costs involved and outcomes likely to be achieved and assess the probability of generating sufficient hosting and colocation capacity within the contracted time period. One Blockchain may also not be able to accurately forecast the outcome of selling its products and services at a particular price and the inability to accurately estimate the factors upon which One Blockchain bases its contract pricing could have a material adverse effect on One Blockchain’s business, financial condition and results of operations.
The average selling prices of One Blockchain’s solutions and services may fluctuate from time to time due to technological advancement and One Blockchain may not be able to pass onto its machine suppliers such decreases, which may in turn adversely affect its profitability.
The digital asset-related industry is characterized by rapid launches of new products, continuous technological advancements and changing market trends and customer preferences, all of which may translate to fluctuations in the average selling prices of products or services over time. Because One Blockchain competes in an environment of rapidly evolving technology advancement, market trends and developments of the digital infrastructure hosting industry, there is no assurance that One Blockchain will be able to pass on any decrease in average selling prices of One Blockchain’s services to its suppliers in a timely manner or at all. In the event that average selling prices of One Blockchain’s services unusually or significantly decreases and such decreases cannot be offset by a corresponding decrease in the prices of the principal components of its services, One Blockchain’s gross profit margins may be materially and adversely affected.
One Blockchain relies on supplies from third-party providers, and any negative incidents caused by actions taken by them that are outside of One Blockchain’s control may adversely impact One Blockchain’s business and results of operations.
One Blockchain relies on a single third-party electricity provider , and has purchased digital asset mobile mining containers (referred to herein as “Antboxes”) from a single provider (Blue Ridge Digital Mining). To some extent, One Blockchain relies on these and other third-party suppliers and service providers to provide quality services to customers. One Blockchain’s brand and reputation may be harmed by actions taken by such third parties that are outside of One Blockchain’s control. While One Blockchain believes that alternative suppliers are readily available in the market, changing to a new supplier may require additional costs and time.
Despite the measures One Blockchain has taken to ensure the quality of products and services provided by third-party suppliers and service providers, to the extent they are unable to maintain their production facilities’ efficiency, supply sufficient products in a timely manner, or provide satisfactory products and services to One Blockchain’s customers, which may be due to events that are beyond One Blockchain’s or their control, such as manufacturing defects, One Blockchain may suffer reputational damage, and One Blockchain’s business, financial condition and results of operations may be materially and adversely affected. While One Blockchain has not experienced such incidents that had a material adverse impact on its business as of the date of this prospectus, as such incidents are beyond One Blockchain’s control, there is no assurance that such incidents will not occur in the future regardless of the measures One Blockchain has taken, and will take, to maintain the quality products and services provided by third-party suppliers and service providers. If One Blockchain is unable to effectively address these risks, its brand image, reputation and financial performance may be materially and adversely affected.
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In addition, One Blockchain may have to turn to less reputable suppliers if One Blockchain cannot source adequate equipment or other supplies from its regular suppliers. Under such circumstances, the quality of the equipment may suffer and could cause performance issues in One Blockchain’s products and services. Shortages of supplies could result in reduced production or delays in production, as well as an increase in costs, which may negatively affect One Blockchain’s abilities to fulfill orders or provide timely services to customers, as well as One Blockchain’s customer relationships and profitability. Supply shortages may also increase One Blockchain’s costs of revenue because it may be required to pay higher prices for products in short supply, without being able to pass such costs to customers. As a result, One Blockchain’s business, results of operations and reputation could be materially and adversely affected.
Any failure of One Blockchain’s solutions or services to meet the necessary quality standards could adversely affect One Blockchain’s reputation, business and results of operation.
The quality of the products and services One Blockchain provides is critical to the success of its business and depends significantly on the effectiveness of One Blockchain’s and One Blockchain’s manufacturing service providers’ quality control systems. In its efforts to quickly meet new market trends and demand and adopt new technologies, One Blockchain’s products and services may not have adequate time to go through One Blockchain’s normal rigorous testing procedures and final inspection, which could result in instances where One Blockchain’s products and services cannot reach the required performance standard, or One Blockchain’s products and services are found to be defective or significantly unsatisfying. These instances could result in One Blockchain’s customers suffering losses. Defects detected in products and services before they are provided to One Blockchain’s customers may result in additional costs for remediation and rework. Defects detected after One Blockchain’s products and services are provided may result in One Blockchain’s incurring further costs relating to inspection, installation or remediation, which may result in damages to One Blockchain’s reputation, loss of customers, government fines and disputes and litigation.
Power outages or shortages, labor disputes and other factors may result in constraints on One Blockchain’s business activities.
Historically, One Blockchain has not experienced constraints on its business activities due to power outages or shortages, labor disputes or other factors. However, there can be no assurance that One Blockchain’s operations will not be affected by power outage or shortages, labor disputes or other factors in the future, thereby causing material disruptions and delays in One Blockchain’s delivery schedule. In such an event, One Blockchain’s business, results of operations and financial condition could be materially and adversely affected.
Our operations are dependent on the performance and reliability of our data center infrastructure and operational technology.
Our success will depend on the efficiency, reliability, and longevity of the containerized data center modules we employ. We utilize Foreman miner management software and a proprietary machine learning model for grid consumption monitoring. However, any failure, inadequacy, or cyberattack affecting mining management software could disrupt operations, reduce efficiency, and increase costs, thereby harming our business and financial results.
We are subject to risks associated with our need for significant and reliable electric power, and the complexities of our power agreements, including true-up adjustments and curtailment requirements, could adversely impact our costs and profitability.
Our hosting and planned HPC operations are energy-intensive, making the cost and reliability of electricity critical to our profitability. However, this cost is subject to several factors that could lead to increased expenses. First, our arrangement involves an annual true-up adjustment with the utility provider. A significant upward adjustment in this true-up could lead to unexpected increases in our operational costs. Second, our CLT-01facility is subject to mandatory curtailment requirements during coincident peak demand periods within our regional supplier’s territory. While we employ a proprietary machine learning model designed to predict these peaks, have historically adopted a conservative approach to curtailment, and have not been subject to penalties for failure to comply with mandatory curtailment requirements, any failure of this model or misjudgment in curtailment strategy could result in substantial financial penalties in millions of dollars. Both the annual true-up and failure to properly manage coincident peak curtailment have the potential to cause significant financial losses. Furthermore, our planned Texas facility aims to leverage wind energy, but renewable power sources can be intermittent, potentially requiring supplemental power purchases at higher costs. Any power outages, shortages, transmission constraints, significant increases in electricity prices, or adverse outcomes from true-up adjustments or curtailment events could curtail our operations, substantially increase our costs, and reduce our profitability.
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One Blockchain may be vulnerable to security breaches, which could disrupt its operations and have a material adverse effect on its business, financial condition and results of operations.
A party who is able to compromise the physical security measures protecting One Blockchain’s facilities could cause interruptions or malfunctions in One Blockchain’s operations and misappropriate One Blockchain’s property or the property of its customers. Such a compromise could be particularly harmful to One Blockchain’s brand and reputation. One Blockchain may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused by breaches in security. As techniques used to breach security change frequently and are often not recognized until launched against a target, One Blockchain may not be able to implement new security measures in a timely manner or, if and when implemented, One Blockchain may not be certain whether these measures could be circumvented. Any breaches that may occur could expose One Blockchain to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, harm to One Blockchain’s reputation and increases in One Blockchain’s security costs, which could have a material adverse effect on its business, financial condition and results of operations.
In addition, any assertions of alleged security breaches or systems failure made against One Blockchain, whether true or not, could harm its reputation, cause One Blockchain to incur substantial legal fees and have a material adverse effect on One Blockchain’s business, financial condition and results of operations. Whether or not any such assertion actually develops into litigation, One Blockchain’s management may be required to devote significant time and attention to dispute resolution (through litigation, settlement or otherwise), which would detract from One Blockchain’s management’s ability to focus on its business. Any such resolution could involve the payment of damages or expenses by One Blockchain, which may be significant. In addition, any such resolution could involve One Blockchain’s agreement with terms that restrict the operation of its business. Any such resolution, including the resources exhausted in connection therewith, could have a material adverse effect on One Blockchain’s business, financial condition and results of operations.
Furthermore, security breaches, computer malware and computer hacking attacks have been a prevalent concern in the digital asset exchange market since the launch of the digital asset network. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm One Blockchain’s business operations or result in loss of One Blockchain’s assets.
Our business is dependent on our experienced management team and our ability to attract and retain key personnel.
One Blockchain’s success depends significantly on the continued services of our experienced management team, including Jerry Tang (CEO), Jolienne Halisky (CFO) and Eyal Rozen (COO), who possess expertise in real estate, digital assets, energy, finance and capital markets. The loss of any key member of our management team or our inability to attract and retain other qualified personnel could hinder our ability to execute our business strategy and manage our growth effectively.
If One Blockchain is unable to maintain or enhance its brand recognition, its business, financial condition and results of operations may be materially and adversely affected.
Maintaining and enhancing the recognition, image and acceptance of One Blockchain’s brand are important to One Blockchain’s ability to differentiate its products and services from and to compete effectively with its peers. As One Blockchain relies heavily on word-of-mouth branding, One Blockchain’s brand image could be jeopardized if it fails to maintain high product and service quality, pioneer and keep pace with evolving technology trends, or timely fulfil the orders for its products and services. If One Blockchain fails to promote its brand or to maintain or enhance the brand recognition and awareness among One Blockchain’s customers, or if One Blockchain is subject to events or negative allegations affecting its brand image or publicly perceived position of its brand, One Blockchain’s business, operating results and financial condition could be adversely affected.
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One Blockchain may be at a higher risk of litigation and other legal proceedings due to regulatory developments affecting the digital asset and data center industries, which could ultimately be resolved against One Blockchain, requiring material future cash payments or charges, and accordingly impair One Blockchain’s financial condition and results of operations.
The nature and complexity of One Blockchain’s business could make it susceptible to various claims, both in litigation and binding arbitration proceedings, legal proceedings, and government investigations, due to the heightened regulatory scrutiny following the recent disruptions in the crypto asset markets. One Blockchain believes that since cryptocurrency mining, and the digital asset industry generally, is a relatively new business sector, it is more likely subject to government investigation and regulatory determination, particularly following recent cryptocurrency market participant bankruptcies (see “—Risks Related to Regulatory Compliance and Other Legal Matters – We are subject to a highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations.”). Any claims, regulatory proceedings or litigation that could arise in the course of One Blockchain’s business could have a material adverse effect on One Blockchain, its business or operations, or the industry as a whole.
One Blockchain may engage in acquisitions or strategic alliances in the future that could disrupt One Blockchain’s business, result in increased expenses, reduce One Blockchain’s financial resources and cause dilution to stockholders. One Blockchain cannot assure you that such acquisitions or strategic alliances may be successfully implemented.
Although One Blockchain has not engaged in significant acquisitions or strategic alliances in the past, it may look for potential acquisitions or strategic alliances in the future to expand its business. However, One Blockchain may not be able to find suitable acquisition candidates, complete acquisitions on favorable terms, if at all, or integrate any acquired business, products or technologies into One Blockchain’s operations. If One Blockchain does complete acquisitions, they may be viewed negatively by customers or investors and they may not enable One Blockchain to strengthen its competitive position or achieve its goals. In addition, any acquisitions that One Blockchain makes could lead to difficulties in integrating personnel, technologies and operations from the acquired businesses and in retaining and motivating key personnel from these businesses. Moreover, acquisitions may disrupt One Blockchain’s ongoing operations, divert management from day-to-day responsibilities and increase One Blockchain’s expenses. Future acquisitions may reduce One Blockchain’s cash available for operations and other uses, and could result in increases in amortization expenses related to identifiable intangible assets acquired, potentially dilutive issuances of equity securities or the incurrence of debt. One Blockchain cannot predict the number, timing or size of future acquisitions, or the effect that any such acquisitions might have on One Blockchain’s operating results.
Any global systemic economic and financial crisis could negatively affect One Blockchain’s business, results of operations, and financial condition.
Any prolonged slowdown in the global economy may have a negative impact on One Blockchain’s business, results of operations and financial condition. The global financial markets have experienced significant disruptions since 2008 and the United States, Europe and other economies have experienced periods of recession. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States. There have also been concerns over unrest in Ukraine, the Middle East and Africa, which have resulted in volatility in financial and other markets, as well as the significant potential changes to United States trade policies, treaties and tariffs. There were and could be in the future a number of domino effects from such turmoil on One Blockchain’s business, including significant decreases in orders from its customers, insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of One Blockchain’s products and services and/or customer insolvencies, and counterparty failures negatively impacting One Blockchain’s operations. Any systemic economic or financial crisis could cause revenue for the data center industry as a whole to decline dramatically and could materially and adversely affect One Blockchain’s results of operations.
Concerns about greenhouse gas emissions and global climate change may result in environmental taxes, charges, assessments or penalties and could have a material adverse effect on our business, financial condition and results of operations.
The effects of human activity on global climate change have attracted considerable public and scientific attention, as well as the attention of the United States and other foreign governments. Efforts are being made to reduce greenhouse gas emissions, particularly those from coal combustion power plants, some of which plants we may rely upon for power. The added cost of any environmental taxes, charges, assessments or penalties levied on such power plants could be passed on to us, increasing the cost to run our hosting facilities.
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The lack of consistent climate legislation creates uncertainty for our industry, and digital asset mining’s high energy usage makes it a potential target for future regulations. New laws could impose higher energy costs, require additional capital investments, mandate environmental monitoring, or impose other compliance burdens.
If One Blockchain experiences difficulty in collecting its trade receivables, its liquidity, financial condition and results of operations would be negatively impacted.
One Blockchain derives its revenue from the sale of products and services and is subject to counterparty risks such as its customer’s inability to pay. As of December 31, 2025 and 2024, One Blockchain’s trade receivables amounted to $7,720 and $359,361, respectively. There can be no assurance that One Blockchain will be able to collect its trade receivables on a timely basis, and its trade receivable turnover days may increase, which in turn could materially and adversely affect One Blockchain’s liquidity, financial condition and results of operations.
One Blockchain’s operations and those of its production partners and customers are vulnerable to natural disasters and other events beyond One Blockchain’s control, the occurrence of which may have an adverse effect on the supply chain of One Blockchain’s suppliers and on One Blockchain’s facilities, personnel and results of operations.
One Blockchain’s business could be adversely affected by natural disasters or outbreaks of epidemics. One Blockchain has not adopted any written contingency plans to combat any future natural disasters, such as floods and mudslides, or epidemics / pandemics. These natural disasters, outbreaks of contagious diseases, and other adverse public health developments in countries where One Blockchain’s computing power facilities are located or any other countries or regions in which One Blockchain conducts business could severely disrupt its business operations by damaging One Blockchain’s network infrastructure or information technology system or impacting the productivity of One Blockchain’s workforce, which may adversely affect its financial condition and results of operations.
Various social and political circumstances in the U.S. and around the world may contribute to increased market volatility and economic uncertainties that could have a material adverse effect on the Company’s business, operations and the financial statements.
Wars and other forms of conflict, rising global trade tensions, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics, may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Specifically, the rising conflict between Russia and Ukraine, and the rising conflicts in the Middle East, and resulting market volatility could have a material adverse impact on the Company. In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia.
In addition to the Russia-Ukraine conflict and the Israel-Hamas conflict, the geopolitical landscape has been significantly affected by the escalation of hostilities between the United States, Israel and Iran. Following prior exchanges of strikes between Israel and Iran in 2024 and a twelve-day conflict involving U.S. and Israeli strikes on Iranian nuclear facilities and military sites in June 2025, the United States and Israel launched a large-scale joint military operation against Iran beginning on February 28, 2026. The operation has targeted Iranian military infrastructure, nuclear program assets, senior government and military officials. Iran has responded with retaliatory missile and drone strikes against targets in Israel and U.S. military installations across the Persian Gulf region, including in Bahrain, Jordan, Kuwait and Qatar. This conflict represents a material escalation in regional instability, the full scope, duration and consequences of which remain highly uncertain.
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The U.S.-Israel-Iran conflict has had immediate and substantial effects on global trade, energy markets and financial markets. Iran’s Islamic Revolutionary Guard Corps has effectively closed the Strait of Hormuz — through which approximately 20% of global seaborne oil trade transits — to commercial shipping, leading major container carriers and tanker operators to suspend transits and reroute vessels. Concurrently, Iran-backed Houthi forces in Yemen have announced a resumption of attacks on commercial shipping in the Red Sea and the Bab el-Mandeb Strait, creating a dual chokepoint crisis that has disrupted global shipping lanes. Major shipping companies have suspended operations through both maritime corridors and rerouted vessels around the Cape of Good Hope, significantly increasing transit times and freight costs and disrupting global supply chains. War risk insurance for the Strait of Hormuz has been withdrawn or repriced at prohibitive levels, and airspace closures across multiple Gulf states have grounded thousands of flights. Brent crude oil prices have surged, and analysts have projected prices could reach $100 per barrel or higher if supply disruptions persist. Global stock markets have experienced significant declines, with indices in Asia, Europe and the United States falling sharply, and safe-haven assets such as gold and U.S. Treasuries have seen increased demand. The conflict has also prompted heightened sanctions enforcement activity and new compliance risks across financial markets.
Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s business, operations and the financial statements.
Our business is subject to a wide range of laws and regulations, and our failure to comply with those laws and regulations could harm our business.
Our business is subject to regulation by various federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety and environmental laws, including those related to energy usage and energy efficiency requirements, AI, federal securities laws, and tax laws and regulations.
For example, government authorities have in the past sought to restrict data center development based on environmental considerations and have imposed moratoria on data center development, citing concerns about energy usage, requiring new data centers to meet energy efficiency requirements or regulating the use of power by large energy consumers. We may face higher costs from any laws requiring enhanced energy efficiency measures, changes to cooling systems, caps on energy usage, land use restrictions, limitations on back-up power sources, or other environmental requirements.
These laws and regulations are subject to change over time and thus we must continue to monitor and dedicate resources to ensure continued compliance. In particular, the global AI regulatory environment continues to evolve as regulators and lawmakers have started proposing and adopting, or are currently considering, regulations and guidance specifically on the use of AI. Several U.S. states are considering enacting or have already enacted regulations concerning AI technologies, with new state laws taking effect on January 1, 2026, which may impact our or our customers’ ability to train, deploy, or release AI models, and increase our compliance costs. Non-compliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions and jail time for responsible employees and managers. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, financial condition, and prospects could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results, financial condition, and prospects.
We may not be able to finalize or execute definitive lease agreements with prospective tenants, which could adversely affect our financial results, growth prospects, and business strategy.
We are engaged in ongoing commercial discussions with multiple prospective tenants across several categories, including GPU cloud platforms, bare-metal GPU marketplaces, AI cloud infrastructure operators, AI silicon and hosted-inference platforms, and sovereign AI infrastructure programs. As of the date of this prospectus, we have negotiated and exchanged draft lease agreements with a global cloud provider covering 26 MW utility load (20 MW IT load) of data center capacity at CLT-01. Finalization and execution of this lease agreement is contingent upon the provider securing an end-user for the lease, which cannot be guaranteed.
For other prospective tenants, execution of any lease remains subject to continued negotiation, technical and commercial diligence, site and power availability review, legal documentation, credit review, financing considerations, internal approvals, and other customary conditions. There can be no assurance that any definitive lease—whether with the global cloud provider or other prospective tenants—will be executed within the anticipated timeframe, or at all, or that any definitive lease, if executed, will be for the capacity, duration or economic terms currently under discussion. Failure to consummate these leases could result in unused capacity, decreased revenues, and hindered execution of our growth strategy. Even if definitive leases are executed, they may be for less capacity, shorter duration, or on less favorable economic terms than we currently anticipate, which could materially and adversely affect our business, financial condition, and results of operations.
Risks Related to the Digital Infrastructure and HPC Industries
The digital infrastructure and high-performance computing industries in which One Blockchain operates are characterized by rapidly evolving technology, shifting customer requirements, and increasing demand for power-dense hosting capacity. If One Blockchain fails to adapt its service offerings, maintain competitive pricing, or meet the operational expectations of its customers, it may not be able to attract new customers or retain existing customers, and its business and results of operations may be adversely affected.
The digital infrastructure and high-performance computing industries in which One Blockchain operates are characterized by rapid technological evolution, shifting customer requirements, frequent introduction of new service models, and the ongoing emergence of new industry standards and practices. One Blockchain’s success will depend, in part, on its ability to respond to these changes in a cost-effective and timely manner. Increasing demand for power-dense hosting capacity — driven by the growth of artificial intelligence, machine learning, and other computationally intensive workloads — requires data center operators to continuously invest in facility upgrades, power infrastructure, cooling technology, and operational capabilities to remain competitive.
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If One Blockchain is unable to generate sufficient revenue or raise adequate capital to fund these investments, its ability to improve its service offerings and maintain competitive infrastructure may be restricted or delayed. In such circumstances, One Blockchain may not be able to keep pace with evolving market requirements or satisfy customer expectations, which could materially and adversely affect its results of operations.
Furthermore, the markets for data center hosting and digital infrastructure services are subject to ongoing technological change, including advances in computing hardware, power efficiency, cooling systems, and workload optimization. New developments in computing architecture, energy management, or alternative infrastructure models could reduce demand for One Blockchain’s current service offerings or render its existing facility configurations less competitive. If One Blockchain is unable to anticipate market trends, adapt its infrastructure to support emerging workload types, or offer services that meet the evolving needs of its customers, its business, results of operations, and financial condition could be materially and adversely affected.
Due to the unregulated nature and lack of transparency surrounding the operations of digital asset platforms, which may experience fraud, manipulation, security failures or operational problems, as well as the wider Bitcoin market, the value of Bitcoin and, consequently, the value of the BlockchAIn common shares may be adversely affected, causing losses to Shareholders.
Disruptions at digital asset trading platforms, including fraud, hacking, or business failures, have historically caused significant declines in digital asset prices. As a hosting provider, we do not operate trading platforms or hold digital assets; however, platform failures that reduce digital asset prices could adversely affect our customers’ mining economics and their ability to maintain hosting arrangements.
The price of Bitcoin is highly volatile, and decreases in Bitcoin’s price could adversely affect our business, financial condition, and results of operations.
The Company does not hold, mine, or transact in Bitcoin or any other digital assets. However, because a significant portion of our hosting revenue is derived from customers engaged in digital asset mining, our business is indirectly exposed to fluctuations in the market price of Bitcoin. Bitcoin prices have historically been volatile and are affected by a range of factors, including market sentiment, adoption rates, regulatory developments, macroeconomic conditions, the actions of large holders, and events affecting the broader digital asset market.
The profitability of our digital asset mining customers is directly tied to the market price of Bitcoin. When Bitcoin prices are high or rising, mining operations tend to be more profitable, which supports demand for hosting capacity and strengthens our customers’ ability to meet their hosting fee obligations. Conversely, sustained declines in the price of Bitcoin may compress our customers’ margins, reduce demand for hosting services, lead to contract terminations or non-renewals, delay facility build-outs by prospective customers, or impair our customers’ ability to pay hosting fees on a timely basis.
Bitcoin prices are influenced by numerous factors beyond our control, including supply dynamics inherent in the Bitcoin protocol (such as the fixed 21 million supply cap and periodic halving events), shifts in investor sentiment, the actions of significant holders or trading platforms, regulatory developments in the United States and abroad, and broader macroeconomic conditions. There is no assurance that the price of Bitcoin will remain at levels sufficient to sustain demand for our hosting services, or that Bitcoin prices will not decline significantly in the future.
In addition, fluctuations in the price of Bitcoin may have an impact on the trading price of BlockchAIn common shares, even before any effect is reflected in our financial performance, to the extent that investors view our business as correlated with digital asset market conditions. A sustained decline in Bitcoin prices could require us to reduce hosting rates, accept lower facility utilization, or pursue accelerated diversification into non-mining workloads, any of which could materially and adversely affect our revenue, profitability, and results of operations.
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The development of blockchain technology and cryptocurrency is in its early stage and any adverse development in the cryptocurrency or blockchain market could adversely affect One Blockchain’s business and results of operations.
Our business is dependent on continued demand for data center hosting services from customers engaged in digital asset mining and, increasingly, AI and high-performance computing workloads. The digital asset industry remains in a relatively early stage of development, and there can be no assurance that demand for third-party hosting services from digital asset mining operators will continue at current levels or grow over time.
Adverse developments in the digital asset industry, the broader data center market, or the specific markets served by our customers could lead to a decrease in demand for our hosting capacity, which could have a material adverse effect on our business, financial condition, and results of operations. Factors that could reduce demand for our services include:
| ● | a decline in the adoption, use, or market value of Bitcoin and other digital assets, which could reduce the profitability and hosting demand of our mining customers; |
| ● | increased regulatory costs or restrictions applicable to digital asset mining or data center operations; |
| ● | oversupply of hosting capacity in the markets we serve, resulting in pricing pressure or reduced utilization; |
| ● | a transition by our customers from third-party hosting providers to self-owned and self-operated facilities; |
| ● | the development of new technologies or industry standards that reduce demand for our current hosting configurations or render our facility infrastructure less competitive; |
| ● | constraints on the availability or affordability of current-generation mining hardware or specialized compute equipment for our customers; and |
| ● | increases in Bitcoin network mining difficulty or decreases in digital asset prices that compress our customers’ operating margins and reduce their ability to sustain hosting arrangements. |
In addition, the digital asset ecosystem remains subject to evolving regulatory frameworks across multiple jurisdictions. Certain jurisdictions have restricted or may restrict the use, exchange, or mining of digital assets, which could constrain the growth of our customer base. If the digital asset mining industry contracts, or if our customers are unable to operate profitably, demand for our hosting services could decline and our business, results of operations, and financial condition could be materially and adversely affected.
Bitcoin network mining economics, including halving events and increases in mining difficulty, could indirectly reduce demand for our hosting services.
The profitability of our digital asset mining customers is affected by factors inherent in the Bitcoin protocol, including periodic “halving” events that reduce block rewards and increases in network mining difficulty. The most recent halving occurred in April 2024, reducing the block reward from 6.25 to 3.125 Bitcoins. Mining difficulty has also generally increased over time as more computational power is added to the network. While the Company does not engage in self-mining and derives its hosting revenue from per-kWh fees, these dynamics directly affect our customers’ mining economics. If halvings or difficulty increases are not offset by corresponding increases in Bitcoin price or transaction fees, our customers’ profitability may decline, which could reduce demand for hosting capacity, lead to contract terminations or non-renewals, create downward pressure on hosting rates, or impair our customers’ ability to pay hosting fees on a timely basis. Any sustained compression of our customers’ mining margins could adversely affect our hosting revenue, facility utilization, and results of operations.
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Technological obsolescence of mining equipment could negatively impact our business.
The digital asset mining industry experiences rapid technological advancements, with newer generations of ASIC miners often offering significantly improved efficiency in terms of hash rate per unit of power consumed. As a hosting provider, we do not own or operate mining equipment; however, technological obsolescence of our customers’ equipment directly affects our business. Customers operating older, less efficient hardware may generate insufficient mining revenue to support their hosting fee obligations, increasing the risk of contract termination, non-payment, or reduced demand for hosting capacity. Conversely, newer-generation equipment may require higher power density, enhanced cooling capabilities, or other facility specifications that our existing infrastructure may not support without significant capital investment. Our ability to retain existing customers and attract new ones will depend in part on maintaining facility infrastructure that can accommodate evolving equipment requirements across both digital asset mining and AI/HPC workloads.
Regulatory changes or actions may restrict the use of cryptocurrencies, including Bitcoin, or mining activities in a manner that adversely affects our business.
The legal and regulatory framework governing digital assets and digital asset infrastructure is still developing and subject to significant uncertainty globally and within the United States. Future legislative or regulatory changes, interpretations, or actions could impose new restrictions on digital asset mining operations, including the activities conducted by our hosting customers at our facilities. This could include environmental regulations related to data center energy consumption, zoning or permitting restrictions on high-power computing facilities, taxation policies applicable to digital asset activities, or classifications of digital assets that could affect our customers’ operations. While the Company does not directly mine, hold, or transact in digital assets, regulatory developments that adversely affect our customers’ ability to operate could reduce demand for our hosting services, lead to contract terminations, or constrain our ability to attract new customers. In addition, as data center operations attract increased regulatory attention at both the state and federal level — including with respect to utility rate impacts, water usage, and grid reliability — new compliance requirements could increase our operating costs or limit our ability to expand capacity at existing or future sites.
Changes in digital asset consensus protocols could reduce demand for energy-intensive hosting services.
Certain digital asset networks, including the Bitcoin network, currently employ a Proof-of-Work consensus algorithm that requires significant computing power and electrical energy to validate transactions. Our facility infrastructure is optimized to serve these energy-intensive workloads. However, digital asset networks may adopt alternative consensus mechanisms that substantially reduce or eliminate the need for energy-intensive computation, as the Ethereum network did in September 2022. Should Bitcoin or other major networks transition away from Proof-of-Work, demand for our hosting services from digital asset mining customers could decline significantly. While the Company is actively diversifying its customer base to include AI and high-performance computing workloads that are not dependent on any particular digital asset consensus protocol, a sustained shift away from energy-intensive mining across major networks could adversely affect our hosting revenue, facility utilization, and results of operations.
Risks Related to Our Financial Condition
We have a limited operating history operating as an AI/HPC colocation developer. Our historical financial statements primarily reflect the operations of our legacy digital-asset-mining business.
One Blockchain’s limited operating history may make it difficult for One Blockchain to forecast its business and assess the seasonality and volatility in its business.
While our CLT-01 facility has a history of generating revenue from hosting services, our entry into the AI/HPC market represents new strategic directions. As such, our past performance may not be indicative of our future results in these new business segments. Evaluating our business and prospects is challenging due to our evolving business model and the rapidly changing industries in which we operate. One Blockchain’s revenues may decline for any number of possible reasons, including decreasing market price of cryptocurrencies, increasing competition, declining growth of the cryptocurrency industry, unforeseeable technology innovation, emergence of alternative mainstream cryptocurrencies, or changes in government policies, regulations or general economic conditions. It is also difficult to forecast seasonality and volatility in One Blockchain’s business, and as a result accurately allocating resources including facility capacity, power resources, or human capital to different business lines to achieve the best results in the medium or long term. If One Blockchain’s growth rates decline, investors’ perceptions of One Blockchain’s business and business prospects may be adversely affected and the market price of BlockchAIn common shares could decline. In addition, given the volatile nature of cryptocurrencies and that One Blockchain’s business and financial condition correlate with the market price of cryptocurrencies, it is difficult to evaluate One Blockchain’s business and future prospects based on its limited operating history or historical performance.
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We will require significant capital to fund our growth strategy, and failure to obtain necessary financing on favorable terms, or at all, could adversely affect our growth and operations.
Our planned expansion of our CLT-01 facility, the development of additional planned facilities, and the buildout of HPC capacity along with AI Data Center facilities will require substantial capital investment. While we intend for BlockchAIn’s public listing to improve access to capital markets, there is no guarantee that we will be able to secure sufficient equity or debt financing on terms acceptable to us. Our ability to obtain external financing in the future may be subject to a variety of uncertainties, including our future financial condition, results of operations, cash flows and the liquidity of international capital and lending markets. However, in light of conditions impacting the industry, it may be more difficult for us to obtain equity or debt financing currently and/or in the future. Any indebtedness that we may incur in the future may also contain operating and financial covenants that could further restrict our operations. There can be no assurance that financing will be available in a timely manner or in amounts or on terms acceptable to us or at all. A large amount of bank borrowings and other debt may result in a significant increase in interest expense while at the same time exposing us to increased interest rate risks. Equity financings could result in dilution to our stockholders, and the securities issued in future financings may have rights, preferences and privileges that are senior to those of BlockchAIn common shares. Any failure to raise needed funds on terms favorable to us, or at all, could severely restrict our liquidity as well as have a material adverse effect on our business, financial condition and results of operations. Insufficient funding could force us to delay, scale back, or abandon our growth plans, which would adversely affect our business and competitive position.
Our future financial performance is subject to assumptions and projections that may not materialize.
Our financial outlook and projections are based on various assumptions regarding energy costs, our ability to secure necessary agreements, the successful deployment of new capacity, and market demand for our services. These assumptions are inherently uncertain and subject to numerous business, economic, regulatory, and competitive risks and uncertainties that could cause actual results to differ materially from our expectations.
Our former investment banker may assert rights to participate in, or claim fees from, this offering notwithstanding our position that such rights have been terminated.
We entered into an M&A advisory agreement with a prior investment bank (the “Prior Agreement”) in connection with our recently completed Business Combination. The Prior Agreement granted the investment bank a right of first refusal (“ROFR”) to act as placement agent or underwriter in connection with equity or debt financings for a period of 18 months following the closing of the Business Combination, and a right to receive certain fees if specified investors participate in a financing within 12 months after such closing (the “Tail”). On May 19, 2026, we notified the investment bank that it was our position that due to potential conflicts with FINRA rules, among other things, the ROFR and Tail provisions are unenforceable.
Notwithstanding our position, the prior investment bank may assert that it continues to have enforceable rights and to claim fees in connection with this offering or other future offerings and may seek to enforce such rights or claim fees if certain investors participate in this offering. If the prior investment bank were to pursue such claims and prevail, we could be required to pay damages, fees, or other amounts, which could adversely affect our financial condition or results of operations. Even if we prevail, any such dispute could result in significant expense or distraction to management.
Risks Related to Regulatory Compliance and Other Legal Matters
We are subject to a highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations.
As crypto assets have grown in popularity and in market size, the U.S. regulatory regime – namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the CFTC, FinCEN, and the Federal Bureau of Investigation), and local and foreign governmental organizations, consumer agencies and public advocacy groups have been examining the operations of crypto networks, users and platforms, with a focus on how crypto assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist enterprises, and the safety and soundness of platforms and other service providers that hold crypto assets for users. Many of these entities have called for heightened regulatory oversight, and have issued consumer advisories describing the risks posed by crypto assets to users and investors. For instance, in March 2022, Federal Reserve Chair Jerome Powell expressed the need for regulation to prevent “cryptocurrencies from serving as a vehicle for terrorist finance and just general criminal behavior”. On March 8, 2022, President Joseph R. Biden announced an executive order on cryptocurrencies which seeks to establish a unified federal regulatory regime for cryptocurrencies. On June 28, 2024, the U.S. Department of Treasury and IRS issued a final rule requiring digital asset brokers to report the sales and exchanges of digital assets. On January 23, 2025, President Donald J. Trump issued an executive order, indicating that it is the policy of the Trump Administration to “support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy”. The complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the crypto assets industry 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. 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 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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Additionally, the bankruptcy filings of FTX, the third largest digital asset exchange by volume at the time of its filing, and its affiliated hedge fund Alameda Research LLC, in addition to other bankruptcy filings of crypto companies throughout calendar year 2022, contributed, at least in part, to heightened regulatory scrutiny from U.S. regulatory agencies such as the SEC and CFTC. Increasing regulation and regulatory scrutiny may result in additional costs for us and our management having to devote increased time and attention to regulatory matters, change aspects of our business or result in limits on the utility of Bitcoin. In addition, regulatory developments and/or our business activities may require us to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result in changes to our business, as well as increased costs, supervision and examination. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations may have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.
Although we are not directly connected to the cryptocurrency market events in 2022, developments in the digital asset industry may affect market perception of companies providing infrastructure services to that industry. Ongoing and future regulation and regulatory actions could significantly restrict or eliminate the market for or uses of Bitcoin and/or may adversely affect our business, reputation, financial condition and results of operations.
Our interactions with a blockchain may expose us to specially designated nationals (“SDN”) or blocked persons or cause us to violate provisions of law that did not contemplate distributed ledger technology.
The OFAC requires us to comply with its sanction program and not conduct business with persons named on its SDN list. However, because of the pseudonymous nature of blockchain transactions, we may, inadvertently and without our knowledge, engage in transactions with persons named on OFAC’s SDN list. Our internal policies prohibit any transactions with such SDN individuals, but we may not be adequately capable of determining the ultimate identity of the individual with whom we data mining-related products and services. In addition, in the future, OFAC or another regulator may require us to screen transactions for OFAC addresses or other bad actors before including such transactions in a block, which may increase our compliance costs, decrease our anticipated transaction fees and lead to decreased traffic on our network. Any of these factors, consequently, could have a material adverse effect on our business, prospects, financial condition, and operating results.
Further, if certain of our customers or stockholders become the subject or target of applicable sanctions laws, we may be unable to engage in any further transactions or dealings with such persons, including making any distributions of dividends or other payments, and may be required to satisfy certain blocking or reporting obligations under the relevant sanctions laws. Failure to take all such action as necessary or appropriate under applicable sanctions laws could subject us to significant fines or other penalties and have a material adverse effect on our business, financial condition, and results of operations.
Our hosting customers operate equipment that interacts with blockchain networks, including the Bitcoin network. While the Company does not directly operate blockchain nodes, validate transactions, or maintain copies of any blockchain ledger, our role as a hosting provider for customers engaged in blockchain-related activities could expose us to regulatory scrutiny or reputational risk in the event that any customer’s activities are found to violate applicable laws. We seek to mitigate this risk through customer due diligence and contractual provisions, but there can be no assurance that these measures will be sufficient to prevent all potential exposure.
We may be involved in legal and other disputes from time to time arising out of our operations, including disputes with our suppliers, customers or employees. Our vendors and customers are also subject to risks relating to litigation and disputes, which could adversely affect our business or reputation.
We may from time to time be involved in disputes with various parties arising out of our operations, including electricity suppliers, business partners, customers or employees. These disputes may lead to protests or legal or other proceedings and may result in damage to our reputation, substantial costs and diversion of resources and management’s attention from our core business activities. In addition, we may encounter compliance issues with regulatory bodies in the course of our operations, in respect of which we may face administrative proceedings or unfavorable rulings that may result in liabilities and cause delays or disruptions to our services. We may be involved in other proceedings or disputes in the future that may have a material adverse effect on our business, financial condition, results of operations or cash flows. Furthermore, our vendors and customers, some of which are market players in the crypto industry, are also subject to risks relating to litigation and disputes. Such litigation and disputes are beyond our control and may adversely affect our business and reputation.
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We may increasingly become a target for public scrutiny, including complaints to regulatory agencies, negative media coverage, and malicious allegations, all of which could severely damage our reputation and materially and adversely affect our business and prospects.
Certain features of cryptocurrency networks, such as decentralization, independence from sovereignty and anonymity of transactions, create the possibility of heightened attention from the public, regulators and the media. Heightened regulatory and public concerns over cryptocurrency-related issues may subject us to additional legal and social responsibilities and increased scrutiny and negative publicity over these issues. From time to time, these allegations, regardless of their veracity, may result in consumer dissatisfaction, public protests or negative publicity, which could result in government inquiry or substantial harm to our brand, reputation and operations. Moreover, as our business expands and grows, we may be exposed to heightened public scrutiny in jurisdictions where we already operate as well as in new jurisdictions where we may operate. There is no assurance that we would not become a target for regulatory or public scrutiny in the future or that scrutiny and public exposure would not severely damage our reputation as well as our business and prospects.
Our insurance coverage is limited and may not be adequate to cover potential losses and liabilities. A significant uninsured loss or a loss in excess of our insurance coverage could have a material adverse effect on our results of operations and financial condition.
Risks associated with our business and operations include, but are not limited to, business interruption due to regulatory changes, power shortages or network failure, product liability claims and losses of key personnel, any of which may result in significant costs or business disruption. In line with general market practice, we do not have any business liability or disruption insurance to cover our operations. However, our current insurance policies may be insufficient in the event of a prolonged or catastrophic event. The occurrence of any such event that is not entirely covered by our insurance policies may result in interruption of our operations, subject us to significant losses or liabilities and damage our reputation as a provider of business continuity services. In addition, the property and transit insurance policies we have obtained may not cover all risks associated with our business The occurrence of certain incidents including severe weather, earthquake, fire, war, power outages, flooding and the consequences resulting from them may not be covered by our insurance policies adequately, or at all. If we were subject to substantial liabilities that were not covered by our insurance, we could incur costs and losses that could materially and adversely affect our results of operations and financial condition.
Digital asset mining activities are energy-intensive, which may restrict the geographic locations of data center hosting facilities and have a negative environmental impact.
Digital asset mining activities are inherently energy-intensive and electricity costs account for a significant portion of the overall mining costs. The availability and cost of electricity will restrict the geographic locations of mining activities. Any shortage of electricity supply or increase in electricity cost in a jurisdiction may negatively impact the viability and the expected economic return for Digital asset mining activities in that jurisdiction, which may in turn decrease the demand of our data center hosting facilities in that jurisdiction.
In addition, the significant consumption of electricity may have a negative environmental impact, including contribution to climate change, which may give rise to public opinion against allowing the use of electricity for Digital asset mining activities or government measures restricting or prohibiting the use of electricity for Digital asset mining activities. Any such development in the jurisdictions where we sell digital asset mining-related products and services could have a material and adverse effect on our business, financial condition and results of operations.
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Our business operation may have an intrinsic need for governmental interactions, and are therefore subject to higher corruption risks.
Our operations require significant power resources and related infrastructure to support our hosting services, and the industries we serve — including digital asset mining and high-performance computing — operate under a rapidly evolving regulatory landscape. As a data center operator with substantial energy requirements, we interact with government authorities and utility providers in connection with power procurement, permitting, zoning, and environmental compliance. As we expand our operations to additional sites, these interactions may increase in frequency and complexity. Any failure to comply with applicable anti-corruption or anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, in connection with these activities could expose the Company to legal liability, regulatory penalties, and reputational harm.
We may require certain approvals, licenses, permits and certifications to operate. Any failure to obtain or renew any of these approvals, licenses, permits or certifications could materially and adversely affect our business and results of operations.
In accordance with the laws and regulations in each jurisdiction in which we may operate, we may be required to maintain certain approvals, licenses, permits and certifications. Complying with such laws and regulations may require substantial expense, and any non-compliance may expose us to liability. In the event of non-compliance, we may have to incur significant expenses and divert substantial management time to rectify the incidents. In the future, if we fail to obtain all the necessary approvals, licenses, permits and certifications, we may be subject to fines or the suspension of operations, which could materially and adversely affect our business and results of operations. We may also experience adverse publicity arising from non-compliance with government regulations, which would negatively impact our reputation.
There is no assurance that we will be able to fulfill all the conditions necessary to obtain the required government approvals, or that relevant government officials will always, if ever, exercise their discretion in our favor, or that we will be able to adapt to any new laws, regulations and policies. There may also be delays on the part of government authorities in reviewing our applications and granting approvals, whether due to the lack of human resources or the imposition of new rules, regulations, government policies or their implementation, interpretation and enforcement. If we are unable to obtain, or experience material delays in obtaining, necessary government approvals, our operations may be substantially disrupted, which could materially and adversely affect our business, financial condition and results of operations.
We may be subject to fines and other administrative penalties resulting from the operation of our business, which could materially and adversely affect our business, financial condition and results of operation.
We are subject to regulation by the multiple government authorities in regions where we have presence, and various jurisdictions may from time to time adopt laws, regulations or directives that affect our businesses. Moreover, the relevant regulatory authorities possess significant powers to enforce applicable regulatory requirements in the event of our non-compliance, including the imposition of fines, sanctions or the revocation of licenses or permits to operate our business. Regulations have impacted or could impact, among others, the nature of and scope of offerings we are able to make available, the pricing of offerings on our platform, our relationship with, and incentives, fees and commissions provided to or charged from our vendors, and our ability to operate in certain segments of our business. We expect that our ability to manage our relationships with regulators in each of our markets, as well as existing and evolving regulations will continue to impact our results in the future. Any misunderstanding or misinterpretation of applicable laws or regulations could subject us to, among others, non-compliance investigation by the government authorities. There is no guarantee that we will not face administrative fines or penalties concerning our operations, which could have a material adverse impact on our results of operation.
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Regulatory changes or actions may restrict the use of cryptocurrencies or the operation of cryptocurrency networks in a manner that may require us to cease certain or all operations, which could have a material adverse effect on our business, financial condition and results of operations.
The regulatory landscape for digital assets in the United States continues to evolve. Federal agencies, including the SEC, CFTC, and FinCEN, have examined and continue to examine the operations of digital asset networks, market participants, and service providers. State regulators have also initiated actions against entities involved in digital asset activities, including in jurisdictions where we operate or may operate in the future.
The current U.S. administration has expressed support for the responsible growth of digital assets, including through executive orders establishing a Strategic Bitcoin Reserve and the President’s Working Group on Digital Asset Markets. Congress has enacted the GENIUS Act, establishing a federal regulatory framework for stablecoins, and additional legislation such as the CLARITY Act continues to progress. The SEC has launched a Crypto Task Force dedicated to developing a comprehensive regulatory framework for digital assets, and its staff has issued guidance indicating that certain Proof-of-Work mining activities do not involve the offer or sale of securities. These developments suggest increasing regulatory clarity for the digital asset industry.
However, there can be no assurance that future regulatory developments — whether at the federal, state, or local level — will be favorable to our business or to the operations of our hosting customers. Regulatory changes could impose new registration, reporting, or compliance requirements on data center operators or hosting providers that serve digital asset mining customers, or could restrict or prohibit digital asset mining activities in jurisdictions where we operate or plan to operate. If our hosting customers are unable to operate due to regulatory restrictions, or if compliance costs increase materially for us or our customers, our hosting revenue, facility utilization, and results of operations could be materially and adversely affected.
Federal or state agencies may impose additional regulatory burdens on our business. Changing laws and regulations and changing enforcement policies and priorities have the potential to cause additional expenditures, restrictions, and delays in connection with our business operations.
Federal and state laws and regulations may be subject to change or changes in enforcement policies or priorities, including changes that may result from changes in the political landscape and changing technologies. Future legislation and regulations, changes to existing laws and regulations, or interpretations thereof, or changes in enforcement policies or priorities, could require significant management attention and cause additional expenditures, restrictions, and delays in connection with our business operations.
Increasing scrutiny and changing expectations from investors, lenders, customers, government regulators and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.
Companies across all industries and around the globe may face increasing scrutiny relating to their ESG policies. Investors, lenders and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. Although the federal government in the United States has indicated a reversal of previous climate and ESG-related initiatives, regulatory initiatives to impose climate and ESG-reporting requirements have occurred and continue to be expected at the state and international levels and may resurface in the United Stated in the future. The increased focus and activism related to ESG may hinder our access to capital, as investors and lenders may reconsider their capital investment allocation as a result of their assessment of our ESG practices. If we do not adapt to or comply with investor, lender or other industry shareholder expectations and standards and potential government regulations, which are evolving but may relate to the suitable deployment of electric power, or which are perceived to have not responded appropriately to the growing concern for ESG issues, our reputation may suffer which would have a material adverse effect on our business, financial condition and results of operations.
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Risks Related to BlockchAIn
The Company’s stock price is expected to be volatile, and the market price of its common stock may drop following the Business Combination.
The market price of BlockchAIn common stock could be subject to significant fluctuations following the Business Combination. Market prices for securities of technology companies have historically been particularly volatile. Some of the factors that may cause the market price of BlockchAIn common stock to fluctuate include:
| ● | variations in the Company’s financial results or those of companies that are perceived to be similar to the Company; |
| ● | announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by the Company or the Company’s competitors; |
| ● | significant lawsuits, including stockholder litigation; |
| ● | additions or departures of key employees or management personnel; |
| ● | general economic, industry and market conditions; and |
| ● | failure to maintain compliance with listing requirements of the NYSE American. |
Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of BlockchAIn common stock.
In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm the Company’s profitability and reputation.
The Company will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
The Company will incur significant legal, accounting and other expenses that One Blockchain did not incur as a private company, including costs associated with public company reporting requirements. The Company will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and the NYSE American. These rules and regulations are expected to increase the Company’s legal and financial compliance costs and to make some activities more time-consuming and costly. The executive officers and other personnel of the Company will need to devote substantial time regarding operations as a public company and compliance with applicable laws and regulations. These rules and regulations may also make it difficult and expensive for the Company to obtain directors’ and officers’ liability insurance. As a result, it may be more difficult for the Company to attract and retain qualified individuals to serve on the BlockchAIn Board or as executive officers of the Company, which may adversely affect investor confidence in the Company and could cause the Company’s business or stock price to suffer.
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BlockchAIn’s management has limited experience with compliance with public company obligations and the Company’s resources may not be sufficient to fulfill its public company obligations.
Following the completion of the Business Combination, the Company became subject to various regulatory requirements, including those of the SEC and the NYSE American. These requirements include record keeping, financial reporting, and corporate governance rules and regulations. The Company’s management team will consist of certain executive officers of One Blockchain prior to the Business Combination. Such executive officers have limited experience with compliance with public company obligations and, historically, One Blockchain has not had the resources typically found in a public company. The Company’s internal infrastructure may not be adequate to support its reporting obligations, and the Company may be unable to hire, train or retain necessary staff and may initially be reliant on engaging outside consultants or professionals to overcome its lack of experience. The Company’s business could be adversely affected if its internal infrastructure is inadequate, it is unable to engage outside consultants, or is otherwise unable to fulfill its public company obligations.
Anti-takeover provisions in the Company charter documents and under Delaware law could make an acquisition of the Company more difficult and may prevent attempts by the Company stockholders to replace or remove the Company management.
The Company’s charter documents are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
| ● | before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
| ● | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| ● | on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2∕3% of the outstanding voting stock that is not owned by the interested stockholder. |
In general, Section 203 defines a “business combination” to include the following:
| ● | any merger or consolidation involving the corporation and the interested stockholder; |
| ● | any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
| ● | subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| ● | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; and |
| ● | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation. |
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In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
A Delaware corporation may “opt out” of these provisions with an express provision in its certificate of incorporation. We have not opted out of these provisions, which may, as a result, discourage or prevent mergers or other takeover or change of control attempts of the Company. However, the Company did not opt out of these provisions.
In addition, the BlockchAIn Amended and Restated Certificate of Incorporation and the BlockchAIn Amended and Restated Bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of our company or changing the BlockchAIn Board and management. The BlockchAIn Amended and Restated Certificate of Incorporation provides that a majority of the BlockchAIn Board will have the sole authority to establish the number of directors and fill any vacancies and newly created directorships, subject to the rights of any holders of Company preferred stock to elect directors. These provisions may prevent a stockholder from increasing the size of the BlockchAIn Board and gaining control of the BlockchAIn Board by filling the resulting vacancies with its own nominees. In addition, the BlockchAIn Amended and Restated Certificate of Incorporation provides that in addition to any other vote required by law, no member of the BlockchAIn Board may be removed from office by our stockholders without the approval of not less than the majority of the total voting power of all of our outstanding shares of capital stock then entitled to vote in the election of directors, and only for “cause”. Furthermore, the BlockchAIn Board is a “classified” board, with staggered three-year terms, which may also delay or prevent a change in management or control. The BlockchAIn Amended and Restated Certificate of Incorporation provides that stockholders may not take action by written consent. The BlockchAIn Amended and Restated Bylaws also do not provide its stockholders with the power to call a special meeting of stockholders and may contain certain advance notice provisions for the submission and presentation of stockholder meeting proposals or director nominations at a stockholder meeting, which may limit the ability of stockholders to influence the composition and business decisions of our management.
The BlockchAIn Amended and Restated Bylaws also provide that we may agree with any stockholders to restrict the sale or other disposal of our stock owned by such stockholders.
In addition, the BlockchAIn Amended and Restated Certificate of Incorporation authorizes the BlockchAIn Board to issue up to 100,000,000 shares of “blank-check” preferred stock in one or more series as solely determined by the BlockchAIn Board, and to have the voting powers, preferences and relative participation, optional and special rights and qualifications, limitations and restrictions thereof as solely determined by the BlockchAIn Board without further action by the stockholders. These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any Company preferred stock could diminish the rights of holders of existing shares, and therefore could reduce the value of such shares. In addition, specific rights granted to future holders of Company preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of the BlockchAIn Board to issue Company preferred stock could make it more difficult, delay, discourage, prevent or make it costlier to acquire or effect a change in control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the value of BlockchAIn securities.
Furthermore, the holders of the BlockchAIn common stock will not have cumulative voting rights in the election of its directors. The combination of the anticipated ownership by a few stockholders of the majority of BlockchAIn’s issued and outstanding common stock and lack of cumulative voting may make it more difficult for other stockholders to replace the BlockchAIn Board or for a third party to obtain control of the Company by replacing the BlockchAIn Board.
The Company may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002 that will be applicable to the Company after the Business Combination.
Following the Business Combination, the Company is subject to Section 404. The standards required for a public company under Section 404 are significantly more stringent than those required of One Blockchain as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to the Company after the Business Combination. If management is not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, it may not be able to assess whether its internal control over financial reporting is effective, which may subject the Company to adverse regulatory consequences and could harm investor confidence and the market price of BlockchAIn common shares.
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Future sales of shares by existing stockholders could cause the Company stock price to decline.
If existing Signing Day Sports Stockholders and One Blockchain Securityholders sell, or indicate an intention to sell, substantial amounts of BlockchAIn common shares in the public market after the lock-up and other legal restrictions on resale, the trading price of the BlockchAIn common stock could decline.
The Lock-Up Agreements entered into by certain Signing Day Sports Stockholders and One Blockchain Securityholders prior to the Closing provide that the BlockchAIn common stock, including, as applicable, shares received in the Business Combination and issuable upon exercise of certain options, will be subject to lock-up restrictions for a six-month period after the Closing, subject to limited exceptions. Upon expiration of such lockup restrictions, such BlockchAIn common shares will be eligible for sale in the public market, subject to volume limitations under Rule 144 under the Securities Act, and various vesting agreements. If these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of BlockchAIn common stock could decline.
The BlockchAIn Amended and Restated Certificate of Incorporation designates the Court of Chancery in the State of Delaware as the exclusive forum for certain types of actions and proceedings that the Combined Company’s stockholders may initiate, which could limit the Company’s stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or the Company’s directors, officers or employees.
The BlockchAIn Amended and Restated Certificate of Incorporation provides that, subject to limited exceptions, the state and federal courts within the State of Delaware will be exclusive forums for any:
| ● | derivative action or proceeding brought on the Company’s behalf; |
| ● | action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors, officers or other employees to the Company or the Company’s stockholders; |
| ● | action asserting a claim against the Company arising pursuant to any provision of the DGCL or the BlockchAIn Amended and Restated Certificate of Incorporation or bylaws; or |
| ● | any action asserting a claim against the Company that is governed by the internal affairs doctrine. |
If any such action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the federal securities laws, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum.
Any person or entity purchasing or otherwise acquiring any interest in shares of the Company’s capital stock shall be deemed to have notice of and to have consented to the provisions of the Company’s bylaws described above. However, no such person or entity shall be deemed to have waived any right of action against the Company or its officers or directors pursuant to the federal securities laws. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or the Company’s directors, officers or other employees, which may discourage such lawsuits against the Company and the Company’s directors, officers and employees. Alternatively, if a court were to find these provisions of its bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, the Company may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect the Company’s business and financial condition.
The exclusive forum provision of the BlockchAIn Amended and Restated Certificate of Incorporation would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
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As an emerging growth company, BlockchAIn cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make BlockchAIn common shares less attractive to investors.
BlockchAIn is an emerging growth company as defined in the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to obtain an assessment of the effectiveness of BlockchAIn’s internal controls over financial reporting from its independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. BlockchAIn cannot predict if investors will find its shares less attractive because it will rely on these exemptions. If some investors find BlockchAIn’s shares less attractive as a result, there may be a less active market for BlockchAIn’s shares and its share price may be more volatile.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. BlockchAIn intends to take advantage of the benefits of this extended transition period, for as long as it is available. As a result, BlockchAIn’s financial statements may not be comparable to those of companies that comply with such new or revised accounting standards.
Pursuant to the JOBS Act, BlockchAIn’s independent registered public accounting firm will not be required to attest to the effectiveness of BlockchAIn’s internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as it is an emerging growth company.
Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of BlockchAIn’s internal control over financial reporting, starting with the second annual report that it files with the SEC after the consummation of its initial public listing, and generally requires in the same report a report by its independent registered public accounting firm on the effectiveness of its internal control over financial reporting. However, as an emerging growth company, BlockchAIn’s independent registered public accounting firm will not be required to attest to the effectiveness of its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until it is no longer an emerging growth company. BlockchAIn could be an emerging growth company for up to five years.
We are a “smaller reporting company” under the U.S. federal securities laws, and the reduced reporting requirements applicable to smaller reporting companies could make our common stock less attractive to investors.
We are a “smaller reporting company” under U.S. federal securities laws. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Investors may not find our common stock attractive because we may rely on these exemptions and reduced disclosures. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
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 June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
BlockchAIn’s ability to be successful following the Business Combination will depend upon the efforts of its officers, and the loss of such persons could negatively impact the operations and profitability of the post-Business Combination business.
BlockchAIn’s ability to be successful following the Business Combination will be dependent upon the efforts of certain key personnel of BlockchAIn. Although the parties expect key personnel to remain with BlockchAIn following the Business Combination, there can be no assurance that they will do so. It is possible that BlockchAIn will lose some key personnel, the loss of which could negatively impact the operations and profitability of BlockchAIn. Furthermore, following the Closing, certain of the key personnel of BlockchAIn may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause BlockchAIn to have to expend time and resources helping them become familiar with such requirements.
The Business Combination will result in a limitation on Signing Day Sports’ ability to utilize its net operating loss carryforwards.
As of December 31, 2025 and 2024, Signing Day Sports had approximately $25,761,307 and $18,060,708 of federal net operating loss carryforwards available to offset future taxable income. Under current tax law, the federal net operating losses generated do not expire and may be carried forward indefinitely. Under Section 382 of the Code, use of Signing Day Sports’ net operating loss carryforwards (“NOLs”) will be limited as a result of the Business Combination and therefore its ability to utilize its NOLs and certain credit carryforwards remaining at the effective time of the Business Combination will be limited. The limitation will be determined by the fair market value of the Signing Day Sports common stock outstanding prior to the ownership change, multiplied by the applicable federal rate, specifically the long-term tax-exempt rate for the period increased by any recognized built-in gains. Limitations imposed on Signing Day Sports’ ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs.
The Company may become involved in securities class action litigation that could divert management’s attention and harm the Company’s business and insurance coverage may not be sufficient to cover all costs and damages.
In the past, securities class action or shareholder derivative litigation often followed certain significant business transactions, such as the sale of a business division or announcement of a merger. The Company may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the Company’s business.
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MARKET AND INDUSTRY DATA
Certain information contained in this registration statement relates to or is based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we believe these third-party sources to be reliable as of the date of this registration statement, we have not independently verified the market and industry data contained in this registration statement or the underlying assumptions relied on therein. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source. Notwithstanding the foregoing, we are liable for the information provided in this registration statement. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section of this registration statement titled “Risk Factors”. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
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USE OF PROCEEDS
We estimate that the net proceeds we will receive from the sale of securities in this Offering, after deducting underwriting discounts and commissions and estimated expenses payable by us, will be approximately $55.8 million (or $67.6 million if the underwriters exercise the option to purchase additional shares in full), at the assumed public offering price of $3.61 per share of Common Stock, which represents the closing price of our common stock on the NYSE American on May 28, 2026, assuming no sale of Pre-funded Warrants.
We currently intend to use the net proceeds from this offering for working capital, capital expenditures relating to growing our business, and general corporate purposes. This expected use of proceeds from this Offering represents our intentions based upon our current plans and prevailing business conditions, which could change in the future as our plans and prevailing business conditions evolve. The amounts and timing of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations. As a result, we will retain broad discretion in the allocation of the net proceeds of this Offering.
A $1.00 increase (decrease) in the assumed public offering price of $3.61 per share would increase (decrease) the net proceeds to us from this Offering by approximately $71.4 million, assuming the number of shares of common stock offered by us, as set forth on the cover of this prospectus, remains the same and assuming no sale of Pre-funded Warrants and, after deducting underwriting discounts and commissions and estimated expenses payable by us. An increase (decrease) of 1,000,000 in the number of shares of common stock offered by us in this Offering, would increase (decrease) the net proceeds to us from this Offering by approximately $3.4 million, assuming the public offering price of $3.61 per share remains the same and assuming no sale of Pre-funded Warrants and, after deducting underwriting discounts and commissions and estimated expenses payable by us. The information above is illustrative only and will change based on the actual public offering price and other terms of this Offering determined at pricing.
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CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2026 as follows:
| ● | on an actual basis; and |
| ● | on an as adjusted basis to reflect the issuance and sale by us of 16,620,498 shares of Common Stock in this Offering at the assumed public offering price of $3.61 per share of Common Stock (which is the last reported sale price of our common stock on the NYSE American on May 28, 2026) and assuming no exercise of the underwriters’ over-allotment option and no sale of Pre-funded Warrants, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
The information below is illustrative only. Our capitalization following the closing of this Offering will change based on the actual public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included herein.
| March 31, 2026 | ||||||||
| Actual (Unaudited) | As Adjusted (Unaudited) | |||||||
| Cash | $ | 1,251,712 | $ | 57,051,712 | ||||
| Total Liabilities | 9,079,937 | 9,079,937 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common Stock, $0.0001 par value; 1,100,000,000 shares authorized; 37,646,133 shares issued and outstanding at March 31, 2026 | 3,765 | 5,427 | ||||||
| Preferred stock, $0.0001 par value; 100,000,000 shares authorized; no shares issued and outstanding as of March 31, 2026 | - | - | ||||||
| Additional Paid-in Capital | 27,446,674 | 83,245,012 | ||||||
| Retained Earnings (Accumulated Deficit) | (273,198 | ) | (273,198 | ) | ||||
| Total Stockholders’ Equity | 27,177,241 | 82,977,241 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 36,257,178 | $ | 92,057,178 | ||||
The table above is based on 37,646,133 shares of common stock outstanding as of March 31, 2026; assumes no exercise of the underwriters’ option, no sale of Pre-funded Warrants; and also excludes as of March 31, 2026, the following:
| ● | 4,003,586 shares of common stock, in the aggregate (subject to adjustment) issuable only upon achievement of the EBITDA milestone for the fiscal year ended December 31, 2026, in connection with the earn-out provisions set forth in the Business Combination Agreement; |
| ● | 184,173 shares of common stock, in the aggregate, issuable to the One Blockchain securityholders and Maxim; |
| ● | 7,526,299 shares of common stock and available for grant and issuance under our Equity Incentive Plan; |
| ● | 566 shares of common stock issuable upon the exercise of options assumed from Signing Day Sports in connection with the Business Combination; and |
| ● | 1,904 shares of common stock issuable upon the exercise of warrants assumed from Signing Day Sports in connection with the Business Combination. |
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DILUTION
If you invest in our shares of common stock in this Offering, your investment will be immediately and substantially diluted to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after giving effect to the Offering.
Our net tangible book value as of March 31, 2026 was $3.348 million, or approximately $0.09 per share. Net tangible book value per share represents our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding.
As adjusted net tangible book value dilution per share of common stock to new investors represents the difference between the amount per share of common stock that is paid by investors in the Offering and the net tangible book value per share of common stock immediately after completion of the Offering. After giving effect to the Offering and our sale of common stock and Pre-funded Warrants in the Offering at an assumed public offering price of $3.61 per share, and after deduction of underwriting discounts and commissions from gross proceeds raised in the offering and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2026 would have been $59.1 million, or $1.09 per share of common stock. This represents an immediate increase in net tangible book value of $1.00 per share of common stock to existing stockholders and an immediate dilution in net tangible book value of $2.52 per share of common stock to investors in the Offering, as illustrated in the following table, based on shares outstanding as of March 31, 2026.
The information below is illustrative only. The dilution caused by this offering will change based on the actual public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included in this prospectus.
| Assumed public offering price per share of common stock | $ | 3.61 | ||||||
| Actual net tangible book value per share as of March 31, 2026 | $ | 0.09 | ||||||
| Increase (decrease) in net tangible book value per share attributable to new investors | $ | 1.00 | ||||||
| Net tangible book value per share after this offering | $ | 1.09 | ||||||
| Immediate dilution in net tangible book value per share to new investors | $ | 2.52 |
Each $1.00 increase (decrease) in the assumed public offering price of $3.61 per share of common stock would increase (decrease) the net tangible book value per share after this Offering by $0.29 per share and the dilution to new investors purchasing common stock in this Offering by $0.71 per share, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriter discounts and commissions and estimated offering expenses payable by us.
If the underwriters exercise their option to purchase additional shares in full, the pro forma as adjusted net tangible book value per share after giving effect to the Offering would be $1.19 per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $1.10 per share to existing stockholders and immediate dilution of $2.42 per share to new investors purchasing our common stock in this Offering.
The table above excludes as of March 31, 2026, the following:
| ● | 4,003,586 shares of common stock, in the aggregate (subject to adjustment) issuable only upon achievement of the EBITDA milestone for the fiscal year ended December 31, 2026, in connection with the earn-out provisions set forth in the Business Combination Agreement; |
| ● | 184,173 shares of common stock, in the aggregate, issuable to the One Blockchain securityholders and Maxim; |
| ● | 7,526,299 shares of common stock and available for grant and issuance under our Equity Incentive Plan; |
| ● | 566 shares of common stock issuable upon the exercise of options assumed from Signing Day Sports in connection with the Business Combination; and |
| ● | 1,904 shares of common stock issuable upon the exercise of warrants assumed from Signing Day Sports in connection with the Business Combination. |
The information discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares of common stock that we offer in this Offering, and other terms of this Offering determined at the time of pricing. The foregoing discussion and table assume (i) no issuance of Pre-funded Warrants, which if sold, would reduce the number of shares of common stock that we are offering on a one-for-one basis and (ii) no exercise by the underwriters of their over-allotment option. In addition, we may choose to raise additional capital due to market conditions or strategic considerations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
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MARKET INFORMATION FOR SECURITIES AND DIVIDEND POLICY
Market Information
Our Common Stock is listed on the NYSE American under the symbol “AIB.”
Holders of Record
As of May 28, 2026, there were 78 holders of record of our Common Stock.
Dividend Policy
We have not paid any cash dividends on shares of our Common Stock to date and do not intend to pay cash dividends. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of our board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with the consolidated financial statements and related notes thereto included elsewhere in this registration statement. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this registration statement, including those set forth in the sections of this registration statement titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”
Overview
BlockchAIn is engaged in data center operations, digital asset infrastructure services and providing hosting services for digital asset mining operators. The Company primarily operates a 65MW data center facility, which we refer to as CLT-01, providing power infrastructure, hosting services, and equipment leasing to customers engaged in blockchain computing, artificial intelligence (AI), and high-performance data processing.
The Company’s core operations include hosting services, leasing space, power capacity, and equipment within its data center facility to customers requiring computing power.
Industry Overview
The global data center industry has experienced sustained growth over the past decade as enterprises increasingly rely on digital infrastructure to support cloud computing, data-intensive applications, and the continued growth of internet traffic. Organizations are generating and processing significantly larger volumes of data, while simultaneously adopting distributed IT architectures designed to improve scalability, performance, and resiliency.
Historically, many enterprises owned and operated dedicated data center facilities to house their IT infrastructure. However, a growing number of organizations are transitioning toward outsourcing their data center requirements to third-party providers in order to reduce capital expenditures, increase operational flexibility, and gain access to specialized infrastructure and connectivity ecosystems. As a result, carrier-neutral multi-tenant data centers (“MTDCs”), which provide colocation space, power, cooling, physical security, and access to multiple network providers and cloud platforms, have become an increasingly important component of global digital infrastructure.
The evolution of enterprise IT architectures is further accelerating demand for third-party data center capacity. Many organizations are deploying hybrid and multi-cloud strategies that combine on-premise infrastructure with services provided by hyperscale cloud platforms such as Amazon Web Services, Microsoft Azure, and Google Cloud. These architectures require secure, high-performance interconnection between enterprise networks, cloud providers, telecommunications carriers, and other digital service platforms. MTDC facilities often serve as critical interconnection hubs that enable these ecosystems.
More recently, the rapid adoption of artificial intelligence (“AI”), machine learning, and other high-performance computing workloads has begun to materially increase demand for data center capacity capable of supporting high-density computing environments. These workloads require substantial power availability, advanced cooling systems, and highly reliable infrastructure, which has increased the importance of purpose-built data center facilities designed to support higher power densities.
The data center outsourcing market was historically dominated by telecommunications carriers that bundled network services with colocation offerings. Over time, the industry has evolved to include a diverse set of providers, including carrier-neutral MTDC operators, hyperscale cloud providers, managed infrastructure and application hosting providers, systems integrators, and enterprise-owned facilities. The global MTDC market remains highly fragmented, with industry estimates suggesting that more than 2,400 companies provide MTDC services worldwide, ranging from large global platform operators to regional and specialized providers.
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Management believes that several long-term industry trends—including enterprise digital transformation initiatives, the continued growth of cloud computing, increasing demand for interconnection between digital platforms, and the emergence of AI-driven workloads—are expected to continue driving demand for outsourced data center infrastructure. In particular, demand for facilities capable of supporting high-power-density computing environments has increased in recent years. Management believes the Company’s operational capabilities and infrastructure position it to participate in the growing demand for data center capacity in its markets. JLL's North America Data Center Report (Year-End 2025) and Goldman Sachs Research (2026) project data center power demand growth at a 21% CAGR, with the sector forecast to represent approximately 11% of U.S. grid consumption by 2030, requiring an estimated $720 billion in supporting grid infrastructure investment. Publicly reported capital expenditure commitments from hyperscale cloud providers aggregate to in excess of $1 trillion through 2028, underscoring the scale of enterprise demand for AI-ready compute infrastructure and the market opportunity available to purpose-built colocation operators.
Expansion Opportunities
We believe we are well positioned for success in the competitive digital asset mining and high-performance computing (“HPC”) markets. We continually evaluate success in the competitive Digital Asset mining and high-performance computing (“HPC”) markets. Along with the continual evaluation of opportunities to leverage our existing data center assets to support artificial intelligence (AI), high-performance computing (HPC), and other emerging data-intensive computing workloads. Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. Our expansion criteria will be dependent on a number of factors, including but not limited to demand from new and existing customers, power availability and capacity, quality of the design, access to networks, clouds and software partners, capacity availability in the current market location, amount of incremental investment required by us in the targeted property, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. The right combination of these factors may be attractive to us. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements in order to bring these properties up to our standards. Property expansion may be in the form of purchases of real property, long-term leasing arrangements or acquisitions. Future purchases, construction or acquisitions may be completed by us or with partners or potential customers to minimize the outlay of cash, which can be significant.
Growth Strategy
Our growth strategy focuses on transitioning from a primarily hosting-based model to expanding our owned and operated infrastructure and diversifying into high-performance computing (“HPC”) markets to enhance revenue generation and profitability.
Key Factors Affecting Our Financial Performance
Market Price of Digital Assets
Our customers who operate in our data center are heavily dependent on the spot price of bitcoin. The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.
Our financial performance and continued growth depend in large part on our customers’ ability to mine for digital assets profitably and to attract customers for our digital asset hosted mining services. Increases in power costs, inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce customers’ operating margins, impact our ability to attract customers for our services, may harm our growth prospects and could have a material adverse effect on our business, financial condition and results of operations. Over time, we have observed a positive trend in the total market capitalization of digital assets, which suggests increased adoption. However, historical trends are not indicative of future adoption, and it is possible that the adoption of digital assets and blockchain technology may slow, take longer to develop, or never be broadly adopted, which would negatively impact our business and operating results.
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Business Mix Shift to HPC
The planned growth of our HPC data center hosting operations business, through increased investment in conversion of several of our bitcoin mining sites to HPC data center hosting sites over the next several years, should gradually reduce our overall exposure to volatility in the spot price of bitcoin as HPC begins to account for a comparatively larger percentage of our financial results. The HPC data center hosting business is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.
Electricity Costs
Electricity cost is the major operating cost for the hosting services provided to customers. The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators. Severe winter weather can increase the cost of electricity and the frequency of curtailments when it results in damage to power transmission infrastructure that reduces the grid’s ability to deliver power. Geopolitical and macroeconomic factors, such as overseas military or economic conflict between states, can adversely affect electricity costs by raising the cost of power generation inputs such as natural gas. Other events out of our control can also impact electricity costs and availability.
Our Competition and Customers
The success of our HPC hosting business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers. Our business environment is constantly evolving. We face significant competition in every aspect of our business, including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access to sites with reliable sources of high power, and evaluating new technology developments in the industry. Presently, the information concerning the activities of digital asset miners may not be readily available as most of the participants in this sector do not publish information publicly, or the information may be unreliable. Published sources of information include “bitcoin.org” and “blockchain.info;” however, the reliability of that information and its continued availability cannot be assured.
In hosting services, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for HPC hosting. This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support HPC hosting. Additionally, the modification of some of our data centers to accommodate HPC hosting involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.
We believe that because of our operational high-power data center capacity and the experience, knowledge, capabilities and relationships of our data center development and operations team, we are uniquely qualified to address the current strong demand for high-power data center capacity to support HPC applications successfully.
Recent Developments
Business Combination with Signing Day Sports, Inc.
On May 27, 2025, the Company entered into the BCA with Signing Day Sports, as amended on November 10, 2025 and as further amended on December 22, 2025. Effective March 16, 2026 (the “transaction date”), the Company and SGN completed the business combination under the BCA. Following the closing, the Company is the parent entity of both SGN and One Blockchain LLC, and the Company commenced trading on the NYSE American on March 17, 2026 under the ticker symbol “AIB.”
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The Business Combination was accounted for as a reverse merger. Refer to Note 4 for the impact of the BCA on the condensed consolidated financial statements.
Antbox Asset Acquisition
In May 2025, VCV Digital Infrastructure Holdings, a related party, entered into a purchase agreement to acquire 100% of the equity interest in Blue Ridge Digital Mining, making it a wholly-owned subsidiary. Concurrently with that transaction, the Company entered into a Purchase and Sale Agreement with Blue Ridge Digital Mining to acquire 60 Antbox containers for total contractual consideration of $2,332,000, payable in 24 equal monthly installments of $97,167 beginning August 15, 2025 and ending July 15, 2027. This transaction allowed the Company to restructure its tenancy composition and agreements to optimize profitability and to diffuse customer concentration credit risk by diversifying beyond a single anchor tenant. Management has concluded that the transaction qualifies as an asset acquisition under U.S. GAAP, as substantially all of the fair value is concentrated in a group of similar tangible assets (Antbox containers) based on valuations determined using the cost approach.
Asset Optimization and Container Sales
During the first quarter of 2025, the Company completed the sale of all remaining modular mining containers. These assets had previously been classified as held for sale, and their disposition reflected the Company’s focus on streamlining operations and reallocating resources toward core infrastructure.
Utility Cost Management and True-Up Adjustments
The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes, and timing of adjustments. The annual true-up credit or charge is typically invoiced in Q3 of the following year.
The true-up expense was $262,906 for the three months ended March 31, 2026 and a reduction in expense of $291,717 for the three months ended March 31, 2025. The true-up estimated cost accrual was $734,325 as of March 31, 2026 which is comprised of $471,329 related to the estimated true-up as of December 31, 2025 and the estimated true-up of $262,906 recorded as of March 31, 2026. Since the true-up credit or charge had not yet been received, there had not yet been an actual true-up credit adjustment or charge for the three months ended March 31, 2026 or 2025. Other costs included in cost of revenues include fees for network services and water fees.
Results of Operations - Three Months Ended March 31, 2026 and 2025
Revenues
Revenue for the three months ended March 31, 2026 was $4.9 million, an increase of $0.4 million, or 9%, from $4.5 million for the three months ended March 31, 2025. The increase reflects a change in the customer mix following the Company’s diversification beyond a single anchor tenant, partially offset by capped energy usage and curtailment credits arising from standstill arrangements with the Company’s primary historical customer, Blue Ridge Digital Mining, which reduced billable usage of the Company’s services.
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Costs and Operating Expenses
| Three Months Ended March 31, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Cost of revenues | $ | 4,343,442 | $ | 3,273,322 | $ | 1,070,120 | ||||||
| Gross profit | 569,759 | 1,226,319 | (656,560 | ) | ||||||||
| Gross Margin | 12 | % | 27 | % | ||||||||
Cost of revenue and gross margin. The largest components of our cost of revenues are utility-related expenses, including electricity, bandwidth access and other infrastructure costs. Cost of revenues totaled $4.3 million for the three months ended March 31, 2026, an increase of $1.0 million, or 30%, compared to $3.3 million for the three months ended March 31, 2025.
Gross profit declined to $0.6 million for the three months ended March 31, 2026, compared to $1.2 million for the same period in 2025, a decrease of approximately $0.6 million. Gross margin decreased to approximately 12% for the three months ended March 31, 2026 from approximately 27% for the same period in 2025. Fluctuations in gross profit are largely affected by two principal factors:
| 1. | Pricing. The average effective billing rate can fluctuate due to competitive pricing adjustments in alignment with contract provisions, bitcoin prices, and the evolving mix of customer contracts. However, the average effective billing rate per kWh remained relatively consistent period over period from approximately $0.063 in Q1 2025 to approximately $0.064 in Q1 2026. |
| 2. | Energy costs. While the average effective billing rate remained relatively consistent, the Company’s average per-kWh energy procurement cost increased from approximately $0.046 in Q1 2025 to approximately $0.056 in Q1 2026 under the terms of the Company’s existing energy supply agreement. |
The decrease in gross profit was primarily attributable to increased energy costs, which were not able to be passed through to customers. The decrease in gross profit was partially offset by a modest year-over-year increase in billable energy volume. Total energy volume billed to customers increased to approximately 77 GWh for the three months ended March 31, 2026 from approximately 72 GWh for the three months ended March 31, 2025.
Operating expenses. Total costs and operating expenses were $5.2 million for the three months ended March 31, 2026, or 106% of total revenues, compared to $4.1 million, or 91% of total revenues, for the three months ended March 31, 2025. The increase of $1.1 million, or 27%, was primarily attributable to a $1.0 million increase in cost of revenues reflecting higher per-kWh energy costs and slightly higher billable volume.
Operating (Loss) / Income
Operating loss was $0.3 million for the three months ended March 31, 2026, compared to operating income of $0.4 million for the three months ended March 31, 2025, a swing of approximately $0.7 million. The change was primarily driven by the gross-margin compression discussed above.
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Other Income
There was a small amount of other income for the three months ended March 31, 2026 consisting of interest income, compared to other income of $0.1 million for the three months ended March 31, 2025 primarily attributable to the gain on disposal of assets held for sale recognized during the three months ended March 31, 2025.
Net (Loss) / Income
Net loss was $0.3 million for the three months ended March 31, 2026, compared to net income of $0.5 million for the three months ended March 31, 2025, a swing of approximately $0.8 million from net income to net loss, driven by the items discussed above.
Adjusted EBITDA
Adjusted EBITDA is a key factor in how we assess the operating performance of our data center and develop our growth strategies and expansion decisions. We define Adjusted EBITDA as net income or loss excluding income tax expense, interest income, interest expense, other income and expense items, gain or loss on asset sales, depreciation, amortization and transaction costs, as presented below:
| Three Months Ended March 31, | Change | |||||||||||
| 2026 | 2025 | $ | ||||||||||
| NET (LOSS)/INCOME | $ | (273,198 | ) | $ | 488,778 | $ | (761,976 | ) | ||||
| Add/(Deduct): | ||||||||||||
| Other (income) expense | (4,128 | ) | 5,360 | (9,488 | ) | |||||||
| Depreciation and amortization | 250,101 | 163,172 | 86,929 | |||||||||
| Transaction costs | 1,204,573 | 216,011 | 988,562 | |||||||||
| Reimbursement of transaction costs | (1,330,000 | ) | - | (1,330,000 | ) | |||||||
| (Gain) loss on asset sales | - | (67,714 | ) | 67,714 | ||||||||
| ADJUSTED EBITDA | $ | (152,652 | ) | $ | 805,607 | $ | (958,259 | ) | ||||
Adjusted EBITDA for the three months ended March 31, 2026 was a loss of $0.2 million, a decrease of $1.0 million, or 119%, from Adjusted EBITDA of $0.8 million for the three months ended March 31, 2025.
Results of Operations - Year ended December 31, 2025 (Successor) and for the period from February 8, 2024 to December 31, 2024 (Successor) and for the period from January 1, 2024 to February 7, 2024 (Predecessor).
Revenues
Revenue during the year ended December 31, 2025 (Successor), reflecting revenue from hosting services was $18.5 million, a decrease of $4.4 million, or 19%, from total revenue of $20.8 million for the period from February 8, 2024 to December 31, 2024 (Successor) and $2.1 million for the period from January 1, 2024 to February 7, 2024 (Predecessor). The decrease in revenue is primarily due to a change in the customer mix, and the impact of standstill agreements entered into with the Company’s primary customer, Blue Ridge Digital Mining, which resulted in capped energy usage and curtailment credits, and a resulting decline in the usage of the Company’s services.
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Costs and operating expenses
Cost of revenue and Gross Margin
| Successor | Predecessor | |||||||||||||||
| Year ended December 31, 2025 | Period from February 8, 2024 to December 31, 2024 | Period from January 1, 2024 to February 7, 2024 | Change ($) | |||||||||||||
| Cost of revenues | 15,001,351 | 13,152,550 | 1,567,058 | 281,743 | ||||||||||||
| Gross profit | 3,515,261 | 7,667,453 | 517,262 | (4,669,454 | ) | |||||||||||
| Gross Margin | 19 | % | 37 | % | 25 | % | ||||||||||
The largest components of our cost of revenues are utility-related expenses, including electricity, bandwidth access, and other infrastructure costs. Cost of revenues totaled $15.0 million for the year ended December 31, 2025 (Successor), representing an increase of $0.3 million, or 2%, compared to $14.7 million for the year ended December 31, 2024, which consisted of $13.2 million for the period from February 8, 2024 to December 31, 2024 (Successor), and $1.6 million for the period from January 1, 2024 to February 7, 2024 (Predecessor). While total energy volume billed to customers decreased, overall cost of revenues increased modestly due to higher per-unit energy rates in 2025. The reduction in actual usage partially offset the impact of higher rates.
Gross profit declined to $3.5 million for the year ended December 31, 2025, compared to $8.2 million for the combined periods in 2024, representing a decrease of approximately $4.7 million. Gross margin decreased to approximately 19% for the year ended December 31, 2025, compared to 36% for the combined periods in 2024. The decline was attributable to three principal factors operating concurrently:
| 1. | Volume. Total energy volume billed to customers decreased from approximately 302 GWh in 2024 to approximately 285 GWh in 2025, reflecting reduced hosting capacity utilization as the Company repositioned its customer base toward higher-value AI and HPC workloads. Overall 2025 margin related to volume impact was significantly affected by the extended negotiations with Blue Ridge/Merkle and the transition of the tenants. |
| 2. | Pricing. The average effective billing rate per kWh declined from approximately $0.075 in 2024 to approximately $0.065 in 2025, driven by competitive pricing adjustments and the evolving mix of customer contracts. |
| 3. | Energy costs. The Company’s average per-kWh energy procurement cost increased from approximately $0.0485 in 2024 to approximately $0.0522 in 2025 under the terms of the Company’s existing energy supply agreement. The Company was unable to fully pass through this cost increase to customers during the period. |
In addition, the Company issued hosting service credits to certain customers during the fourth quarter of 2025 in connection with contractual service level provisions. These credits were recorded as a reduction of revenue and are reflected in contract liabilities on the consolidated balance sheets.
Operating Expenses
Total operating expenses were $19.4 million for the year ended December 31, 2025 (Successor), or 105% of total revenues, compared to combined total operating expenses of $17.3 million for the year ended December 31, 2024, consisting of $15.3 million for the period from February 8 to December 31, 2024 (Successor) and $1.9 million for the period from January 1 to February 7, 2024 (Predecessor). The increase of $2.1 million, or 12%, was primarily attributable to an increase of $1.8 million in selling, general and administrative expenses driven by higher professional services expenses incurred in 2025 to support general corporate operations, as well as professional fees related to the transaction with Signing Day Sports. The Company also increased selling, general and administrative costs in the current year related to management fees and site construction maintenance related to its diversification of operations. There was also an increase of $0.3 million in cost of revenues due to increases in energy costs as noted above.
Operating (loss)/income
Operating loss was $0.9 million for the year ended December 31, 2025 (Successor), a decrease of $6.5 million, or 116%, compared to operating income of $5.6 million for the period ended December 31, 2024, which consisted of $5.5 million for the period from February 8, 2024 to December 31, 2024 (Successor) and $0.1 million for the period from January 1, 2024 to February 7, 2024 (Predecessor). This change was primarily driven by lower revenue as well as increases in cost of revenue and professional services expenses as noted above.
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Other income/(expenses)
Total other income, net, for the year ended December 31, 2025 (Successor), was approximately $0.1 million, compared to $0.0 million for the year ended December 31, 2024, which consisted of approximately $0.0 million for the period from February 8, 2024 to December 31, 2024 (Successor), and approximately $0.0 million for the period from January 1, 2024 to February 7, 2024 (Predecessor). The increase of approximately $0.1 million was primarily attributable to the gain on disposal of assets held for sale recognized during the year ended December 31, 2025 (Successor).
Net (loss)/income
For the year ended December 31, 2025 (Successor), net loss was $0.8 million, compared to net income of $5.7 million for the period ended December 31, 2024, which consisted of $5.5 million for the period from February 8, 2024 to December 31, 2024 (Successor) and $0.1 million for the period from January 1, 2024 to February 7, 2024 (Predecessor) representing a swing of approximately $6.5 million from net income to net loss, largely driven by lower revenues and increases in cost of revenue and professional services expenses as noted above.
Adjusted EBITDA
Adjusted EBITDA is a key factor in how we assess the operating performance of our data center and develop growth strategies and expansion decisions. We define adjusted EBITDA as net income excluding income tax expense, interest income, interest expense, other income or expense, gain or loss on asset sales, depreciation, amortization, and transaction costs as presented below:
| Successor | Predecessor | |||||||||||||||
| Year ended December 31, 2025 | Period from February 8, 2024 to December 31, 2024 | Period from January 1, 2024 to February 7, 2024 | Change $ | |||||||||||||
| NET (LOSS)/INCOME | (835,431 | ) | 5,506,904 | 143,407 | (6,485,742 | ) | ||||||||||
| Add/(Deduct): | ||||||||||||||||
| Other (income) expense | 5,359 | (720 | ) | - | 6,079 | |||||||||||
| Depreciation and amortization | 862,305 | 589,516 | 239,330 | 33,459 | ||||||||||||
| Transaction costs | 1,731,016 | 76,250 | - | 1,654,766 | ||||||||||||
| (Gain) loss on asset sales | (67,714 | ) | - | - | (67,714 | ) | ||||||||||
| ADJUSTED EBITDA | 1,695,535 | 6,171,950 | 382,737 | (4,859,152 | ) | |||||||||||
Non-GAAP Financial Measures
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with U.S. GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. We have presented Adjusted EBITDA to provide investors with an additional tool to evaluate our results of operations in a manner that focuses on what management believes to be our core, ongoing business operations. We believe the inclusion of this non-GAAP financial measure allows for meaningful comparisons between the Company’s core business operating results and those of other companies and provides the Company with an important tool for financial and operating decision-making and for evaluating its core business operating results over different periods of time.
Investors should note that the non-GAAP financial measure used by us may not be the same, or calculated in the same manner, as similarly titled measures of other companies. Investors should therefore exercise caution when comparing our non-GAAP financial measures to similarly titled measures of other companies.
Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating income or any other measure of performance derived in accordance with GAAP. Although management utilizes and presents Adjusted EBITDA, we do so only supplementally and do not consider it a substitute for, or superior to, the information provided by GAAP financial results. Adjusted EBITDA is not meant to be considered in isolation and should be read in conjunction with the consolidated financial statements.
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We exclude depreciation and amortization from Adjusted EBITDA because they do not reflect our current or future cash spending levels to support our business and are based on the estimated useful lives of our data center assets, which estimates may vary from actual performance. We also exclude gain or loss on asset sales as it represents profit or loss not meaningful in evaluating current or future operating performance. Additionally, we exclude transaction costs and reimbursement transaction costs, which relate to costs incurred in connection with business combinations and the transaction with Signing Day Sports, including advisory, legal, accounting, valuation and other professional or consulting fees, to enhance comparability of our financial results with our historical operations. The frequency and amount of such charges vary significantly based on the size and timing of the transactions. Future transaction costs will depend on the Company executing additional transactions, which cannot be anticipated or estimated.
Non-GAAP Measure
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. We have presented non-GAAP financial measures to provide members with an additional tool to evaluate our results of operations in a manner that focuses on what management believes to be our core, ongoing business operations. We believe that the inclusion of this non-GAAP financial measure allows for meaningful comparisons between the Company’s core business operating results and those of other companies and provides the Company with an important tool for financial and operating decision making and for evaluating its own core business operating results over different periods of time. In addition, this non-GAAP financial measure provides a better understanding of the overall performance of the business and ability to perform in subsequent periods. We believe that if we did not provide such non-GAAP financial information, members would not have all the necessary data to analyze us effectively.
Investors should note that the non-GAAP financial measure used by us may not be the same non-GAAP financial measure, and may not be calculated in the same manner, as those of other companies. Investors should therefore exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies.
The Company’s adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently. The Company’s adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating (loss) income or any other measure of performance derived in accordance with GAAP. Although management utilizes internally and presents adjusted EBITDA, we only utilize that measure supplementally and do not consider it to be a substitute for, or superior to, the information provided by GAAP financial results.
Accordingly, adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
Our primary non-GAAP financial measure is adjusted EBITDA, which excludes depreciation and amortization expense as these do not reflect our current or future cash spending levels to support our business. In addition, depreciation is also based on the estimated useful lives of our data center. These estimates could vary from actual performance of the asset, are based on historical costs incurred to build out our data center and are not indicative of current or expected future capital expenditures. Therefore, we exclude depreciation from our results of operations when evaluating our operations. We also exclude gain or loss on asset sales as it represents profit or loss that is not meaningful in evaluating the current or future operating performance. Additionally, we exclude transaction costs to enhance the comparability of our financial results to our historical operations. The transaction costs relate to costs we incur in connection with business combinations and the transaction with Signing Day Sports, including advisory, legal, accounting, valuation, and other professional or consulting fees. Such charges generally are not relevant to assessing our long-term performance. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as impairment charges, gain or loss on asset sales and transaction costs are non-core transactions; however, these types of costs may occur in future periods. The Company has determined that all of the above non-recurring adjustments from operations are infrequent. Future transaction costs will depend on the Company executing additional transactions, which cannot be anticipated or estimated. The other costs identified are eliminated upon the consummation of the Merger.
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Adjusted EBITDA during the year ended December 31, 2025, was $1.7 million, a decrease of $4.9 million, or 74%, from adjusted EBITDA of $6.6 million for the year ended December 31, 2024. Our adjusted EBITDA results have decreased over the year in total dollars due to the nature of our business model consisting of one revenue stream and a cost structure which is dependent on the cost of power.
Liquidity and Capital Resources
The Company manages its liquidity through a combination of operating cash flows and related-party financing arrangements. The Company also maintains flexibility through related-party arrangements, including a non-interest-bearing loan receivable from VCV Digital and a standby letter of credit secured by a related party to support energy procurement obligations. Prior to the Business Combination with Signing Day Sports, Inc. on March 16, 2026, the Company also managed liquidity through member contributions; following the closing of the Business Combination, the Company has access to the public capital markets as a NYSE American-listed registrant.
Management believes that the combination of expected operating cash flows, available related-party support, and access to capital markets will be adequate to meet the Company’s obligations and planned expenditures for the foreseeable future.
Cash Flows:
Comparison of Cash Flows for the Three Months Ended March 31, 2026 and 2025
| Three months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash, beginning of year | $ | 15,265 | $ | 131,107 | ||||
| Net cash provided by (used in): | ||||||||
| Operating activities | 1,274,733 | 410,870 | ||||||
| Investing activities | 253,214 | 132,000 | ||||||
| Financing activities | (291,500 | ) | (447,915 | ) | ||||
| Cash, end of the period | $ | 1,251,712 | $ | 226,062 | ||||
Cash was $1.3 million as of March 31, 2026, compared to $0.2 million as of March 31, 2025, an increase of approximately $1.1 million. The increase reflected the net impact of the following cash flow activities:
Operating activities. Net cash provided by operating activities was $1.3 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $0.4 million for the three months ended March 31, 2025, an increase of $0.9 million. The majority of cash provided by operating activities was due to a decrease in accounts receivable of $1.0 million. Although the Company recorded a net loss of $0.3 million in the current period compared to net income of $0.5 million in the prior-year period, operating cash flow also benefited from approximately $0.7 million of non-cash consulting and advisory share consideration recorded in connection with the Business Combination.
Investing activities. There was $0.3 million in cash provided by investing activities for the three months ended March 31, 2026, compared to net cash provided by investing activities of $0.1 million for the three months ended March 31, 2025. Cash provided in the current period is due to the cash acquired in reverse merger. The prior period reflected $0.1 million of proceeds from the sale of assets previously classified as held for sale; there were no material investing transactions during the current period.
Financing activities. Net cash used in financing activities was $0.3 million for the three months ended March 31, 2026, compared to net cash used in financing activities of $0.4 million for the three months ended March 31, 2025. The current period reflected $0.3 million of repayments of consideration payable. The prior-year period reflected $0.7 million of distributions, partially offset by $0.3 million of contributions.
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Related Party Transactions
We engage in various transactions with related parties in the normal course of business. During the reporting periods, the Company reimbursed one of its members for administrative and operational expenses incurred on its behalf. Additionally, the Company maintained a loan receivable from VCV Digital, which was used to support surety bond and letter of credit requirements. This loan is non-interest-bearing and is considered fully collectible based on the collateral structure and the financial condition of the borrower.
The Company also had receivables and payables with other affiliated entities arising from operational activities. These balances are expected to be settled in the ordinary course of business.
Management monitors related party balances and transactions to ensure transparency and compliance with applicable accounting standards. All related party transactions are disclosed in the consolidated financial statements and are reviewed periodically for appropriateness and collectability.
Recently Issued and Proposed Accounting Pronouncements
For information on new accounting pronouncements and the impact of these pronouncements on our Consolidated Financial Statements, see Note 2 – “Summary of Significant Accounting Policies” in the notes to our Consolidated Financial Statements.
Critical Accounting Estimates
We describe our most significant accounting policies in Note 2, “Summary of Significant Accounting Policies” in the notes to the consolidated financial statements. We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates and assumptions about highly complex and inherently uncertain matters and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as appropriate based on changing conditions. The critical accounting policies in the preparation of our consolidated financial statements include revenue recognition and utility true-up adjustment.
Critical accounting estimates are those that involve significant judgment, require complex assumptions, and could materially impact the Company’s financial condition or results of operations. These estimates are developed in accordance with U.S. GAAP and are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting estimates in the preparation of our consolidated financial statements include the utility true-up adjustment.
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates are evaluated on an ongoing basis and are based on historical experience, current conditions, and other factors that management believes to be reasonable under the circumstances.
Utility True-Up Adjustment
The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes, and timing of adjustments.
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Fair Value Measurements and Pushdown Accounting
Following a change in control in early 2024, the Company applied pushdown accounting, which required the remeasurement of assets and liabilities at fair value. This process involved significant estimates, particularly in determining the fair value of property, plant, and equipment and the recognition of goodwill. These estimates were based on third-party valuations and management’s assumptions regarding future cash flows, discount rates, and market conditions.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets, including property, plant, and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. This assessment involves estimating future undiscounted cash flows and comparing them to the asset’s carrying value. If impairment indicators exist, the Company determines the fair value of the asset using market-based or discounted cash flow approaches. These estimates require significant judgment and are sensitive to changes in assumptions about future performance and market conditions.
Emerging Growth Company and Smaller Reporting Company Status
As an emerging growth company under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. We may elect to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either irrevocably elect to opt out of such extended transition period or no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.
Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), or (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. We will continue to remain an emerging growth company until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer as defined in Rule 12b-2 under the Exchange Act.
We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
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Quantitative and Qualitative Disclosures About Market Risk
We are exposed to certain market risks that may impact its financial condition and results of operations. These risks primarily include exposure to energy price fluctuations, credit risk from a concentrated customer base, and interest rate risk.
Commodity and Energy Price Risk
The Company’s operations are highly dependent on electricity, which is procured through a third-party energy services agreement. We are subject to a fixed monthly minimum charge, with additional charges based on actual usage. While this structure provides some degree of cost predictability, the Company remains exposed to fluctuations in energy rates, particularly during periods of high demand or regulatory changes. The Company does not currently engage in energy hedging or derivative contracts to manage this risk. However, should the Company deem it necessary to mitigate exposure to energy price volatility, it may consider implementing hedging instruments or other risk management strategies in the future.
Credit Risk
Our revenue was previously concentrated with a single customer, Blue Ridge Digital Mining, which services multiple subtenants. While this structure provides indirect diversification, the Company remains exposed to the creditworthiness of its primary customer. To mitigate this credit risk, Blue Ridge Digital Mining has diversified its portfolio of customers among multiple subtenants, reducing dependency on any single end-user.
Following the asset acquisition transaction with Blue Ridge Digital Mining in May 2025, the Company’s customer base has become more diversified. However, a significant concentration remains with several large customers. As a result, the Company continues to be exposed to credit risk associated with these key relationships.
Management is focused on achieving tenant diversification targets to reduce credit concentration risk over time. The Company actively monitors receivables and evaluates the need for an allowance for expected credit losses based on historical collection patterns and current conditions. As of the reporting dates, no allowance for credit losses has been recorded, as management believes these amounts are fully recoverable.
Interest Rate and Fair Value Risk
The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, related party balances, and lease liabilities. These instruments are short-term in nature or bear fixed rates, and their carrying amounts approximate fair value. The Company uses a discounted cash flow approach to estimate fair value, incorporating observable market data where available. Given that related party balances are non-interest bearing and the Company’s lease obligations are classified as operating leases, exposure to interest rate risk is considered negligible. The Company does not currently utilize interest rate swaps or other derivatives for hedging purposes.
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BUSINESS
Our Business
Overview
Through One Blockchain, our primary operating subsidiary, we develop, own and operate digital infrastructure dedicated to AI hosting and high-performance computing optimized colocation data center capacity. Our operations are currently centered around our existing 65 MW data center facility, which we refer to as CLT-01.
As part of our planned transition and expansion, we are developing a modular deployment architecture intended to convert existing powered land and brownfield sites, including digital-asset-mining facilities, into AI/HPC-grade colocation facilities. To support this approach, we secure executed utility commitments before committing capital to vertical construction. Our platform is designed to serve as an owner-agnostic hosting environment, which means that our tenants supply their own GPU and compute hardware and we provide the physical infrastructure on underlying real estate, power cooling, and connectivity under long-term hosting and capacity leases.
We have strategic collaborations with PDM for electrical infrastructure and are collaborating with Super Micro for AI data center hardware, including standardized, high-density compute hardware designed for AI workloads.
As of May 2026, our portfolio consists of:
| ● | Approximately 65 MW of energized utility load at our CLT-01 campus; |
| ● | Approximately 25 MW of additional capacity in active development or interconnection; and |
| ● | An identified development pipeline of approximately 485 MW across four sites. |
Prior to our planned conversion of the CLT-01 campus, for the fiscal year ended December 31, 2025, the facility generated approximately $18.5 million in revenue and a net loss of approximately $0.8 million, reflecting the transition of the Company’s customer base toward high-performance computing workloads and approximately $1.7 million in transaction-related expenses incurred in connection with the Business Combination. For the fiscal year ended December 31, 2024, this facility generated approximately $22.9 million in revenue and approximately $5.7 million in net income on a combined basis.
Our Strengths
We believe we are well positioned for success as a leader in creating and operating scalable, sustainable power and data infrastructure purpose-built for AI hosting, AI workloads, HPC, and accelerated compute applications. The following strengths differentiate us from our competitors:
Access to Low-Cost Power
Our energy strategy is focused on securing low-cost, reliable power, with an increasing emphasis on sustainable and carbon-neutral sources, to support our hosting and HPC operations. Electricity is the single largest input cost for our hosting operations and is critical to the continuous operation of our facility. We seek to mitigate delays or failures in the procurement of utility power, which is the principal source of development risk in our industry, by treating an executed Electric Service Agreement, or ESA, or comparable binding power commitment as a prerequisite to vertical construction. We believe this discipline reduces the likelihood of stranded capital deployment and shortens the time between site selection and tenant energization.
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We maintain a pipeline of pre-screened sites with executed ESAs or comparable binding power commitments. In evaluating potential sites, we assess (i) the availability of grid-tied generation and transmission capacity, (ii) the utility’s interconnection queue position and stated capacity in the relevant zone, (iii) zoning and permitting posture, (iv) climate and natural-hazard exposure (including flood-zone, seismic, and wildfire exposure), (v) the quality and number of available carriers, and (vi) regional baseload generation profile. We maintain a pipeline of pre-screened sites with executed ESAs or comparable binding power commitments.
On May 27, 2026, we executed an amended Electric Service Agreement (the “ESA”) with our existing local utility provider (the “ESA Effective Date”), specifies a contract demand of 65,000 kW at approximately 34,500 volts for this facility. The ESA has an initial term of fifteen years from the ESA Effective Date and thereafter renews year-to-year unless terminated as provided in the applicable rate schedule.
Our local utility provider sources its power portfolio from a regional supplier. Based on our regional supplier’s publicly available disclosures, nuclear generation has consistently represented the largest component of the Carolinas generation mix, accounting for approximately half of total electricity output. Natural gas, coal, and a growing share of solar and hydroelectric resources comprise the remainder. Under the regional supplier’s 2025 Carolinas Resource Plan, filed with the North Carolina Utilities Commission in October 2025, the utility plans to further expand its nuclear and natural gas capacity while pursuing an orderly transition away from coal-fired generation and continued growth in solar and battery storage resources. While we do not directly control the generation mix of our utility provider, the diversity of underlying fuel sources — and the substantial nuclear baseload component in particular — provides a degree of supply stability and insulation from the price volatility associated with any single fuel source. This generation profile also positions our facility favorably relative to data center operators in regions more heavily dependent on natural gas or coal, where fuel price swings can have a more direct impact on electricity costs.
The sale, delivery and use of power are governed by the rate schedule of our existing local utility provider and service regulations on file with the state’s Public Service Commission and are subject to change upon order of the Public Service Commission or any other regulatory authority having jurisdiction. In our analysis of energy costs and cost management strategies for our CLT-01 facility, our “all-in” power cost at this facility was approximately $0.0522/kWh in 2025 and $0.0485/kWh in 2024. Costs are subject to an annual true-up adjustment with the utility provider based on actual consumption and final rates.
Our AI-Optimized Facility Design
Our infrastructure is designed to support customer-owned compute equipment in an owner-agnostic hosting environment. We are developing a modular deployment architecture intended to support the conversion of power-secured sites into AI-ready digital infrastructure. This would include high-density server racks, advanced power distribution systems capable of supporting power-intensive GPU servers, liquid cooling or advanced air-cooling solutions, high-speed networking, and specialized building management systems to monitor and control the critical environment required for advanced compute equipment.
Our facilities will be designed for high-density AI compute workloads. Standard design specifications include:
| ● | Rack densities of up to 150 kW per rack; |
| ● | Liquid cooling capability throughout the data hall; |
| ● | N+1 mechanical and electrical redundancy; |
| ● | Carrier-neutral connectivity with multiple fiber providers; and |
| ● | Target annualized power usage effectiveness (PUE) of approximately 1.3. |
This approach includes the use of standardized prefabricated data center modules together with secured electrical infrastructure supply. We intend to construct our facilities in standardized 10 MW data-hall modules, with pre-engineered structural components and parallel civil work. We secure equipment procurement before issuing notice to proceed. We target a delivery cycle of 9 to 12 months per module, although we cannot assure that any particular project will meet this target.
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Supply Chain and Equipment Procurement
Long-lead electrical equipment, including transformers, generators, switchgear, and uninterruptible power supplies has experienced extended lead times and price volatility in recent quarters. We mitigate this exposure by securing letters of intent for long-lead equipment at site selection and by maintaining a panel of eight key vendor relationships. We can provide no assurance that letters of intent for long-lead equipment will result in executed purchase orders on the terms anticipated, that pricing or availability of equipment will not change, or that supply chain disruptions will not affect our development timelines.
Operational Excellence and Profitability
Our CLT-01 campus has demonstrated strong performance, with a proven track record of revenue and generation of operating cash flow. Net cash provided by operating activities for the years ended December 31, 2025 and 2024 was $2.3 million and $8.1 million, respectively. Revenue during the years ended December 31, 2025 and 2024, was $18.5 million and $22.9 million, respectively. These results showcase our ability to efficiently manage and operate data center infrastructure.
Capital Efficient Business Model
We operate with a capital efficient business model with institutional risk controls, maintaining a strong balance sheet with no significant traditional debt as of December 31, 2025, and positive stockholders’ equity of $7.9 million. This allows us to fund near-term growth through existing cash flows and leverage. Our historical financial performance underscores our ability to generate substantial net income.
Experienced Management Team
Our experienced management team possesses a strong track record of operational excellence and deep industry expertise in real estate, digital assets, energy, capital markets, and project management. Jerry Tang, our Chief Executive Officer and President, has over 14 years on Wall Street in real estate and hospitality capital markets and investment banking, managing global teams and executing over $40 billion in transactions, and holds an MS in Engineering from Columbia University. Jolienne Halisky, our Chief Financial Officer, is a Certified Public Accountant with over 20 years of senior finance experience, including roles at Deloitte, Siemens Energy and Weatherford International. Eyal Rozen, our Chief Operating Officer, has 25 years of global experience spanning AI, Cloud, and Cybersecurity, including as Chief Revenue Officer and a Managing Director of Nebius Israel. Gary Heitz, our Vice President of Sales, has over 25 years of Hyperscale enterprise and infrastructure business development experience, including prior roles at Cologix, Google and Dell. Amanda Klier, our Director of Operations, is a former tax attorney at Deloitte specializing in REIT transactions and has prior roles at GE Capital Real Estate and GE Energy. Christopher Iannacone, our Director of Construction Executive, has more than 25 years mission-critical engineering and construction experience, including oversight of more than three gigawatts (GW) of completed data center capacity across both individual facilities and large-scale campuses at Amazon Web Services.
Our Properties and Development Pipeline
We possess scalable infrastructure and a growth pipeline, with a clear path for expansion with approximately 485 total MW across six sites. Our pipeline locations are valuated based on factors that may include power availability and cost, site control, network connectivity, development timelines, and the ability to support AI hosting and high-performance computing workloads. All of our current and planned facilities are U.S.-based, which we believe supports operational and regulatory stability.
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We classify our portfolio at four stages: Identified (sites where we have completed initial diligence and established a development premise but have not yet executed site control or interconnection documents); Under Development (sites under active site control and build or interconnection process); Energized (sites where contracted utility power is available); and Contracted (Leased) (capacity at energized sites that is subject to an executed long-term lease).
The key infrastructure components of our facilities utilize robust electrical infrastructure, including transformers, switchgear and power distribution equipment, to manage high power loads. We plan to employ containerized and other standardized prefabricated data center modules as part of a modular deployment architecture intended to support efficient deployment and scalability. To support this strategy, we have entered into a strategic collaboration with PDM, which we expect to assist with electrical systems, including transformers, switchgear and power distribution equipment. Our planned sites may require additional interconnection facilities or other upgrades depending on local utility and grid requirements.
CLT-01 – Our Anchor Operating Asset
Our CLT-01 facility is our principal operating asset and was previously operated as a 40 MW grid-interconnected digital-asset-mining facility. We are repurposing the 40 MW powered land and we recently expanded the utility power capacity available from 40 MW to 65MW, under an amended ESA with our local utility provider. CLT-01 has a building size of approximately 175,000 and is situated on 27 acres of leased land. There is a maximum rack density of up to 150 kW per rack and a target PUE of approximately 1.3 (annual average). The site is pre-zoned for industrial / data center use, is outside designated flood zones, is located in a low-seismic-risk region, and has carrier-neutral connectivity with multiple fiber providers. The ground lease has an initial term of five (5) years, commencing October 18, 2021, with options for four (4) successive five-year renewal terms.
We expect to complete development of the remaining capacity at CLT-01 in phases, with each data-hall module constructed and energized on a sequenced basis.
Our CLT-01 facility benefits from its existing operating history, established power arrangements and location in a U.S. jurisdiction that supports digital infrastructure development.
CLT-02
CLT-02 is an identified development site of approximately 100 MW. As of the date of this prospectus, CLT-02 is in early-stage evaluation, and we have not yet executed site control or definitive power-delivery commitments. We can provide no assurance that CLT-02 will advance to subsequent stages of our development pipeline.
Dallas–Fort Worth — DFW-1, DFW-2, and DFW-3
Our Dallas–Fort Worth pipeline consists of three identified sites:
| ● | DFW-1 is an identified site of approximately 25 MW for which we are pursuing an acquisition. As of the date of this prospectus, no definitive agreements have been signed, and we can provide no assurance that we will execute the acquisition on commercially acceptable terms, on the timeline currently anticipated, or at all. |
| ● | DFW-2 is an identified site of approximately 75 MW. As of the date of this prospectus, DFW-2 is in lease negotiation with a prospective tenant, and we have not yet executed a definitive lease. |
| ● | DFW-3 is an identified site of approximately 200 MW. As of the date of this prospectus, DFW-3 is in early-stage evaluation. |
Minnesota
We also plan to develop a 25 MW AI-focused data center site in Minnesota intended to support AI hosting and high-performance computing workloads under long-term hosting and capacity arrangements. The land for this planned Minnesota site is owned by a related entity, which is intended to be developed as a greenfield project, and the development of this site will be dependent on a suite of agreements that are under negotiation. Our Minnesota site is a development project that is in construction and the utility interconnection process. We can provide no assurance regarding the timing or completion of construction or interconnection at this site.
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The following outlines our anticipated timeline for certain key near-term development milestones. Achieving these milestones are subject to various risks and uncertainties as described elsewhere in this prospectus, and there can be no assurance that any milestone will be achieved within the anticipated timeframe or at all:
| ● | CLT-01 Data Hall Expansion: We are targeting the execution of a lease agreement for a second data hall at CLT-01 in the third quarter of 2026, which would increase the site’s total leased critical IT load to approximately 30 MW. |
| ● | Minnesota Site Development: We anticipate completing construction and utility interconnection at our Minnesota site in the fourth quarter of 2026. |
| ● | DFW-1 Acquisition: In the first quarter of 2027, we are targeting the execution of definitive agreements for the acquisition of DFW-1. |
| ● | Pipeline Advancement: During calendar years 2027 and 2028, we expect to progress DFW-2 (approximately 75 MW, currently in lease negotiation), DFW-3 (approximately 200 MW, currently in early-stage evaluation), and CLT-02 (approximately 100 MW, currently in early-stage evaluation) through subsequent stages of our development pipeline. Advancement of these projects is subject to securing site control, executed power commitments, and definitive customer agreements at each respective site. |
Active Commercial Dialogue with Prospective Tenants.
We are continuously seeking new tenants and currently have ongoing commercial dialogue with multiple prospective tenants across the following categories: (i) GPU cloud platforms; (ii) Bare-metal GPU marketplaces; (iii) AI cloud infrastructure operators; (iv) AI silicon and hosted-inference platforms; and (v) Sovereign AI infrastructure programs.
As of the date of this prospectus, other than one non-binding letter of intent with a data infrastructure tenant for an additional 5 MW at CLT-01, we have also commenced preliminary negotiations and exchanged an initial draft of a lease agreement with an AI cloud infrastructure operator covering 65 MW utility load (50 MW IT load) of data center capacity at CLT-01. We believe that this lease, or a materially similar lease with other prospective tenant or tenants, could potentially be executed within the next 90 days. However, execution of any such lease remains subject to continued negotiation, technical and commercial diligence, site and power availability review, legal documentation, credit review, financing considerations, internal approvals and other customary conditions. There can be no assurance that any definitive lease will be executed within such timeframe, or at all, or that any definitive lease, if executed, will be for the capacity, duration or economic terms currently under discussion.
Customer Agreements Related to Our CLT-01 Facility
Under the Co-Location Agreement (described below under “Vendor Agreements Related to Our CLT-01 Facility”), we provided hosting services to Blue Ridge Digital Mining, including approximately 9,600 square feet of space within 60 Antboxes and up to 40 MW of reserved power capacity at our CLT-01 facility. The agreement had a term of 44 months with options for renewal upon mutual agreement. The Co-Location Agreement provided for Blue Ridge Digital Mining to pay a base license fee (the “Base License Fee”) consisting of $153,069 for first month, $1,956,400 per month for months 2 through 41, and, in the subsequent three months, to $1,467,300, $978,200 and $489,100, respectively, based on use of 30 MW, 20 MW and 10 MW, respectively, and corresponding reduced square footage for the equipment, for such months. The license obligations under the Co-Location Agreement were superseded by the Co-Location Agreement Amendment (as defined below) and the Blue Ridge Digital Mining Settlement Agreement.
Under Amendment No. 1 to the Co-Location Agreement, dated as of May 15, 2025 (the “Co-Location Agreement Amendment”), and the Related Party Revenue Transfer Agreement, dated as of May 15, 2025, between Blue Ridge Digital Mining and the Company (the “Related Party Revenue Transfer Agreement”), we became entitled to all revenues of Blue Ridge Digital Mining derived from a Service Framework Agreement between Blue Ridge Digital Mining and Bitmain Technologies Georgia Limited, dated as of August 15, 2022 (the “Bitmain Agreement”). Blue Ridge Digital Mining derives revenues under the Bitmain Agreement for server hosting, maintenance and/or operation services of $0.075 per kWh, subject to certain adjustments, which, pursuant to the Co-Location Agreement Amendment, will be passed directly to One Blockchain. In addition, One Blockchain will be entitled to 50% of certain credits received by Blue Ridge Digital Mining pursuant to the Bitmain Agreement related to the period prior to the date of the Co-Location Agreement Amendment.
On July 12, 2023, One Blockchain and Code Green Apparel Corporation (“Code Green”) entered into a Master Services Agreement for the colocation and hosting of digital asset mining units at our CLT-01 facility. The nominal capacity was 4 MW, and hosting services were billed monthly at a rate of $0.08 per kWh, subject to curtailment of up to four hours per day during summer months and two hours per day otherwise. The agreement renewed automatically unless terminated by either party upon 30 calendar days’ prior written notice, or as otherwise permitted if Code Green failed to pay an invoice within two business days of the applicable payment date or failed to cure other non-monetary breaches within five calendar days of written notice. One Blockchain could have also terminated the agreement immediately for certain legal, compliance, or risk-related reasons as specified in the agreement.
On March 19, 2024, One Blockchain and New York Crypto Capital Inc. (“New York Crypto”) entered into a Master Services Agreement for the colocation and hosting of approximately 600 miners at the CLT-01 facility. The nominal assumed power consumption was 3.4 kWh per unit. The hosting service fees were calculated monthly at either (A) $0.0715 per kWh or (B) 75% of revenue after deducting electricity costs. One Blockchain retained the right to curtail electricity supply at its sole discretion. Effective October 24, 2024, the agreement was terminated.
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On January 7, 2025, One Blockchain and BlockMetrix, LLC (“BlockMetrix”) entered into a Mining Services Agreement for the colocation and hosting of digital asset mining units at our CLT-01 facility. One Blockchain was responsible for providing rack space, security, monitoring, maintenance, utilities, facility management, network and data access, technical support, and heat/thermal management. Installation was billed at $5 per miner, capped at $10,000 across all purchase orders. One Blockchain used its best efforts to maintain uptime, with a service level target of no more than 5% unscheduled downtime per month. Hosting services were billed monthly at a rate of $0.065 per kWh, based on the nameplate power consumption of the equipment. The initial term of the agreement was two years, commencing when the equipment began to consume power. The agreement automatically renewed for successive one-year terms unless terminated earlier. Concurrently with the execution of the Mining Services Agreement, BlockMetrix agreed to purchase digital asset mining services and related services for 1,296 digital asset mining units. The terms of the order commenced on the date when the equipment began to consume power and ended on the second anniversary of the commencement date. Effective November 28, 2025, the agreement was terminated.
In June 2025, One Blockchain entered into a Hosting Services Agreement (“Hosting Services Agreement”) with Northstar Lending LLC (“Northstar”) under which One Blockchain will provide hosting capacity for approximately 5,400 supercomputing servers at our CLT-01 facility. The agreement has a term of one year, with an option for Northstar to renew for an additional year. The hosting fee is set at $0.065 per kWh. On July 1, 2025, One Blockchain and Northstar entered into a Tripartite Supplemental Agreement with Green Volt Innovations AA1 LLC (“GreenVolt”), whereby GreenVolt was substituted as the contracting party under the Hosting Services Agreement in place of Northstar, and provided that the Hosting Services Agreement became effective on June 27, 2025. On October 1, 2025, One Blockchain and GreenVolt entered into a Supplemental Agreement to Tripartite Supplemental Agreement to update certain terms concerning the hosted servers and deposits.
Vendor Agreements Related to Our CLT-01 Facility
We have entered into several key agreements to secure land, power, and operational capabilities for our CLT-01 facility’s data center.
We lease the land for the CLT-01 facility under a Ground Lease Agreement, dated as of October 19, 2021 (the “Ground Lease Agreement”), with Pacolet Milliken, LLC (“Landlord”), consisting of a 17.6-acre site. The initial term is five years, commencing October 19, 2021, with four successive five-year renewal options. The rent is $9,100 per month, payable in advance on the first day of each month, with a 5% escalation every five years starting October 1, 2026, and late fees of 10% for unpaid rent after ten days and 1.5% monthly interest if unpaid into the next month. The Ground Lease Agreement includes a requirement for One Blockchain to use a local utility provider for its power utility needs. If One Blockchain fails to use the local utility provider for power, Landlord has the right to immediately and unilaterally terminate the Ground Lease Agreement. If the local utility provider is unable or refuses to provide power to One Blockchain, either One Blockchain or Landlord shall have the right to immediately and unilaterally terminate the Ground Lease Agreement. One Blockchain may also terminate the lease if all or part of the related premises are damaged by fire, wind, flood, earthquake or other casualty and One Blockchain determines that it would not be commercially reasonable or desirable to repair the premises. Our existing local utility provider is the only power utility provider for the industrial park; there are no other competitors.
We obtain electric power supply for the site under the Electric Service Agreement. The initial term of the Electric Service Agreement is five years, with provisions for year-to-year continuation. The agreement specifies a contract demand of 40,000 kW at approximately 34,500 volts. See “Energy” below for further discussion of this agreement. The price per kwh was approximately $0.0522/kWh in 2025 and $0.0485/kWh during 2024. The planned expansion from 40 MW to 50 MW is pending our entry into a new electric service agreement.
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We, as licensor, entered into a Digital Asset Miner Co-Location License, dated September 27, 2022, with Blue Ridge Digital Mining as licensee (the “Co-Location Agreement”). Under the Co-Location Agreement, we leased 60 Antbox mobile mining containers (“Antboxes”) from Blue Ridge Digital Mining for a term of 44 months. One Blockchain granted Blue Ridge Digital Mining permission to use dedicated space and reserved power of at least 40 MW within its data center facility for Blue Ridge Digital Mining’s use of its digital asset mining equipment and to provide certain services to permit Blue Ridge Digital Mining to use its digital asset mining equipment to the extent power is available over a term of 44 months. Blue Ridge Digital Mining granted One Blockchain permission to install and maintain the Antboxes on the premises licensed to Blue Ridge Digital Mining, to host and power Blue Ridge Digital Mining’s digital asset mining equipment. The lease fees consisted of monthly lease payments of $29,762 for the first month; $59,524 for months 2 through 36; and, if Blue Ridge Digital Mining exercises its option to ramp down the number of Antboxes based on corresponding servers and available MWh, monthly fees in the subsequent three months will be $44,643, $29,762 and $14,881, respectively. These fees could be offset by payments of certain license fees payable by Blue Ridge Digital Mining to One Blockchain. Under a Guarantee Agreement, Merkle Standard LLC (“MS”) is a guarantor for Blue Ridge Digital Mining’s obligations under the Co-Location Agreement (the “MS Guarantee Agreement”). The lease obligations under the Co-Location Agreement, as subsequently amended, and the guarantee obligations under the MS Guarantee Agreement were superseded by the Antbox Purchase Agreement (as defined below) and the Confidential Settlement Agreement, Mutual Release, and Separation Agreement, effective as of May 20, 2025, among Blue Ridge Digital Mining, MS), One Blockchain, VCV Digital Infrastructure Holdings, and Tiger Cloud (the “Blue Ridge Digital Mining Settlement Agreement”), VCV Digital Infrastructure Holdings was required to purchase Blue Ridge Digital Mining from MS and to pay MS $97,167 per month for 24 months, for a total of $2,332,000, pursuant to the Blue Ridge Equity Purchase Agreement (as defined below). The Blue Ridge Digital Mining Settlement Agreement further provided for, (1) a Contribution Agreement by and among MS, VCV Digital Infrastructure Holdings, Tiger Cloud, and Blue Ridge Digital Mining pursuant to which MS contributed a certain promissory note, dated September 29, 2022, executed by VCV Digital Infrastructure Holdings and Tiger Cloud to MS (the “MS Promissory Note”); (2) the Blue Ridge Equity Purchase Security Agreement (as defined below); (3) the Blue Ridge Equity Purchase Agreement Guaranty; and (4) a Bad Boy Personal Guaranty made by Jerry Tang in favor of MS, pursuant to which Tang agreed to certain guarantees with respect to VCV Digital Infrastructure Holdings, Tiger Cloud, and One Blockchain. The Blue Ridge Digital Mining Settlement Agreement further provided that the only assets held by Blue Ridge Digital Mining at the time of closing would be its rights under the Bitmain Agreement and the MS Promissory Note. Pursuant to the Blue Ridge Digital Mining Settlement Agreement, as of May 20, 2025, the Co-Location Agreement, the MS Guarantee Agreement, and the Standstill Agreements were terminated. On May 15, 2025, VCV Digital Infrastructure Holdings entered into a Purchase and Sale Agreement with MS to acquire 100% of the equity interests in Blue Ridge Digital Mining for $2,332,000 total to be paid in equal monthly installments of $97,167 from August 15, 2025 through July 15, 2027 (the “Blue Ridge Equity Purchase Agreement”).
Under a Security Agreement, dated as of May 15, 2025, among VCV Digital Infrastructure Holdings, One Blockchain, and MS (the “Blue Ridge Equity Purchase Security Agreement”), each of VCV Digital Infrastructure Holdings and One Blockchain granted a security interest in favor of MS with respect to the 60 Antboxes purchased by One Blockchain from Blue Ridge Digital Mining, and all related proceeds, to secure the obligations of VCV Digital Infrastructure Holdings and One Blockchain under the Blue Ridge Equity Purchase Agreement, the Blue Ridge Equity Purchase Security Agreement, the Blue Ridge Equity Purchase Agreement Guaranty (as defined below), or otherwise with respect to the payment of the purchase price under the Blue Ridge Equity Purchase Agreement.
Under a Purchase and Sale Agreement, dated as of May 15, 2025, between One Blockchain and Blue Ridge Digital Mining (the “Antbox Purchase Agreement”), One Blockchain purchased the 60 Antboxes that were formerly leased from Blue Ridge Digital Mining for a total purchase price of 24 monthly payments of $97,167 commencing on August 15, 2025 and ending on July 15, 2027. One Blockchain was required to provide the Blue Ridge Equity Purchase Agreement Guaranty. Under that Guaranty, dated as of May 15, 2025, by One Blockchain in favor of MS, One Blockchain guaranteed the payment and performance of all obligations of VCV Digital Infrastructure Holdings under the Blue Ridge Equity Purchase Agreement and the Blue Ridge Equity Purchase Security Agreement, including all costs, expenses, reasonable legal fees, and other fees, relating to the enforcement of MS’s rights under the Blue Ridge Equity Purchase Agreement Guaranty.
We engage Tiger Cloud, a One Blockchain Securityholder, to provide comprehensive management services for our CLT-01 facility, including operations management, strategic leadership, research and development, human resources, administrative workflow management, and other related management activities. Pursuant to our Management Fee Agreement with Tiger Cloud, dated February 13, 2026 (the “Management Fee Agreement”), we pay an annual management fee of $284,000 for these services and for the year ended December 31, 2025 we incurred $239,000 of labor allocation expense.
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Competition
The market for AI- and HPC-optimized colocation capacity is competitive. Our competition ranges from large, publicly traded companies to smaller, private operations.
We compete with other data center providers and infrastructure developers for customers, power availability, sites, equipment, and capital. Key competitive factors include power cost and reliability, facility uptime and security, speed-to-deploy, service levels, supply-chain access, and the ability to meet customer specifications. As we plan to transition and expand into AI hosting and HPC workloads, we also expect to face competition from established providers in the AI/HPC data center and hosting markets. This competition is global and influenced by the following:
| ● | hash rate, which is based in part on the total computational power of a miner; |
| ● | energy costs, which are a primary driver of profitability, where companies with access to lower-cost power have a significant advantage; |
| ● | mining hardware efficiency, including the performance (hash rate) and power consumption of ASIC miners; |
| ● | operational efficiency, or the ability to maintain high uptime and optimize miner performance; and |
| ● | capital availability, or access to capital for acquiring new hardware and expanding operations. |
Publicly traded competitors in the digital infrastructure space may include companies that operate in digital asset mining hosting, data center development, and/or HPC markets, including companies such as:
| ● | Core Scientific, Applied Digital, Cipher Mining, IREN Limited, Hut 8 Corp., TeraWulf Inc., which all have purposed digital-asset-mining infrastructure for AI workloads; |
| ● | Vertically integrated AI cloud platforms that operate or lease their own infrastructure, such as CoreWeave, Inc.; |
| ● | Hyperscale cloud providers that develop and operate their own data center capacity for internal and customer use; and |
| ● | Private developers and infrastructure-fund-backed operators pursuing greenfield and brownfield development. |
Many of our competitors have substantially greater financial, technical, and operational resources than we do; longer operating histories in the data center colocation business; larger existing tenant relationships; and access to capital on more favorable terms.
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Competitive Landscape in the HPC Data Center Market. The competitive landscape in the HPC Data center market is characterized by high demand, driven by AI/ML, scientific research, and big data analytics. Competitors include established data center REITs and providers, which are generally large companies with existing data center portfolios that are increasingly catering to HPC clients. Hyperscaler cloud providers, such as Amazon Web Services, Google Cloud, and Microsoft Azure, offer HPC cloud services and are also expanding their physical data center footprints. There are also specialized HPC providers focusing specifically on HPC infrastructure and services. Additionally, other digital asset miners diversifying into HPC, similar to One Blockchain, are leveraging their expertise in power infrastructure and data center operations to enter the HPC market. Key competitive factors in HPC include power availability and cost, data center design and cooling capabilities (supporting high-density server racks), network performance, security, and the ability to meet the specific technical requirements of HPC workloads.
Our Positioning Relative to Competitors. We compete principally on the basis of (i) time-to-energization, (ii) access to grid-tied power, (iii) facility design suitability for high-density AI workloads, (iv) commercial terms, and (v) the experience of our management team and contractors.
Our low-cost power focus, emphasizing securing favorable power agreements including renewable energy sources, is a key differentiator, aiming to provide a competitive cost structure for both mining-related hosting and planned AI/HPC hosting workloads. Our experienced management team’s background in energy, finance, and real estate provides a strong foundation for executing our growth strategy.
Finally, our capital efficiency and strong balance sheet, with current profitability and lack of significant traditional debt, provide a solid base for significant expansion. We believe our combination of operational experience, access to low-cost power, a clear growth strategy, and experienced management team will enable us to compete effectively in these dynamic markets.
Signing Day Sports
Signing Day Sports, Inc. (“Signing Day Sports) is a wholly-owned subsidiary of the Company. It is a technology company developing and operating a platform to give significantly more student-athletes the opportunity to go to college and continue playing sports. The Signing Day Sports platform is a digital ecosystem to help student-athletes get discovered and recruited by coaches and recruiters across the country. It fully supports football, baseball, softball, and men’s and women’s soccer. Each sport is led by former professional athletes and coaches who know what it takes to get to the big leagues.
Signing Day Sports offers a comprehensive solution that services the needs of all participants in the sports recruitment process. Its goal is to change the way sports recruitment is done for the betterment of everyone.
We are exploring whether we will continue the Signing Day Sports business. We are in the preliminary stages of such evaluation, but at this time we have not made any definitive decisions. There can be no assurance that any spin-off, dissolution or other transaction will occur, or that the evaluation will result in any definitive action.
Intellectual Property
As of the date of this prospectus, we own no intellectual property, except for one registered domain name. We have routinely entered into confidentiality and invention disclosure and assignment agreements with our employees and contractors, and non-disclosure agreements with external parties with whom we conduct business to control access to, and use and disclosure of, our proprietary information.
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Employees
We currently have six employees consisting of our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President of Sales, Director of Operations and Director of Construction Execution. In addition, we engage Tiger Cloud, a One Blockchain Securityholder, to provide comprehensive management services, including operations management, strategic leadership, human resources, administrative workflow management, and other related management activities. Pursuant to our Management Fee Agreement with Tiger Cloud, dated February 13, 2026, we pay an annual management fee of $284,000 for these services and for the year ended December 31, 2025, we incurred $239,000 of labor allocation expense. None of Tiger Cloud’s personnel providing these management services are represented by a labor union or subject to a collective bargaining agreement. We believe we maintain a good working relationship with Tiger Cloud, and we have not experienced any material disputes regarding employment or service-related issues.
Government Regulation
The regulatory landscape surrounding HPC and blockchain hosting services is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. Any such developments may significantly impact our business and operations in ways that are difficult to predict.
In the realm of cloud computing, there are growing concerns about the ethical implications and potential misuse of these technologies, particularly in association with AI and machine learning. Governments and regulatory bodies are considering measures to ensure the responsible development and deployment of AI systems, including transparency, accountability, and fairness guidelines.
Although we are not in the crypto mining business, the amount of energy used for crypto mining and co-location services has received significant attention. In January 2024, the U.S. Energy Information Administration conducted an emergency survey of electricity consumption data from cryptocurrency mining companies in the U.S. This indicates that more focus is being placed on the energy usage of these activities. It is unclear how the information collected will be used for future regulations, but it is expected that energy efficiency and sustainability will be critical factors regulating this industry.
Furthermore, using digital assets in illicit financial activities has been a significant concern for regulators and lawmakers. Leaders in the U.S. House Financial Services Committee and U.S. Senate Banking Committee have expressed interest in passing legislation to provide additional regulatory authority to address these risks. The U.S. Treasury Department has also requested additional authorities to combat using digital assets in illegal activities. While there is currently insufficient support for any particular proposal, we expect that regulatory efforts in this area will continue to evolve and potentially impact our business.
We also closely follow developments related to regulating digital asset markets and financial services. In January 2024, the SEC approved a series of spot Bitcoin exchange-traded funds (“ETFs”), marking a significant milestone in the mainstream adoption of digital assets. Later in 2024 the SEC also approved multiple spot Ethereum ETFs. However, the regulatory landscape for digital asset markets remains complex and uncertain, with various agencies and lawmakers proposing different approaches to oversight and regulation.
As a company operating at the intersection of data center and HPC hosting services, we are committed to maintaining a proactive and adaptive approach to regulatory compliance. We closely monitor legislative and regulatory developments and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. Despite the uncertainties posed by the changing regulatory landscape, we remain committed to delivering innovative and responsible solutions in the data center and HPC hosting markets while prioritizing compliance and risk management. However, if we fail to comply with applicable laws and regulations, we may be subject to significant liabilities, including fines and penalties, and our business, financial condition, or results of operations could be adversely affected.
Available Information
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as section 16 reports on Form 3, 4, or 5, are available free of charge on our website at https://oneblockchain.ai/ as soon as it is reasonably practicable after they are filed or furnished with the SEC. Our Code of Business Conduct and Ethics and the charters for the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee of our Board of Directors are also available on our website. The Code of Business Conduct and Ethics and charters are also available in print to any shareholder upon request without charge. Requests for such documents should be directed to Jerry Tang, Chief Executive Officer, at 1540 Broadway, Suite 1010, New York, New York 10036. Our Internet website and the information contained on it or connected to it are not part of, or incorporated by, reference into this Form S-1. Our filings with the SEC are also available on the SEC’s website at http://www.sec.gov.
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MANAGEMENT
The following sets forth certain information, as of the date of this registration statement, concerning the persons who are serving as our directors and executive officers.
| Name | Age | Position | ||
| Jerry Tang | 42 | Chief Executive Officer, President and Chairman of the Board | ||
| Jolienne Halisky | 52 | Chief Financial Officer | ||
| Eyal Rozen | 58 | Chief Operating Officer | ||
| Gary Heitz | 46 | Vice President of Sales | ||
| George Chuang* | 58 | Director | ||
| Mohammad Hasham* | 38 | Director | ||
| Daniel Nelson | 63 | Director | ||
| Hongfei Zhang* | 62 | Director |
| * | “Independent Director” for purposes of the NYSE American Listing Rules and Rule 10A-3(b)(1) under the Exchange Act. |
The following is biographical information regarding the BlockchAIn executive officers and directors.
Jerry Tang has served as President and Chief Executive Officer of BlockchAIn since April 11, 2025. He has served as the Chief Executive Officer of One BlockchAIn since October 2021 and the President of One BlockchAIn since January 2026. Since November 2021, Mr. Tang has also served as the Chief Executive Officer of TigerDC, an AI data center development company. Since March 2021, Mr. Tang has also been the Founding Partner of VCV Digital, a venture capital company specializing in technology, digital assets, BlockchAIn, and AI. From January 2007 to March 2021, Mr. Tang was a managing director at Natixis, an investment bank. Mr. Tang received a MS in Engineering from Columbia University and a BS in Engineering from Huazhong University of Science & Technology. We believe that Mr. Tang is qualified to serve as a director of BlockchAIn given his deep knowledge of One BlockchAIn and his extensive executive and board experience with industry leading knowledge in artificial intelligence and digital infrastructure.
Jolienne Halisky, CPA, CMA has served as the Chief Financial Officer of BlockchAIn since March 16, 2026. She has served as the Chief Financial Officer of One BlockchAIn since August 2025. Ms. Halisky has more than 25 years of financial leadership experience across manufacturing, technology, energy, real estate, and professional services. She previously served as a Fractional CFO with The Finance Group Global from 2023 to August 2025, a consultancy firm, providing fractional CFO services and leading cross-border M&A, tax, and succession planning initiatives. Her prior roles include Business Advisor & Consultant with Boese & Co LLP from 2021 to 2023, Director of Finance & Corporate Services with CAREERS from 2020 to 2021, and Director of Finance with Parkland County from 2019 to 2020. Ms. Halisky holds the Chartered Professional Accountant designation and received her accreditation in 1997.
Eyal Rozen has served as the Chief Operating Officer of BlockchAIn since March 16, 2026. He has served as the Chief Operating Officer of One BlockchAIn since January 2026, where he leads operational and business development activities. Mr. Rozen has 25 years of experience spanning AI, Cloud, and Cybersecurity. Prior to joining One BlockchAIn, Mr. Rozen served as Chief Revenue Officer at Atlas Cloud, a Company affiliated with VCV Digital, from March 2025 to January 2026, where he drove global sales, marketing, and enterprise growth strategies. Before Atlas Cloud, he was the Chief Revenue Officer and a Managing Director of Nebius Israel from March 2022 to November 2024, overseeing all aspects of the company’s regional operations. From May 2020 to March 2022, Mr. Rozen was Head of Sales at Sygnia, responsible for global sales. Earlier in his career, Mr. Rozen held leadership positions at Morphisec and Verint, managing large teams across sales, marketing, and support, and building a strong track record in scaling high-performing commercial organizations. Mr. Rozen holds a Bachelor’s degree in Sociology from the University of Haifa, Israel.
Gary Heitz has served as the Vice President of Sales of BlockchAIn since May 21, 2026 bringing more than 20 years of enterprise revenue leadership experience across cloud, SaaS, and digital infrastructure. He has held senior sales leadership roles at Google, Dell Technologies, Cologix , and Signpost. As the Sales Director of Cologix from December 2019 to May 2026, he played a central role in shaping Cologix’s hyperscale and AI infrastructure strategy within one of North America’s most heavily capitalized data center platforms, supported by over $7 billion in cumulative equity and financing commitments. At Google, as Sales Director from June 2011 to July 2015, he managed a sales portfolio exceeding $30 million in annual revenue and delivered more than $17 million in incremental growth. At Dell, as Senior Sales Executive from December 2005 to June 2011, he achieved 125% quota attainment over multiple years while expanding enterprise sales coverage. Mr. Heitz is recognized for consistently driving scalable growth in complex sales environments through high-energy leadership, sophisticated deal execution, and a deep network across the enterprise infrastructure and data center sectors. Mr. Heitz holds a Bachelor of Science in Applied Life Sciences from the University of Illinois.
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George Chuang. Mr. Chuang has been the CEO of Lucy Labs, Inc., a proprietary trading firm focused on cryptocurrency, since 2017. He is recognized as a thought leader within the crypto finance industry, having served as an advisor to several crypto finance start-ups and spoken on multiple industry panels. Prior to founding Lucy Labs, Mr. Chuang held various operational and investment roles in private equity, venture capital, technology hardware, and equity sales and trading businesses in both Asia and the United States. He also previously served as a board member of Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL). Mr. Chuang holds an MBA from the Yale School of Management and a BA in Economics from the University of Chicago. We believe Mr. Chuang is qualified to serve as a director of BlockchAIn because of his extensive leadership experience in cryptocurrency and financial markets, his strong background in investment and operations across multiple sectors and geographies, and his prior board and advisory roles in both public and private companies.
Mohammad Hasham. Since February 2025, Mr. Hasham has been a Partner, West Region Leader, of CFO Advisory & Capital Markets, CohnReznick LLP. From March 2024 to February 2025, Mr. Hasham was Managing Director at CohnReznick LLP. From October 2022 to March 2024, Mr. Hasham was Managing Director at Grant Thornton LLP (US). From December 2018 to October 2022, Mr. Hasham was a Director of Technical Accounting at BDO USA LLP. From April 2015 to December 2018, Mr. Hasham was Senior Manager, Technical Accounting at SOAProjects, Inc. Mr. Hasham has CPA, CA and CMA certifications in Canada and a CPA certification in the United States. Mr. Hasham received his Bachelor of Business Administration from Wilfrid Laurier University in Waterloo, Canada. We believe Mr. Hasham is qualified to serve a director of BlockchAIn because of his career auditing both publicly-traded and privately-held companies and capital markets and consulting experience.
Daniel Nelson has served as a member of the BlockchAIn Board since March 16, 2026. Mr. Nelson was a member of the board of directors of Signing Day Sports, Inc. (“Signing Day Sports”) from July 2022 to March 2026, was Signing Day Sports’ President from August 2022 to November 2022, was Signing Day Sports’ Chief Executive Officer from November 2022 to March 2026, and was Signing Day Sports’ Chairman from March 2023 to March 2026. Mr. Nelson began working in the financial services industry in 1986. In 1997, Mr. Nelson formed, and has since served as chief executive officer of, Daniel Nelson Financial Services Inc. (“Daniel Nelson Financial Services”), which focuses on the employee benefits market. For more than 30 years, Mr. Nelson has acquired extensive knowledge and experience in the financial services arena. Mr. Nelson also formed Daniel Nelson Financial Services to provide financial guidance for all individuals. We believe that Mr. Nelson is qualified to serve as a director of BlockchAIn due to his experience in finance, particularly with respect to the sports management division of Daniel Nelson Financial Services.
Hongfei Zhang has served as a member of the BlockchAIn Board since March 16, 2026. Since 2012, Mr. Zhang has been the managing partner of Knightsbridge Investment Group, a private equity and venture capital firm investing in technology, biotech and consumer related business, Mr. Zhang currently serves on the board of several technology companies. Mr. Zhang was also the Vice Chair of Tsinghua Entrepreneur and Executive Club. From 2002 to 2012, Mr. Zhang served as Managing Director and Chief Risk Officer of Dexia Financial Products, a Franco-Belgian financial institution. From 2001 to 2002, Mr. Zhang worked for Deutsche Bank as Vice President. Before 2001, Mr. Zhang was a Director of investment at Nationwide Insurance Enterprise. Prior to his financial industry career, Mr. Zhang was a Professor at Ball State University and University of Texas at Austin. Mr. Zhang was also a research fellow at Argonne National Laboratory. Mr. Zhang is a Chartered Financial Analyst (CFA) and has a PhD in mathematics. We believe Mr. Zhang is qualified to serve as a director of BlockchAIn due to his capital markets experience, financial training, and advanced mathematics background.
Number and Terms of Office of Officers and Directors
Our Board currently consists of five members. The Board is classified into three classes serving staggered three-year terms: Class I, Class II and Class III. Directors for each class are to be elected at the annual meeting of stockholders in the year in which the term for their class expires. The Class I Directors were re-elected at the 2026 annual meeting of stockholders for a term expiring at the 2029 annual meeting, the Class II Directors have been elected for a term expiring at the 2027 annual meeting and the Class III Directors stand appointed for a term expiring at the 2028 annual meeting. Directors appointed to succeed those directors whose terms expire are appointed for a term of office to expire at the third succeeding annual general meeting after their appointment. Except as applicable law may otherwise require, in the interim between annual meetings of shareholders , additional directors and any vacancies in the board of directors, including unfilled vacancies resulting from the removal of directors for cause, may be filled by the vote of a majority of the remaining directors then in office, even though a quorum may not be present at any meeting of the directors, or by the sole remaining director. All directors hold office until the expiration of their respective terms of office and until their successors have been appointed. A director appointed to fill a vacancy resulting from the death, resignation or removal of a director serves for the remainder of the full term of the director whose death, resignation or removal has created the vacancy and until his successor has been appointed.
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Director Independence
The Board has determined that three of its five current members are “independent directors” as defined under the applicable rules of NYSE American and the Securities and Exchange Commission (the “SEC”). The three independent directors currently serving on the Board are Hongfei Zhang, Mohammad Hasham, and George Chuang. In making its determination of independence, the Board considered questionnaires completed by directors and any relationships and transactions between the Company and all entities with which the directors are involved. NYSE American’s listing rules require that the Board be comprised of a majority of independent directors.
Board Leadership Structure
Mr. Jerry Tang serves as Chairman of the Board of Directors and the Company’s Chief Executive Officer and President.
The Chairman of the Board typically presides at all meetings of the Board. The Chairman’s role also includes providing feedback on the direction and performance of the Company, setting the agenda of meetings of the Board of Directors and leading the Board of Directors in anticipating and responding to changes in our business.
Our Board of Directors has not established a policy on whether the same person should serve as both the principal executive officer of the Company and the Chairman of the Board or, if the roles are separate, whether the Chairman should be selected from the non-employee directors or should be an employee. Our Board believes that it should have the flexibility to periodically determine the leadership structure that it believes is best for the Company. Given the specific characteristics and circumstances of the Company, the Board believes that its current leadership structure will enhance and facilitate the implementation of the Company’s business strategy, including effective monitoring and objective evaluation of the Chief Executive Officer’s performance. Mr. Tang has been closely involved in developing the Company’s business strategy and has extensive management experience. The Board believes that these qualities uniquely qualify Mr. Tang to lead and facilitate informed Board discussions about the Company’s policies and operations and enable him to communicate effectively with the Board on strategic developments and other critical matters facing the Company, while also serving as the Chief Executive Officer and President, Mr. Tang is also responsible for developing the Company’s business strategy and managing its day-to-day leadership and performance.
The Board has not appointed a lead independent director at this time. Currently, the Board consists of five directors, three of whom are independent. All independent directors serve on one or more committees of the Board, are able to closely monitor the activities of the Company and meet in executive sessions without management present to discuss the Company’s business strategy and operations. Given the active involvement of all of the independent directors in the Company’s matters, the Board has determined that a lead independent director is not necessary at this time. Additionally, because the Company’s Chairman is appointed annually by the Company’s non-management directors, such directors are able to evaluate the leadership and performance of the Chairman each year.
Risk Oversight
Our Board is actively involved in oversight of risks that could affect the Company. This oversight is conducted primarily through the three standing committees of the Board, as disclosed in the descriptions of each of the committees herein, and in the charters of each of the committees, but the full Board has retained responsibility for overall supervision of risk management efforts as they relate to the key business risks we face. Management identifies, assesses and manages the risks most critical to our operations and will advise our Board regarding those matters. Areas of material risk may include operational, financial, legal and regulatory, human capital, information technology and security, and strategic and reputational risks. Our Board satisfies its oversight responsibility through the review and discussion, as needed, of regular reports directly from members of management responsible for oversight of particular risks within the Company. The Audit Committee considers and discusses financial risk exposures and business risk management. The Compensation Committee conducts an annual risk assessment and assesses and monitors whether any of the Company’s compensation policies and programs have the potential to encourage excessive risk-taking and remain consistent with the overall compensation philosophy and strategy of the Company. The Nominating and Corporate Governance Committee monitors the effectiveness of the Company’s corporate governance policies and the selection of prospective board members and their qualifications. The Board believes that the leadership structure described above facilitates the Board’s oversight of risks because it allows the Board, working through its committees, to participate actively in the oversight of management actions. The Board believes that its role in risk oversight does not affect the Board’s leadership structure.
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Like all businesses, we also face threats to our cybersecurity, as we are reliant upon information systems and the internet to conduct our business activities. In light of the pervasive and increasing threat from cyberattacks, the Audit Committee, with input from management, assesses the Company’s cybersecurity and other information technology risks and threats and the measures implemented by the Company to mitigate and prevent cybersecurity risks and to respond to data breach, and the Board will receive reports from management on cybersecurity matters as part of its regular oversight of the Company’s risk management practices. In the event of a cybersecurity incident that management determines to be potentially material, the Audit Committee would be informed promptly, and the full Board would be notified as appropriate based on the nature and severity of the incident.
Board Committees and Committee Member Independence
Our Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition of each committee as of the date of this Registration Statement is outlined in the table and footnote below. Our Board of Directors utilizes the NYSE American rules and independence standards in determining whether its members are independent.
| Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||
| George Chuang | X | X | C | |||
| Mohammad Hasham | C | X | X | |||
| Hongfei Zhang | X | C | X |
C — Indicates committee chair.
The Board of Directors has approved and adopted a written charter for each of the committees listed, copies of which are posted on the Company’s website, under the heading “Corporate Governance.” The Board of Directors may also establish from time to time any other committees that it deems necessary or desirable. Members serve on these committees until their resignation or until otherwise determined by the Board of Directors.
Audit Committee
BlockchAIn’s audit committee consists of Hongfei Zhang, Mohammad Hasham, and George Chuang. The BlockchAIn Board has determined that each member of the audit committee satisfies the independence requirements under the NYSE American’s rules and Rule 10A-3(b)(1) of the Exchange Act. The chairperson of the audit committee is Mr. Mohammad Hasham. The BlockchAIn Board has determined that Mr. Mohammad Hasham qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC. Each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, the BlockchAIn Board has examined each audit committee member’s scope of experience and the nature of their employment.
Compensation Committee
The compensation committee consists of Hongfei Zhang, Mohammad Hasham, and George Chuang. The chair of the compensation committee is Hongfei Zhang. The BlockchAIn Board has determined that each member of the compensation committee is independent under the NYSE American’s listing standards and a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee consists of Hongfei Zhang, Mohammad Hasham, and George Chuang. The chair of the nominating and corporate governance committee is George Chuang. The BlockchAIn Board has determined that each member of the nominating and corporate governance committee is independent under the NYSE American’s listing standards.
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Compensation Committee Interlocks and Insider Participation
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Code of Ethics
We have adopted a code of business conduct and ethics which is applicable to all officers, employees and directors of the Company. Our code of business conduct and ethics has been posted on our corporate website, under the heading “Corporate Governance.”
Corporate Governance Charter
We have adopted a Nominating and Corporate Governance Committee Charter that addresses the composition of the Board, criteria for Board membership and other Board governance matters. These guidelines are available on our website at https://oneblockchain.ai/www.dih.com on the “Corporate Governance” page.
Audit Committee Charter
We have adopted an Audit Committee Charter that addresses the Company’s accounting and financial reporting processes. These guidelines are available on our website at https://oneblockchain.ai/ on the “Corporate Governance” page.
Compensation Committee Charter
We have adopted a Compensation Committee Charter that addresses the Company’s compensation structure. These guidelines are available on our website at https://oneblockchain.ai/ on the “Corporate Governance” page.
Insider Trading Policy
We have adopted an insider trading policy available on our website at https://oneblockchain.ai/ on the “Corporate Governance” page.
Policy Prohibiting Hedging or Pledging of Securities
Under the Company’s Insider Trading Policy, all directors, officers and employees of the Company and its subsidiaries are prohibited from engaging in any hedging transactions involving Company securities, holding Company securities in a margin account or pledging Company securities as collateral.
Clawback Policy
We have adopted a Clawback Policy which is available on our website at https://oneblockchain.ai/ on the “Corporate Governance” page.
Conflicts of Interest
| ● | None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities. |
| ● | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
The conflicts described above may not be resolved in our favor.
Indemnification of Directors and Officers
The Company’s charter and bylaws provide that the Company will indemnify its directors and officers to the fullest extent permitted by Delaware law. In addition, the Company has entered into indemnification agreements with its directors and executive officers.
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EXECUTIVE AND DIRECTOR COMPENSATION
Executive Compensation
Our current named executive officers and employees include: Jerry Tang, our Chief Executive Officer, President and Chairman of the Board, Jolienne Halisky, our Chief Financial Officer, Eyal Rozen, our Chief Operating Officer, and Gary Heitz, our Vice President of Sales.
Prior to the consummation of the Business Combination, One Blockchain engaged Tiger Cloud, a One Blockchain Securityholder, to provide comprehensive management services, including operations management, strategic leadership, human resources, administrative workflow management, and other related management activities. Pursuant to our Management Fee Agreement with Tiger Cloud, dated February 8, 2024 (the “2024 Management Fee Agreement”), we paid an annual management fee of $318,700 for these services and for the year ended December 31, 2024; the labor allocation expense was included in the annual management fee. The fees paid pursuant to the 2024 Management Fee Agreement were allocated to compensate Mr. Tang and Ms. Halisky as officers of One Blockchain. Pursuant to our Management Fee Agreement with Tiger Cloud, dated February 13, 2026 (the “2025 Management Fee Agreement”), we paid an annual management fee of $284,000 for these services and for the year ended December 31, 2025, we incurred $239,000 of labor allocation expense. The fees paid pursuant to the 2025 Management Fee Agreement were allocated to compensate Mr. Tang, Ms. Halisky and Mr. Rozen, as officers of One Blockchain.
Pursuant to the terms of an agreement with Jolienne Halisky for the position of Chief Financial Officer, effective August 11, 2025, Ms. Halisky receives an annual base salary of $225,000 (payable in Canadian dollars), with eligibility for performance-based bonuses as determined by the Board, and potential equity or option awards if applicable. Ms. Halisky receives four weeks of paid vacation and five paid sick days per calendar year. Ms. Halisky is responsible for all Canadian tax obligations, and the company does not withhold or remit Canadian source deductions. If terminated without cause, she is entitled to six months of continued pay and any earned but unpaid bonus for the prior fiscal year. The agreement includes confidentiality, non-competition, and non-solicitation covenants, and provides for indemnification and D&O insurance coverage at commercially reasonable levels. The agreement is governed by Delaware law and includes an arbitration provision for dispute resolution.
Pursuant to the terms of an employment agreement with Eyal Rozen for the position of Chief Operating Officer, effective January 15, 2026, Mr. Rozen will receive an initial annual base salary of $250,000, which was increased to $300,000 effective April 15, 2026, payable semi-monthly, plus a one-time salary adjustment bonus of $12,500, which has been paid. He is eligible to receive an equity award of up to 4% of One Blockchain in at-the-money stock options, contingent on achievement of mutually agreed key performance indicators (KPIs) and subject to four-year vesting, as well as an annual discretionary cash bonus. Mr. Rozen also receives employee benefits, fifteen days paid time off and five sick days per year, and is subject to standard confidentiality and restrictive covenants. His employment is at-will, subject to execution of a Non-Disclosure and Restrictive Covenant Agreement and may be terminated by either party at any time, with or without cause or notice.
Pursuant to the terms of an offer letter with Gary Heitz for the position of Vice President of Sales, effective May 21, 2026, Mr. Heitz will receive an annual base salary of $210,000, payable semi-monthly, subject to adjustment at the company’s discretion. He is eligible for a commission bonus based on closed lease agreements: 0.5% of base rent actually collected for new deals directly originated and closed by him (payable over up to seven years from the rent commencement date), and 0.25% for existing pipeline deals at the negotiation stage as of his start date, both structured as 35% upon contract execution and 65% paid proportionally according to installation and customer acceptance. Mr. Heitz will participate in company medical benefit programs and receive fifteen days of paid time off and five sick days per year, both subject to pro-ration and carryover limitations. His employment is at-will and contingent upon execution of a Non-Disclosure and Restrictive Covenant Agreement, compliance with prior restrictive obligations, and authorization to work in the United States.
Following the consummation of the Business Combination, our Board may develop an executive compensation program that is designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, retain, incentivize and reward individuals who contribute to the long-term success of the Company. With respect to executive compensation, the primary goal of the Compensation Committee is to retain and motivate highly skilled executives by aligning their pay with the Company’s performance and stockholder returns.
Once our compensation program is established, our Board expects to review director and executive compensation periodically to ensure that its director and executive compensation remains competitive such that the Company is able to recruit and retain qualified directors and executives. Once the terms of executive compensation have been finalized, we will file the appropriate disclosures with the Securities Exchange Commission.
The Company anticipates that the compensation program will primarily consist of (i) base salary, (ii) a discretionary cash bonus, (iii) equity-based incentive awards, (iv) retirement benefits in the form of Company paid matching and profit sharing contributions to the Company’s 401(k) retirement plan, and (v) premiums paid by the Company on the behalf of our employees for health, dental, life and other ancillary insurance coverage.
Summary Compensation Table
Prior to the Business Combination, certain of our named executive officers were engaged as consultants during 2025 and were compensated through the Management Fee Agreements disclosed above. They did not receive compensation from the Company during that time.
Employment Agreements
The Company has not entered into employment agreements with any of its executive officers. Each executive officer is employed on an at-will basis and serves at the discretion of the Board of Directors.
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Outstanding Equity Awards at Fiscal Year-End
There are no outstanding equity awards at the end of the fiscal year.
| OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR END | ||||||||||||||||||||||||||||||||||||
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option (#)(1) | Option exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
| Jerry Tang, CEO and President | 0 | 0 | 0 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Jolienne Halisky, CFO | 0 | 0 | 0 | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Eyal Rozen, COO | 0 | 0 | 0 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Compensation Committee Interlocks and Insider Participation
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Pension Benefits
None of our named executive officers participate in or have account balances in qualified or nonqualified defined benefit plans sponsored by it.
Nonqualified Deferred Compensation
None of our named executive officers participate in or have account balances in nonqualified defined contribution plans or other deferred compensation plans maintained by it.
Equity Incentive Plans
The Company has adopted the 2026 Equity Incentive Plan (the “2026 Plan”), to promote the long-term success of the Company by attracting, motivating and retaining employees, directors, consultants and other service providers and aligning their interests with those of the Company’s stockholders. The 2026 Plan provides the Company with the flexibility to grant equity-based and cash-based incentive awards designed to encourage long-term value creation and promote ownership in the Company.
Types of Awards
The 2026 Plan authorizes the grant of a broad range of equity and incentive-based awards, including incentive stock options, SARs, performance stock awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards, unrestricted stock awards and non-qualified stock options or any combination of the foregoing. Awards granted under the 2026 Plan may be subject to vesting schedules, transfer restrictions, continued service requirements and/or the achievement of performance goals, as determined by the administrator of the 2026 Plan. Awards may be settled in shares of the Company’s common stock, cash or a combination thereof.
Eligible Participants
Employees, non-employee directors, officers, employees, nonemployee consultants and other non-service providers of BlockchAIn or its affiliates may be eligible to receive Awards under the 2026 Plan. Incentive stock options may only be granted to employees of the Company or certain of its subsidiaries. The Compensation Committee of the Board of Directors determines the participants who will receive awards under the 2026 Plan and the terms and conditions of such awards.
Share Reserve
As of the date of this prospectus, the aggregate number of shares of common stock reserved and available for grant and issuance under the plan is 7,526,299. The number of common stock reserved and available under the plan is subject to adjustment in the event of certain changes in the Company’s capitalization.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Unless the context otherwise requires, references in this section to (i) the “Company” refers to BlockchAIn Digital Infrastructure, Inc. and, with respect to periods prior to the consummation of the Business Combination, its predecessor, One Blockchain LLC (“One Blockchain”), and (ii) One Blockchain refers to the Company’s predecessor prior to the Business Combination.
Each of Atlas Cloud AI LLC, Tiger AIDC LLC, Tiger AIDC SC1 LLC, Tiger Cloud LLC (“Tiger Cloud”), VCV Digital Solutions LLC (“VCV Digital Solutions”), and VCV Digital Infrastructure Holdings LLC (“VCV Digital Infrastructure”) is an entity controlled by, or affiliated with, Jerry Tang, who is the Chief Executive Officer, President and a director of the Company.
Since January 1, 2025, the Company has engaged in the following transactions in which the amount involved exceeded $120,000 and in which any of our directors, executive officers or beneficial owners of more than 5% of our capital stock, or their respective affiliates, had a direct or indirect material interest.
Management Fee Agreements
2025 Management Fee Agreement
The Company engages Tiger Cloud to provide comprehensive management services for our CLT-01 facility, including operations management, strategic leadership, research and development, human resources, administrative workflow management, and other related management activities. Pursuant to our Management Fee Agreement with Tiger Cloud, dated February 13, 2026 (the “2025 Management Fee Agreement”), we pay an annual management fee of $284,000 for these services and for the year ended December 31, 2025 we incurred $239,000 of labor allocation expense.
2024 Management Fee Agreement
Pursuant to the Management Fee Agreement with Tiger Cloud, dated February 8, 2024, the Company engaged Tiger Cloud to provide certain management services, including operations management, strategic leadership, accounting, finance, budgeting, forecasting, human resources and audit and compliance services, among other. The Company paid an annual management fee of $318,700.
Surety Bond
As of December 31, 2025, the Company had a loan receivable of $1,083,460 which relates to funds loaned to VCV Digital Infrastructure to support its surety bond requirements. Specifically, One Blockchain provided funds for a commercial deposit (“CD”) in VCV Digital Solutions and to increase the LOC and surety bond. The loan is non-interest-bearing and is expected to be repaid based on contractual agreements between the parties. Specifically, under an Intercompany Loan Agreement, dated as of April 1, 2024, between One Blockchain and VCV Digital Infrastructure, One Blockchain provided a $1,045,315 loan to VCV Digital Solutions for a certificate of deposit that was issued to the Company by VCV Digital Solutions, a wholly-owned subsidiary of VCV Digital Infrastructure, and to support the financial guarantees under a letter of credit (the “LOC”) and the coverage amount under a surety bond, each of which are described further below. The loan is non-interest bearing and is expected to be repaid based on contractual agreements between the parties.
The LOC, as amended, provided for a credit balance of $3 million. The insurer reduced the required balance amount to $2,060,000 in December 2025. The parties to the LOC are Tiger Cloud as the account party; International Fidelity Insurance Company and/or Alleghany Casualty Company and/or HARCO National Insurance Company as the beneficiary; and JPMorgan Chase Bank, N.A. as the issuer. The LOC is irrevocable, and was originally scheduled to expire on August 31, 2025, but has been extended and is subject to automatic extension for additional one-year periods unless terminated at least 60 days prior to the applicable expiration date. The Surety Bond binds the Company, as principal, and HARCO National Insurance Company, as surety, to our local utility provider as beneficiary, in the amount of $8 million. The Surety Bond was required by our local utility provider to guarantee all obligations of payment pursuant to the Electric Service Agreement. The Surety Bond has terms with automatic annual renewal and can be terminated 60 days after receipt of written notice of cancellation.
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Loans and Accounts Receivable
Blue Ridge Digital Mining
In May 2025, VCV Digital Infrastructure Holdings, a related party, entered into a purchase agreement to acquire 100% of the equity interest in Blue Ridge Digital Mining, making it a wholly owned subsidiary. Concurrently with the transaction, the Company entered into a Purchase and Sale Agreement with Blue Ridge Digital Mining to acquire 60 Antbox containers for a total contractual consideration of $2,332,000, payable in 24 equal monthly installments of $97,167, beginning August 15, 2025, and ending July 15, 2027.
Under a Co-Location Agreement dated as of September 27, 2022 between Blue Ridge Digital Mining and the Company (the “Co-Location Agreement”), we provided hosting services to Blue Ridge Digital Mining, including approximately 9,600 square feet of space within 60 Antboxes and up to 40 MW of reserved power capacity at our CLT-01 facility. The agreement had a term of 44 months with options for renewal upon mutual agreement. The Co-Location Agreement provided for Blue Ridge Digital Mining to pay a base license fee (the “Base License Fee”) consisting of $153,069 for first month, $1,956,400 per month for months 2 through 41, and, in the subsequent three months, to $1,467,300, $978,200 and $489,100, respectively, based on use of 30 MW, 20 MW and 10 MW, respectively, and corresponding reduced square footage for the equipment, for such months. The license obligations under the Co-Location Agreement were superseded by the Co-Location Agreement Amendment and the Blue Ridge Digital Mining Settlement Agreement. Under Amendment No. 1 to the Co-Location Agreement, dated as of May 15, 2025 (the “Co-Location Agreement Amendment”), and the Related Party Revenue Transfer Agreement, dated as of May 15, 2025, between Blue Ridge Digital Mining and the Company (the “Related Party Revenue Transfer Agreement”), we became entitled to all revenues of Blue Ridge Digital Mining derived from a Service Framework Agreement between Blue Ridge Digital Mining and Bitmain Technologies Georgia Limited, dated as of August 15, 2022 (the “Bitmain Agreement”).
From October 18, 2023, the payment obligations and related legal rights under the Co-Location Agreement and the MS Guarantee Agreement were made subject to a series of standstill agreements (collectively, the “Standstill Agreements”). Each of the Standstill Agreements generally provided for the scheduled payment of certain payment obligations of Blue Ridge Digital Mining under the Co-Location Agreement and the guarantee obligations of Merkle Standard LLC (“MS”) under the MS Guarantee Agreement, and deferred legal action by any of the parties under the Co-Location Agreement for a certain period, typically consisting of approximately one to three months. The following is a description of the three most recent Standstill Agreements. Under a Standstill Agreement, dated as of January 27, 2025, among Blue Ridge Digital Mining, MS, and One Blockchain, due to certain performance issues under the Co-Location Agreement and the MS Guarantee Agreement, the parties agreed not to file a lawsuit or exercise certain remedies under the Co-Location Agreement before 5:00 PM Eastern Time on February 28, 2025 (the “Standstill Period”). This Standstill Agreement provided, among other things, that Blue Ridge Digital Mining and MS were jointly and severally obligated to pay a total of $1,312,640 to One Blockchain by January 27, 2025. As of January 23, 2025, $656,320 had already been paid. The remaining $656,320 was due by January 27, 2025. One Blockchain was also obligated to pay Blue Ridge Digital Mining for all curtailment credits accrued from January 26, 2025 to the end of the Standstill Period except for a setoff right for any claim based on Blue Ridge Digital Mining having used more than an average of 32 MW of power over the entire Standstill Period. Under a Standstill Agreement, dated as of February 28, 2025, the parties extended the Standstill Period to end at 5:00 PM Eastern Time on March 31, 2025, which was automatically renewable through April 2025. This Standstill Agreement provided, among other things, that Blue Ridge Digital Mining and MS were jointly and severally obligated to pay a total of $1.1 million to One Blockchain by February 28, 2025, and an additional payment of $550,640, by March 5, 2025. If renewed, the payment rate for power would be $0.06/kwH for all capacity, to be paid by Blue Ridge and MS by March 28, 2025. Under a Standstill Agreement, dated as of April 25, 2025, Blue Ridge Digital Mining and MS jointly and severally agreed to make a final payment of $1.414 million to One Blockchain by April 28, 2025.
Under a Confidential Settlement Agreement, Mutual Release, and Separation Agreement, effective as of May 20, 2025, among Blue Ridge Digital Mining, MS), One Blockchain, VCV Digital Infrastructure, and Tiger Cloud (the “Blue Ridge Digital Mining Settlement Agreement”), VCV Digital Infrastructure was required to purchase Blue Ridge Digital Mining from MS and to pay MS $97,167 per month for 24 months, for a total of $2,332,000, pursuant to the Blue Ridge Equity Purchase Agreement (as defined below). The Blue Ridge Digital Mining Settlement Agreement further provided for, (1) a Contribution Agreement by and among MS, VCV Digital Infrastructure Holdings, Tiger Cloud, and Blue Ridge Digital Mining pursuant to which MS contributed a certain promissory note, dated September 29, 2022, executed by VCV Digital Infrastructure Holdings and Tiger Cloud to MS (the “MS Promissory Note”); (2) the Blue Ridge Equity Purchase Security Agreement (as defined below); (3) the Blue Ridge Equity Purchase Agreement Guaranty; and (4) a Bad Boy Personal Guaranty made by Jerry Tang in favor of MS, pursuant to which Tang agreed to certain guarantees with respect to VCV Digital Infrastructure Holdings, Tiger Cloud, and One Blockchain. The Blue Ridge Digital Mining Settlement Agreement further provided that the only assets held by Blue Ridge Digital Mining at the time of closing would be its rights under the Bitmain Agreement and the MS Promissory Note. Pursuant to the Blue Ridge Digital Mining Settlement Agreement, as of May 20, 2025, the Co-Location Agreement, the MS Guarantee Agreement, and the Standstill Agreements were terminated.
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On May 15, 2025, VCV Digital Infrastructure Holdings entered into a Purchase and Sale Agreement with MS to acquire 100% of the equity interests in Blue Ridge Digital Mining for $2,332,000 total to be paid in equal monthly installments of $97,167 from August 15, 2025 through July 15, 2027 (the “Blue Ridge Equity Purchase Agreement”).
Under the Co-Location Agreement Amendment and the Related Party Revenue Transfer Agreement, each dated as of May 15, 2025, we became entitled to all revenues of Blue Ridge Digital Mining derived from the Bitmain Agreement. Blue Ridge Digital Mining derives revenues under the Bitmain Agreement for server hosting, maintenance and/or operation services of $0.075 per kWh, subject to certain adjustments, which, pursuant to the Co-Location Agreement Amendment, will be passed directly to One Blockchain. In addition, One Blockchain will be entitled to 50% of certain credits received by Blue Ridge Digital Mining pursuant to the Bitmain Agreement related to the period prior to the date of the Co-Location Agreement Amendment.
One Blockchain
As of December 31, 2025, One Blockchain had accounts receivable from related parties totaling $2,144,506, arising from operational activities. These amounts are expected to be settled in the normal course of business. These related party receivables include $1,640,171 due from Tiger Cloud LLC and $504,335 due from VCV Digital Solutions. These balances reflect transactions related to the Company’s ongoing business operations and financial arrangements with related entities.
Equity Ownership
Tiger Cloud and VCV Digital Solutions, LLC, each of which is controlled by Mr. Tang, beneficially own an aggregate of 26,297,214 shares of the Company’s common stock.
Indemnification
The Company’s charter and bylaws provide that the Company will indemnify its directors and officers to the fullest extent permitted by Delaware law. In addition, the Company has entered into indemnification agreements with its directors and executive officers.
Related Party Policy
The Company has adopted a written related party transaction policy requiring that any related party transaction be reviewed and approved by the Audit Committee. In approving such transactions, the Audit Committee considers, among other factors, whether the transaction is on terms comparable to those that could be obtained at arm’s-length dealings with an unrelated third party and whether the transaction is in the best interests of the Company and its stockholders.
A “related person transaction” is a transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships, in which: (i) the Company or any of its subsidiaries is or will be a participant; (ii) any Related Party has or will have a direct or indirect material interest; and (iii) the amount involved exceeds, or is expected to exceed, the then-applicable threshold for potential disclosure under Item 404 of Regulation S-K adopted by the SEC. This also includes any material amendment or modification to an existing Related Party Transaction.
A “Related Party” means any person who is or was (since the beginning of the last fiscal year for which the Company was required to file an Annual Report on Form 10-K, even if such person does not presently serve in that role) an executive officer, director or nominee for director of the Company, any stockholder owning more than 5% of any class of the company’s voting securities, or an Immediate Family Member of any such person. “Immediate Family Member” means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a person, and any person (other than a tenant or an employee) sharing the household of such person.
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PRINCIPAL SECURITYHOLDERS
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of May 28, 2026 for:
| ● | each of our named executive officers; |
| ● | each of our directors; |
| ● | all of our executive officers and directors as a group; and |
| ● | each stockholder known by us to be the beneficial owner of more than 5% of our outstanding common stock. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days and shares of common stock underlying restricted stock units that may be settled within 60 days of the date of the table.
The percentage ownership columns in the table is based on 37,646,133 shares of our common stock issued and outstanding as of May 28, 2026.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all common stock that they beneficially own, subject to applicable community property laws.
Except as otherwise set forth below, the business address of each of the directors and executive officers is c/o BlockchAIn Digital Infrastructure, Inc., 1540 Broadway, Suite 1010, New York, NY 10036.
| Name of Beneficial Owner | Common Stock Beneficially Owned(1) | % of Class Beneficially Owned | ||||||
| More than 5% Stockholders: | ||||||||
| Tiger Cloud LLC(1) | 15,100,970 | 40.11 | % | |||||
| VCV Digital Solutions LLC(2) | 11,196,244 | 29.74 | % | |||||
| COAT Family LLC(3) | 3,188,220 | 8.46 | % | |||||
| Named Executive Officers and Directors | ||||||||
| Jerry Tang(4) | 26,297,214 | 69.85 | % | |||||
| Jolienne Halisky | — | * | ||||||
| Eyal Rozen | — | * | ||||||
| George Chuang | — | * | ||||||
| Mohammad Hasham | — | * | ||||||
| Daniel Nelson(5) | 40,444 | * | ||||||
| Hongfei Zhang | — | * | ||||||
| All Directors and Executive Officers as a group (7 persons) | 26,337,658 | 69.96 | % | |||||
| * | Represents beneficial ownership of less than 1% |
| (1) | Tiger Cloud LLC is the record holder of 15,100,970 shares of common stock. Jerry Tang is the managing member of Tiger Cloud LLC and, as such, may be deemed to have voting and dispositive power over the shares held by Tiger Cloud LLC. |
| (2) | VCV Digital Solutions LLC is the record holder of 11,196,244 shares of common stock. Jerry Tang is the managing member of VCV Digital Solutions LLC and, as such, may be deemed to have voting and dispositive power over the shares held by VCV Digital Solutions LLC. |
| (3) | The address of COAT Family LLC is 300 W 43rd St, New York, NY 10036. JTC Trust Company (Delaware) Limited (formerly First Republic Trust Company of Delaware) is the Trustee of the Trust. |
| (4) | Consists of (1) 11,196,244 shares of common stock held of record by VCV Digital Solutions LLC and (ii) 15,100,970 shares of common stock held of record by Tiger Cloud LLC. Mr. Tang is the managing member of each of Tiger Cloud LLC and VCV Digital Solutions LLC and, as such, may be deemed to have beneficial ownership of the shares held by each such entity. Mr. Tang disclaims any beneficial ownership of the securities held by VCV Digital Solutions LLC and Tiger Cloud LLC other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
| (5) | Consists of (i) 37,527 shares of common stock held of record by Mr. Nelson and (ii) 2,917 shares of common stock held of record by The Nelson Revocable Living Trust and, as such, Mr. Nelson may be deemed to have beneficial ownership of the shares held by such entity. |
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UNDERWRITING
Lucid Capital Markets, LLC (the “representative”) is acting as the representative of the underwriters and the book-running manager of this Offering. We have entered into an underwriting agreement dated June , 2026 with the representative. Under the terms of the underwriting agreement, which is filed as an exhibit to the registration statement, each of the underwriters named below has severally agreed to purchase from us the respective number of shares of common stock and Pre-funded Warrants shown opposite its name below:
| Underwriter | Number of Shares | Number
of Pre-funded Warrants | ||||||
| Lucid Capital Markets, LLC | [● | ] | [● | ] | ||||
| Total | [● | ] | [● | ] |
The underwriters are committed to purchase all shares of common stock and Pre-funded Warrants offered by us other than those covered by the option described below, if any are purchased. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.
Securities sold by the underwriters to the public will initially be offered at the public offering prices set forth on the cover of this prospectus. In addition, the underwriters may offer some of the shares to other securities dealers at such price less a concession of $ _____ per share. After the initial offering of the shares, the public offering price or any other term of the Offering may be changed by the underwriters.
Delivery of the securities is expected on or about ______, 2026, against payment in immediately available funds and subject to customary closing conditions.
Option to Purchase Additional Shares
We have granted to the underwriters an option to purchase up to 2,493,074 additional shares of our common stock, at the public offering price, less the underwriting discounts and commissions. This option is exercisable for a period of 45 days from the date of this prospectus. The underwriters may exercise this option solely for the purpose of covering overallotments, if any, made in connection with the sale of common stock offered hereby.
Discounts, Commissions and Expenses
The following table shows the public offering price, underwriting discounts and commissions and proceeds, before expenses, to us. These amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase additional shares.
| Total | ||||||||||||
| Per Share | Without Over-Allotment Option | With Over Allotment Option | ||||||||||
| Public offering price | $ | [●] | $ | [●] | $ | [●] | ||||||
| Underwriting discounts and commissions (6.0%) | $ | [●] | $ | [●] | $ | [●] | ||||||
| Proceeds to us, before expenses | $ | [●] | $ | [●] | $ | [●] | ||||||
In connection with the sale of the securities to be purchased by the underwriters, the underwriters will be deemed to have received compensation in the form of underwriting commissions, discounts, and fees. We have agreed to an underwriting discount of 6.0%. We have also agreed to reimburse the representative for legal and other out-of-pocket expenses incurred in connection with the offering, up to a maximum of $100,000, payable at the closing of this Offering. We estimate that our total expenses of this Offering, excluding the estimated underwriting discounts and commissions and out-of-pocket expenses, will be approximately $308,200.
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Indemnification
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
Lock-Up Agreements
We and each of our officers, directors and holders of 5% or more of our common stock and common stock equivalents on a fully-diluted basis have agreed to be subject to a lock-up period of 90 days following the closing of the Offering. This means that, during the applicable lock-up period, subject to certain exceptions, we may not issue, enter into an agreement to issue or announce the issuance or proposed issuance of the shares or any other securities convertible into, or exercisable or exchangeable for, shares of Common Stock, and such persons may not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any of our shares of Common Stock or any securities convertible into, or exercisable or exchangeable for, shares of Common Stock. The representative may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements.
Representative Warrants
The Company has agreed to issue to the representative, or its designees, warrants (“Representative Warrants”) to purchase up to a total of four percent (4%) of the shares of common stock and Pre-funded Warrants sold in this Offering (including any shares sold through the exercise of the underwriters’ option). The Representative Warrants are immediately exercisable upon issuance at an exercise price of $____ per share (110% of the public offering price) for a period of five (5) years from the commencement of sales of the offering in compliance with FINRA Rule 5110.
Pursuant to FINRA Rule 5110(e), the Representative Warrants and any shares of common stock issued upon exercise of the Representative Warrants shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of commencement of sales of this offering, except the transfer of any security: (i) by operation of law or by reason of reorganization of the issuer; (ii) to any FINRA member firm participating in the offering and the officers, partners, registered persons or affiliates thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period; (iii) if the aggregate amount of our securities held by the representative or related persons does not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund and the participating members in the aggregate do not own more than 10% of the equity in the fund; (v) the exercise or conversion of any security, if all securities remain subject to the lock-up restriction set forth above for the remainder of the time period; (vi) if we meet the registration requirements of Forms S-3, F-3 or F-10; or (vii) back to us in a transaction exempt from registration with the SEC. The Representative Warrants and the shares of common stock underlying the Representative Warrants are registered on the registration statement of which this prospectus forms a part.
Tail Fee
We have also agreed to pay the representative a tail fee equal to the compensation received in this offering if certain investors, first introduced in writing by the representative to the Company, purchase securities from the Company during the term of the representative’s engagement or within six (6) months following the expiration of its engagement with the Company, subject to certain conditions and exceptions.
Other Relationships
In the ordinary course of their business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
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Electronic Offer, Sale and Distribution of Shares
A prospectus in electronic format may be made available on the websites maintained by the underwriters, if any, participating in this offering and the underwriters participating in this offering may distribute prospectuses electronically. The underwriters may agree to allocate a number of shares for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriters that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or the underwriters in their capacity as underwriters, and should not be relied upon by investors.
Stabilization
In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.
| - | Stabilizing transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress. |
| - | Over-allotment transactions involve sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing shares in the open market. |
| - | Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which they may purchase shares through exercise of the over-allotment option. If the underwriters sell more shares than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering. |
| - | Penalty bids permits the underwriters to reclaim a selling concession from a syndicate member when the shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions. |
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of the Company’s common stock or preventing or retarding a decline in the market price of its common stock. As a result, the price of the Company’s common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither the Company nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of the Company’s common stock.
Determination of Offering Price
The public offering price was determined through negotiations between us and the underwriters. In addition to prevailing market conditions, the factors considered in determining the public offering price included the following:
| ● | the information set forth in this prospectus and otherwise available to the underwriters; |
| ● | the history and prospects for our Company and the industry in which we compete; |
| ● | our management, its past and present operations, and the prospects for, and timing of, our future revenues; |
| ● | our financial and operating information; |
| ● | our present state of development; |
| ● | valuation multiples of publicly traded companies that the underwriters believe are comparable to ours; |
| ● | general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant; and |
| ● | the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours. |
Neither we nor the underwriters can assure investors that an active trading market will continue to exist for shares of our common stock, or that our common stock will trade at or above the public offering price.
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DESCRIPTION OF SECURITIES
The Company’s capital stock is governed by the Company’s Amended and Restated Certificate of Incorporation, the Company’s Amended and Restated Bylaws and the Delaware General Corporation Law (“DGCL”). This description is a summary and is not complete. We urge you to read the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, which are filed as Exhibits 3.1 and 3.2, respectively to the registration statement of which this prospectus forms a part,
General
The authorized capital stock of the Company consists of 1,000,000,000 shares of Common Stock and 100,000,000 shares of preferred stock.
Dividend Rights
The DGCL permits a corporation to declare and pay dividends out of “surplus” or, if there is no “surplus”, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. “Surplus” is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the board of directors. The capital of the corporation is typically calculated to be (and cannot be less than) the aggregate par value of all issued shares of capital stock. Net assets equals the fair value of the total assets minus total liabilities. The DGCL also provides that dividends may not be paid out of net profits if, after the payment of the dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets. Delaware common law also imposes a solvency requirement in connection with the payment of dividends.
Subject to preferences that may apply to any shares of the Company’s preferred stock outstanding at the time, the holders of the Company’s common stock will be entitled to receive dividends out of funds legally available therefor if the Company’s board of directors, in its discretion, determines to authorize the issuance of dividends and then only at the times and in the amounts that the Company’s board of directors may determine.
Voting Rights
Holders of the Common Stock are entitled to one vote for each share held as of the record date for the determination of the stockholders entitled to vote on such matters, including the election and removal of directors, except as otherwise required by law. Under Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation specifically authorizes cumulative voting. The Company’s Amended and Restated Certificate of Incorporation does not authorize cumulative voting and provides that no shareholder is permitted to cumulate votes at any election of directors.
Right to Receive Liquidation Distributions
If the Company becomes subject to a liquidation, dissolution, or winding-up, the assets legally available for distribution to the Company’s stockholders would be distributable ratably among the holders of the Common Stock and any participating series of the Company’s preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of, and the payment of any liquidation preferences on, any outstanding shares of the Company’s preferred stock.
Other Matters
All outstanding shares of the Company’s Common Stock are fully paid and nonassessable. The Company’s common stock is not entitled to preemptive rights and is not subject to redemption or sinking fund provisions.
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Preferred Stock
There are no shares of preferred stock outstanding. The BlockchAIn Amended and Restated Certificate of Incorporation authorizes the issuance of 100,000,000 shares of preferred stock with such designation, rights and preferences as may be determined from time to time by the BlockchAIn Board. Accordingly, the BlockchAIn Board will be empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock. The preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future.
Board of Directors
The Company’s board of directors consists of five directors. The Amended and Restated Certificate of Incorporation provides that the number of directors shall be fixed exclusively by one or more resolutions adopted from time to time by the majority of the board of directors. Directors are elected by a plurality of all of the votes cast in the election of directors at an annual meeting of the stockholders of the Company.
Takeover Defense Provisions
Certain provisions of Delaware law may have the effect of delaying, deferring, or discouraging another person from acquiring control of the Company. They are also designed, in part, to encourage persons seeking to acquire control of the Company to negotiate first with the Company’s board of directors.
Section 203 of the DGCL
The Company is governed by the provisions of Section 203 of the DGCL. In general, Section 203 of the DGCL prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” (as those terms are defined in Section 203 of the DGCL) for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:
| ● | either the merger or the transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors prior to the time that the stockholder became an interested stockholder; |
| ● | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| ● | at or subsequent to the time the stockholder became an interested stockholder, the merger was approved by the Company’s board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. |
In general, Section 203 defines a “business combination” to include mergers, asset sales, and other transactions resulting in financial benefit to a stockholder and an “interested stockholder” as a person who, together with affiliates and associates, owns, or, within the prior three years, did own, 15% or more of the corporation’s outstanding voting stock. These provisions may have the effect of delaying, deferring, or preventing changes in control of the Company.
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Classified Board of Directors
The Amended and Restated Certificate of Incorporation provides that the Company’s board of directors is divided into three classes, designated as Class I, Class II and Class III. The Board is authorized to assign members of the Board already in office to Class I, Class II and Class III. The Class I Directors were re-elected at the 2026 annual meeting of stockholders for a term expiring at the 2029 annual meeting, the Class II Directors have been elected for a term expiring at the 2027 annual meeting and the Class III Directors stand appointed for a term expiring at the 2028 annual meeting. At each annual meeting of stockholders, successors to the class of directors whose term expires at that annual meeting will be elected for a three-year term.
Removal of Directors
The Amended and Restated Certificate of Incorporation provides that, subject to the special rights of the holders of one or more outstanding series of preferred stock to elect directors, the Company’s board of directors or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of voting stock of the Company entitled to vote at an election of directors.
Board of Directors Vacancies
The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws authorize only a majority of the remaining members of the Company’s board of directors, although less than a quorum, to fill vacant directorships, including newly created directorships. In addition, subject to the rights of holders of any series of the Company’s preferred stock, the number of directors constituting the Company’s board of directors is permitted to be set only by a resolution of the Company’s board of directors. These provisions prevent a stockholder from increasing the size of the Company’s board of directors and then gaining control of the Company’s board of directors by filling the resulting vacancies with its own nominees. This will make it more difficult to change the composition of the Company’s board of directors and will promote continuity of management.
Stockholder Action; Special Meeting of Stockholders
The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that the Company’s stockholders may not take action by written consent but may only take action at annual or special meetings of the stockholders. As a result, a holder controlling a majority of the Company’s capital stock will not be able to amend the Amended and Restated Bylaws, amend the Amended and Restated Certificate of Incorporation or remove directors without holding a meeting of the Company’s stockholders called in accordance with the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. The Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws further provide that special meetings of stockholders of the Company may be called only by the Company’s board of directors, the Chairperson of the Company’s board of directors, or the Chief Executive Officer or the President of the Company, thus prohibiting stockholder action to call a special meeting. These provisions might delay the ability of the Company’s stockholders to force consideration of a proposal or for stockholders controlling a majority of the Company’s capital stock to take any action, including the removal of directors.
Advance notice requirements for stockholder proposals and director nominations
The Amended and Restated Certificate of Incorporation provides that advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Company must be given in the manner and to the extent provided in the bylaws of the Company. The Amended and Restated Bylaws provide that, with respect to an annual meeting of the Company’s stockholders, nominations of persons for election to the board of directors and the proposal of other business to be transacted by the stockholders may be made only (i) pursuant to the Company’s notice of the meeting (or any supplement thereto), (ii) by or at the direction of the Company’s board of directors, (iii) as provided in the certificate of designation for any class or series of preferred stock or (iv) by any stockholder who was a stockholder of record at the time of giving the notice required by the Amended and Restated Amended and Restated Bylaws, at the record date(s) set by the board of directors for the purpose of determining stockholders entitled to notice of, and to vote at, the meeting, and at the time of the meeting, and who complies with the advance notice provisions of the Amended and Restated Bylaws.
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With respect to special meetings of stockholders, only the business specified in the Company’s notice of meeting may be brought before the meeting. Nominations of persons for election to the board of directors may be made only (i) by or at the direction of the Company’s board of directors or (ii) if the meeting has been called for the purpose of electing directors, by any stockholder who was a stockholder of record at the time of giving the notice required by the Amended and Restated Bylaws, at the record date(s) set by the board of directors for the purpose of determining stockholders entitled to notice of, and to vote at, the meeting, and at the time of the meeting, and who complies with the advance notice provisions of the Amended and Restated Bylaws.
The advance notice procedures of the Amended and Restated Bylaws provide that, to be timely, a stockholder’s notice with respect to director nominations or other proposals for an annual meeting must be delivered to the Company’s Secretary at the principal executive office of the Company not earlier than 8:00 a.m., local time, on the 150th day and no later than 5:00 p.m., local time, on the 120th day prior to the first anniversary of the date of the proxy statement (as defined in this Section 2.4(a)(ii)) for the preceding year’s annual meeting of stockholders (which anniversary date shall, for purposes of the Company’s first annual meeting after its shares of stock are first publicly traded, be deemed to be March 17, 2027). However, if no annual meeting of stockholders was held in the preceding year, or if the date of the applicable annual meeting is more than 30 days before or more than 60 days after the first anniversary of the preceding year’s annual meeting, then to be timely such notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the annual meeting and no later than the later of (A) 5:00 p.m., local time, on the 90th day before the meeting or (B) 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Company.
These provisions might preclude stockholders of the Company from bringing matters before the annual meeting of stockholders or from making nominations for directors at the annual meeting of stockholders if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
No cumulative voting
The DGCL provides that stockholders are not entitled to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. The Amended and Restated Certificate of Incorporation does not provide for cumulative voting and provides that no stockholder is permitted to cumulate votes at any election of directors.
Amendments to Certificate of Incorporation and Bylaws
Except for those amendments permitted to be made without stockholder approval under Delaware law or the Amended and Restated Certificate of Incorporation, the Amended and Restated Certificate of Incorporation generally may be amended only if the amendment is first declared advisable by the board of directors and thereafter approved by holders of a majority of the outstanding stock of the Company entitled to vote thereon. Any amendment of certain provisions in the Amended and Restated Certificate of Incorporation will require approval by holders of a majority of the total voting power of all the then outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class. These provisions include, among others, provisions related to the classified board structure, board composition, removal of directors, indemnification and exculpation, cumulative voting rights, preferred stock, exclusive forum provisions, provisions related to stockholder action and advance notice, corporate opportunities and amendments to the charter, in each case as summarized in this registration statement.
The Company’s board of directors have the power to adopt, amend or repeal any provision of the Amended and Restated Bylaws. The bylaws may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the affirmative vote of the holders of at least two-thirds of the total voting power of outstanding voting securities, voting together as a single class, shall be required for the stockholders of the Company to alter, amend or repeal, or adopt any bylaw inconsistent with, certain provisions of the bylaws.
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Authorized but Unissued Capital Stock
Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NYSE American, which would apply if and so long as the common stock remains listed on the NYSE American require stockholder approval of certain issuances equal to or exceeding 19.99% of the then-outstanding voting power or then-outstanding number of shares of common stock. Additional shares that may be issued in the future may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.
One of the effects of the existence of unissued and unreserved common stock may be to enable the Company’s board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise and thereby protect the continuity of management and possibly deprive stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.
Exclusive Forum
Section 12.1 of the Amended and Restated Certificate of Incorporation provides that, unless otherwise consented to by the Company in writing, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings: (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL or the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws, or (iv) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding the foregoing, (i) the foregoing will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Although the Amended and Restated Certificate of Incorporation contains the choice of forum provisions described above, it is possible that a court could rule that such provisions are inapplicable for a particular claim or action or that such provisions are unenforceable.
The Amended and Restated Certificate of Incorporation further provides that if any action the subject matter of which is within the scope of Section 12.1 of the Amended and Restated Certificate of Incorporation is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 11.1 of the Amended and Restated Certificate of Incorporation (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. In addition, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and, therefore, the exclusive forum provisions described above do not apply to any actions brought under the Exchange Act.
Although we believe these provisions benefit us by limiting costly and time-consuming litigation in multiple forums and by providing increased consistency in the application of applicable law, these exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and other employees.
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Limitations on Liability and Indemnification of Directors and Officers
The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. The Company’s Amended and Restated Certificate of Incorporation includes a provision that eliminates the personal liability of directors for monetary damages for any breach of fiduciary duty as a director to the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended from time to time. The effect of these provisions is to eliminate the rights of the Company and its stockholders, through stockholders’ derivative suits on the Company’s behalf, to recover monetary damages from a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However, exculpation does not apply to any director if the director has acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper benefit from his or her actions as a director.
The Company’s Amended and Restated Certificate of Incorporation permits and the Amended and Restated Bylaws obligate the Company to indemnify, to the fullest extent permitted by the DGCL, any director or officer of the Company who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise or non-profit entity, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. The Company will not be obligated to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person unless the Proceeding (or part thereof) was, or is, authorized by the board of directors, the Company determines to provide the indemnification or is otherwise required by applicable law. In addition, the Amended and Restated Bylaws require the Company, to the fullest extent permitted by law, to pay, in advance of the final disposition of a Proceeding, expenses (including attorneys’ fees) actually and reasonably incurred by an officer or director of the Company in defending any Proceeding, upon receipt of a written request therefor (together with documentation reasonably evidencing such expenses) and an undertaking by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under the Amended and Restated Bylaws or the DGCL.
The Company entered into an indemnification agreement with each of its directors and executive officers that provide for indemnification to the maximum extent permitted by Delaware law.
The Company believes that these indemnification and advancement provisions and insurance are useful to attract and retain qualified directors and executive officers. The limitation of liability and indemnification provisions in the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and its stockholders. In addition, your investment may be adversely affected to the extent the Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.
Transfer Agent
The Transfer Agent for our securities is Securities Transfer Corporation.
Listing of Common Stock and Warrants
The Common Stock of the Company trades on the NYSE American under the symbol “AIB.”
Pre-Funded Warrants
The following description is a summary of some of the terms of the Pre-funded Warrants that are being offered hereby. The descriptions in this prospectus of the Pre-funded Warrants do not purport to be complete and are subject to, and qualified in their entirety by reference to, the provisions of the Pre-funded Warrant, the form of which will be filed as an exhibit to this registration statement. Prospective investors should carefully review the terms and provisions of the form of Pre-funded Warrant for a complete description of the terms and conditions of the Pre-funded Warrants.
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Term and Exercise Price
Each Pre-funded Warrant offered hereby will have an initial exercise price per share equal to $0.0001. The Pre-funded Warrants will be immediately exercisable and may be exercised at any time until the Pre-funded Warrants are exercised in full. The Pre-funded Warrants will be issued in certificated form only.
The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations, or similar events affecting our common stock and the exercise price. The Pre-funded Warrants will be issued separately from the shares of common stock and may be transferred separately immediately thereafter.
Cashless Exercise
If, at any time after the holder’s purchase of Pre-funded Warrants, such holder exercises its Pre-funded Warrants, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder shall instead receive upon such exercise (either in whole or in part) only the net number of shares of common stock determined according to a formula set forth in the Pre-funded Warrants.
Exercisability
The Pre-funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise.
Exercise Limitation
Under the terms of the Pre-funded Warrants, the Company may not affect the exercise of any such warrant, and a holder will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates, any other persons acting as a group together with the holder or any of the holder’s affiliates, and any other persons whose beneficial ownership of our common stock would or could be aggregated with the holder’s for purposes of section 13(d) or section 16 of the exchange act) would exceed 4.99% (or, at the election of the purchaser, 9.99%) of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such Pre-funded Warrant. Such percentage may be increased or decreased by written notice by the holder of the Pre-funded Warrants to any other percentage not in excess of 9.99%. Any such increase will not be effective until the 61st day after such notice is delivered to us, provided that such percentage may in no event exceed 9.99%.
Transferability
Subject to applicable laws, a Pre-funded Warrant may be transferred at the option of the holder upon surrender of the Pre-funded Warrant to us together with the appropriate instruments of transfer and funds sufficient to pay any transfer taxes payable upon such transfer.
Exchange Listing
There is no trading market available for the Pre-funded Warrants on any securities exchange or nationally recognized trading system, and we do not expect a trading market to develop. We do not intend to list the Pre-funded Warrants on the NYSE American, any other national securities exchange, or any other nationally recognized trading system. Without a trading market, the liquidity of the Pre-funded Warrants will be extremely limited.
Fundamental Transactions
Upon the consummation of a fundamental transaction (as described in the Pre-funded Warrants, and generally including any reorganization, recapitalization, or reclassification of our shares of common stock, the sale, transfer, or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding shares of common stock, or any person or group becoming the beneficial owner of 50% of the voting power of our outstanding shares of common stock), the holders of the Pre-funded Warrants will be entitled to receive, upon exercise of the Pre-funded Warrants, the kind and amount of securities, cash, or other property that such holders would have received had they exercised the Pre-funded Warrants immediately prior to such fundamental transaction, without regard to any limitations on exercise contained in the Pre-funded Warrants.
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No Rights as a Stockholder
Except by virtue of such holder’s ownership of shares of common stock, the holder of a Pre-funded Warrant does not have the rights or privileges of a holder of shares of our common stock, including any voting rights, until such holder exercises the Pre-funded Warrant.
Representative Warrants
The following description is a summary of some of the terms of the Representative Warrants that are being offered hereby. The descriptions in this prospectus of the Representative Warrants do not purport to be complete and are subject to, and qualified in their entirety by reference to, the provisions of the Representative Warrant, the form of which will be filed as an exhibit to this registration statement. Prospective investors should carefully review the terms and provisions of the form of Representative Warrant for a complete description of the terms and conditions of the Representative Warrants.
Duration and Exercise Price
Each Representative Warrant offered hereby will have an initial exercise price equal to $____ per share of common stock (110% of the public offering price per share of common stock). The Representative Warrants will be immediately exercisable upon issuance and will expire five years from the commencement of sales in this offering. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price.
Exercisability
The Representative Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Representative Warrants to the extent that the holder would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of beneficial ownership of outstanding stock after exercising the holder’s Representative Warrant up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Representative Warrants and in accordance with the rules and regulations of the SEC.
Cashless Exercise
In lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the Representative Warrants.
Fractional Shares
No fractional shares of common stock will be issued upon the exercise of the Representative Warrants. Rather, the number of shares of common stock to be issued will be rounded up to the nearest whole number.
Transferability
Subject to applicable laws and certain exceptions, the Representative Warrants may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of commencement of sales of this offering.
Trading Market
There is no trading market available for the Representative Warrants on any securities exchange or nationally recognized trading system, and we do not expect a trading market to develop. We do not intend to list the Representative Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Representative Warrants will be extremely limited. The common stock issuable upon exercise of the Representative Warrants will be listed on the NYSE American in connection with this offering.
86
LEGAL MATTERS
The validity of the securities being offered by this registration statement will be passed upon for us by Loeb & Loeb LLP. Ellenoff Grossman & Schole LLP is acting as counsel to the underwriters.
EXPERTS
The consolidated financial statements of One Blockchain LLC (formerly known as BV Power Alpha LLC) as of December 31, 2024 for the fiscal year then ended, included in this prospectus have been so included in the reliance on the report of Berkowitz Pollack Brant Advisors + CPAs., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of BlockchAIn Digital Infrastructure, Inc. as of December 31, 2025 for the fiscal year then ended, included in this prospectus have been so included in the reliance on the report of Carr Riggs & Ingram, LLC, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1, including exhibits, under the Securities Act, with respect to the securities offered by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information pertaining to us and our securities, you should refer to the registration statement and our exhibits.
In addition, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public on a website maintained by the SEC located at www.sec.gov. We also maintain a website at https://oneblockchain.ai/. statements and other information as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus.
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INDEX TO FINANCIAL STATEMENTS
| Page | ||
| BlockchAIn Digital Infrastructure, Inc. Unaudited Financial Statements | ||
| Consolidated Balance Sheets as of March 31, 2026 | F-2 | |
| Consolidated Statements of Operations for the three months ended March 31, 2026 | F-3 | |
| Consolidated Statements of Changes in Stockholders’ Equity | F-4 | |
| Consolidated Statements of Cash Flows for the three months ended March 31, 2026 | F-5 | |
| Notes to Consolidated Financial Statements | F-6 |
| Page | |
| BlockchAIn Digital Infrastructure, Inc. Audited Financial Statements | |
| Reports of Independent Registered Public Accounting Firms (PCAOB IDs 213 & 52) | F-22 – F-25 |
| Consolidated Balance Sheets | F-26 |
| Consolidated Statements of Operations | F-27 |
| Consolidated Statements of Changes in Stockholders’ Equity | F-28 |
| Consolidated Statements of Cash Flows | F-29 |
| Notes to Consolidated Financial Statements | F-30 |
F-1
BlockchAIn Digital Infrastructure, Inc.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Due from related party, net (Note 12) | ||||||||
| Loan receivable - related party (Note 12) | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net (Note 3) | ||||||||
| Intangible assets (Note 4) | ||||||||
| Goodwill (Note 4) | ||||||||
| Operating lease right-of-use assets, net (Note 6) | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Contract liabilities (Note 5) | ||||||||
| Consideration payable, current portion (Note 3) | ||||||||
| Operating lease liabilities, current portion (Note 6) | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Consideration payable, net of current portion (Note 3) | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 11) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F-2
BlockchAIn Digital Infrastructure, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| Revenues (Note 5) | $ | $ | ||||||
| Costs and operating expenses: | ||||||||
| Cost of revenues | ||||||||
| Depreciation and amortization (Note 3) | ||||||||
| Selling, general and administrative expenses (Note 4) | ||||||||
| Total costs and operating expenses | ||||||||
| (Loss) income from operations | ( | ) | ||||||
| Other income (expense) | ||||||||
| Gain on disposal of assets held for sale (Note 3) | ||||||||
| Other income (expense) | ( | ) | ||||||
| Total other income | ||||||||
| Net (loss) income attributable to common stockholders | $ | ( | ) | $ | ||||
| Basic and diluted net (loss) income per share (Note 9) | $ | ( | ) | $ | ||||
| Weighted average shares outstanding – basic and diluted (Note 9) | ||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F-3
BlockchAIn Digital Infrastructure, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total Stockholders’ Equity | ||||||||||||||||||||||||
| (Shares) | (Amount) | (Shares) | (Amount) | |||||||||||||||||||||||||
| Balance at December 31, 2024 (pre-Business Combination) | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Contributions | - | - | ||||||||||||||||||||||||||
| Distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Balance at December 31, 2025 (pre-Business Combination) | $ | $ | ||||||||||||||||||||||||||
| Recapitalization: One Blockchain members’ equity into BlockchAIn common stock | - | ( | ) | |||||||||||||||||||||||||
| Shares issued to SGN stockholders | - | |||||||||||||||||||||||||||
| Maxim Group advisory shares | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F-4
BlockchAIn Digital Infrastructure, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Gain on disposal of assets held for sale (Note 3) | ( | ) | ||||||
| Non-cash advisory shares (Note 4) | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid and other current assets | ||||||||
| Operating lease right of use assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Contract liabilities | ( | ) | ||||||
| Lease liabilities | ||||||||
| Other current liabilities | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Cash acquired in reverse merger (Note 4) | ||||||||
| Proceeds from sale of assets held for sale (Note 3) | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Contributions | ||||||||
| Distributions | ( | ) | ||||||
| Repayments of consideration payable | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net increase in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F-5
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | ORGANIZATION AND DESCRIPTION OF BUSINESS |
BlockchAIn Digital Infrastructure, Inc. (the “Company” or “BlockchAIn” or “we”) is a Delaware corporation formed as a holding company. The Company operates through its wholly owned subsidiary, One Blockchain LLC (“One Blockchain” or “OBC”), which is engaged in data center operations and digital asset infrastructure services. One Blockchain primarily operates a high-performance computing facility in Spartanburg County, South Carolina, providing power infrastructure, hosting services, and equipment leasing to customers engaged in blockchain computing, artificial intelligence (“AI”), and high-performance data processing.
The Company’s core operations include hosting services, and leasing space, power capacity, and equipment within its data center facility to customers requiring computing power.
On May 27, 2025, the Company entered into a Business Combination Agreement (“BCA”) with Signing Day Sports, Inc. (“SGN” or “Signing Day Sports”), One Blockchain, and the other parties thereto, as amended on November 10, 2025, and as further amended on December 22, 2025.
Effective March 16, 2026 (the “transaction date”), the Company and SGN announced the successful completion of the business combination under the previously announced BCA. Under the BCA the Company is now the parent entity of both SGN and One Blockchain. The Company commenced trading on NYSE American on March 17, 2026, under the ticker symbol “AIB”. For additional details regarding the acquisition and the fair value measurements, refer to “Note 4 - Business Combination and Control Obtained by a Related Party.” See Note 11 - Commitments and Contingencies.
On September 5, 2025, One Blockchain formed a wholly owned subsidiary, One Blockchain Nolan LLC, to support the expansion of its operations into the Texas market. The One Blockchain Nolan LLC subsidiary is now a sub-subsidiary (wholly owned by One Blockchain, which is wholly owned by BlockchAIn). The sub-subsidiary is expected to facilitate the development of new data center infrastructure.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the SEC. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the periods indicated.
All intercompany transactions with consolidated entities have been eliminated in consolidation.
Emerging Growth Company
The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933 (“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, the Company may take advantage of certain exemptions from various reporting requirements that are applicable to public companies not considered emerging growth companies. These exemptions include, but are not limited to, (i) not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, (ii) reduced disclosure requirements regarding executive compensation in its periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
F-6
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such option is irrevocable. The Company has decided against opting out of such an extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company that is neither an emerging growth company, nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
Significant items subject to such estimates include (i) useful lives assigned to property and equipment, (ii) the discount rate used for operating leases, (iii) estimates used to assess goodwill impairment, (iv) estimates of value of acquired intangible assets, (v) estimates of value to assess impairment of long-lived assets, (vi) the initial measurement of lease liabilities, and (vii) estimated energy costs used for the utility true-up adjustment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts its estimates when facts and circumstances dictate. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could materially differ from those estimates.
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in assessing performance and allocating resources. The Company, through its Chief Executive Officer in his role as chief operating decision-maker (“CODM”), views Company operations and manages the business as one operating segment.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606. Substantially all of the Company’s revenues are generated from hosting services.
Hosting Services
The Company generates revenue from contracts with customers for hosting services, enabling customers to engage in blockchain computing, AI and high-performance data processing. Hosting services include providing its customers with secure rack space, power capacity, security, and equipment within its data center facility. The Company has a stand-ready obligation to provide continuous access to power and cooling capacity. Under most of the Company’s contracts, this service is provided for an agreed upon period of time and for a set price. The Company recognizes the related revenue ratably over the contract period as it satisfies its performance obligations. This revenue does not include amounts collected on behalf of third parties, including sales and indirect taxes.
F-7
The Company has certain hosting service contracts for which revenue is recognized as services are performed on a variable basis. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, collection is probable, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s satisfaction of the performance obligation). The Company generally bills its customers monthly, in advance of services provided, based on the terms and consideration under the contract.
Additionally, the Company’s hosting service agreements may include provisions for variable consideration in the form of service level credits, performance bonuses, retroactive price adjustments (“true-ups”) or price concessions agreed upon with customers. These concessions may take the form of reductions in contractual amounts, curtailment credits, or other price adjustments. Adjustments are generally related to guaranteed uptime availability, power usage effectiveness targets, or curtailment events. The Company estimates the amount of variable consideration at the inception of the contract and updates the estimate at the end of each reporting period. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Credits due to customers for true-ups that will be applied against future invoices are recorded as a refund liability and included within other current liabilities on the condensed consolidated balance sheet.
The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days. Billings are typically collected within 30 days. The timing of revenue recognition, billings, and cash collections results in deferred revenue in the accompanying condensed consolidated balance sheets. Certain customers are billed in advance and true-ups are billed in arrears of services provided, in accordance with the agreed-upon contractual terms. The Company requires a security deposit that is subject to increases based upon the customer’s energy usage.
Contract Balances and Accounts Receivable
The timing of revenue recognition, invoicing and cash collections results in accounts receivables, contract assets and contract liabilities (deferred revenue) on the condensed consolidated balance sheets.
The Company estimates an allowance for credit losses based on a lifetime loss methodology in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”). This allowance reflects the Company’s estimate of the net amount expected to be collected from its customers. The Company analyzes current economic conditions, customer creditworthiness, historical loss rates, and specific customer concentrations. A specific reserve is established for individual accounts where collection is deemed doubtful due to the customer’s financial condition or insolvency. Account balances are written off against the allowance after all means of collection have been exhausted and management determines the potential for recovery is remote. To mitigate credit risk, the Company generally requires security deposits for power consumption and, in certain cases, retains a security interest in the customer’s computer equipment located within the Company’s data center facilities until payment obligations are met. As of March 31, 2026 and December 31, 2025, there was no allowance for credit losses.
Distinct from the allowance for expected credit losses, the Company records a provision for estimated service level agreement credits, billing disputes, and price concessions. These provisions are based on an analysis of historical credit issuance and known service events. These amounts are recorded as a reduction of revenue and a corresponding reduction of accounts receivable (or as a refund liability), rather than as bad debt expense.
Deferred revenue represents the Company’s obligation to transfer services to a customer for which it has received consideration from the customer. This primarily consists of prepaid hosting fees. Revenue is recognized as the related performance obligations are satisfied over the contract term. Deferred revenue is included in other current liabilities in the condensed consolidated balance sheets.
F-8
Concentration of Credit Risk
Financial instruments may expose the Company to concentrations of credit risk, and consist of cash, accounts receivable, and loan receivable – related party. The carrying value of all these financial instruments approximates fair value.
The Company maintains cash balances at financial institutions in excess of federally insured limits. The Company has not experienced any losses related to these balances. The Federal Deposit Insurance Corporation insures eligible accounts up to $
The Company’s accounts receivable are derived from revenue earned from customers located in the United States. Substantially all of the Company’s revenues for the three months ended March 31, 2026 were derived from two customers and
Approximately
As of March 31, 2026 and December 31, 2025, the Company had a loan receivable of $
The Company has no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.
Cost of Revenues and Utility True-Up Adjustment
The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes, and timing of adjustments. The annual true-up credit or charge is typically invoiced in Q3 of the following year.
The true-up expense was $
Cash
Cash consists of cash on hand and demand deposits maintained with high-credit-quality financial institutions. The Company does not currently hold money market funds, commercial paper, or other cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company monitors the financial health of these institutions and believes it is not exposed to significant credit risk.
F-9
Accounts Receivables
Accounts receivable are recorded at the invoiced amount and do not bear interest. A receivable is recognized in the period when the Company has transferred services to its customers and its right to consideration is unconditional. Payment terms and conditions vary by contract type but generally require payment within 30 days of the invoice date.
Property and Equipment
Property and equipment are stated at original cost or initial fair value for property and equipment acquired through business combinations or asset acquisition, net of depreciation. Depreciation for computer equipment, infrastructure equipment, transformers, and leasehold improvements commences once they are ready for their intended use. Major improvements that enhance the functionality or extend the asset’s useful life are capitalized, while routine maintenance and repairs are expensed as incurred. Leasehold improvements and integral equipment at leased locations are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement. Upon disposal or retirement, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the condensed consolidated statement of operations.
During the year ended December 31, 2025, the Company acquired Antbox containers for total consideration of $
Depreciation is calculated on a straight-line basis over the estimated useful lives of asset as follows:
| Property and equipment | Useful life (years) | |
| Compute equipment | ||
| Infrastructure equipment | ||
| Transformers | ||
| Leasehold improvements |
The Company reviews its property and equipment for impairment, together with lease right-of-use assets, at the asset group level; the lowest level at which the asset group generates identifiable cash flows. We reassess whether a change to an asset group is necessary when we experience a significant change in our operations or in the way we utilize long-lived assets that causes a change to the interdependency of cash flows. We review an asset group for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, such as a significant decrease in market price of an asset, a significant adverse change in the extent or manner in which an asset or an asset group is being used or its physical condition, a significant adverse change in legal factors or business climate that could affect the value of an asset or an asset group, or a continuous deterioration of our financial condition. Recoverability of asset groups to be held and used is assessed by comparing the carrying amount of an asset group to estimated undiscounted future net cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which its carrying amount exceeds its fair value. No impairment charges were recorded during the three months ended March 31, 2026 and 2025.
Goodwill
Goodwill represents the excess purchase consideration of an acquired business over the fair value of its net tangible and identifiable intangible assets. Goodwill is not amortized and is tested for impairment at least annually or more often if and when circumstances indicate that goodwill is not recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate, or a significant decrease in expected cash flows. No impairment charges were recorded with respect to goodwill for the three months ended March 31, 2026 and 2025.
F-10
Leases
The Company enters into lease arrangements primarily for land, data center spaces, and equipment. In accordance with ASC 842, Leases, the Company assesses whether an arrangement contains a lease at contract inception. When an arrangement contains a lease, the Company categorizes leases with contractual terms longer than twelve months as either operating or finance.
The Company records right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated balance sheets for all leases with a term for longer than 12 months, including renewal options that the Company is reasonably certain to exercise. ROU assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the lease commencement date. When there is a lease modification or a change in lease term triggered by a reassessment event, we reassess its classification and remeasure the ROU asset and lease liability.
Lease liabilities are initially measured based on the present value of fixed lease payments over the term of the lease. As the rate implicit in the Company’s lease is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.
The majority of our lease arrangements include options to extend the lease. If we are reasonably certain to exercise such options, the periods covered by the options are included in the lease term. The depreciable lives of leasehold improvements are limited by the expected lease term and the Company performs an assessment annually to determine if renewal options in leases are certain to be exercised. For leases with a term of 12 months or less, the Company has elected not to recognize any ROU asset or lease liability on the consolidated balance sheet. Where there are lease agreements with lease and non-lease components, the Company has elected to account for the lease and non-lease components as a single lease component for all classes of underlying assets that are identified as lease arrangements.
As described above, we perform a review at least annually of all long-lived assets, including ROU assets, at the asset group level for impairment by assessing events or changes in circumstances that indicate the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is assessed by comparing the carrying amount of an asset group to estimated undiscounted future net cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which its carrying amount exceeds its fair value. impairment charges were recorded during the three months ended March 31, 2026 and 2025. See Note 6 – Leases for additional information.
Fair Value of Financial Instruments
The carrying values of cash represents fair value. The carrying values of accounts receivable, accrued revenues, accounts payable, and accrued expenses approximate their fair values primarily due to the short-term maturity of the related instruments. The fair value of loan receivable is estimated by discounting the contractual cash flows, using indicative pricing from third parties for similar instruments and asset-specific yield adjustments for elements such as credit risk.
Stockholders’ Equity (As of the transaction date)
As of March 16, 2026, the Company was authorized to issue
F-11
Earnings Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by adjusting the weighted-average number of shares outstanding for the dilutive effect of potential common shares, such as stock options and warrants, using the treasury stock method. In periods of net loss, diluted loss per share equals basic loss per share, as the inclusion of potential common shares would be anti-dilutive. For the three months ended March 31, 2026 and 2025, earnings per share is calculated based on outstanding shares acquired from the transaction.
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized.
No interest or penalties were recognized for the three months ended March 31, 2026 and 2025.
Recent Accounting Pronouncements
Accounting Standards Not Yet Adopted
Accounting Standards Update (“ASU”) No. 2024-03, Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. Under the standard, the accounting guidance improves the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Management is still evaluating the impact on the Company’s condensed consolidated financial statements.
ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments are intended to improve the guidance related to interim financial reporting by enhancing the clarity and organization of required interim disclosures and clarifying when such guidance is applicable. The update provides additional guidance on the form and content of interim financial statements, compiles a comprehensive list of interim disclosure requirements within Topic 270, and introduces a disclosure principle requiring entities to disclose events and changes that occur after the most recent annual reporting period that materially affect the entity.
The amendments in ASU No. 2025-11 do not change the fundamental nature of interim reporting and are not intended to expand or reduce existing disclosure requirements, but rather are intended to provide greater clarity and consistency in the application of current guidance.
ASU No. 2025-11 is effective for interim reporting periods within fiscal years beginning after December 15, 2027 for public business entities. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.
F-12
Accounting Standards Recently Adopted
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments clarify certain aspects of the current expected credit loss model as it applies to trade receivables and contract assets. The guidance is effective for public business entities for fiscal years beginning after December 15, 2025, including interim reporting periods within those fiscal years. The Company adopted ASU 2025-05 effective January 1, 2026. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
| 3. | PROPERTY AND EQUIPMENT, NET |
Property and equipment consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Compute equipment | $ | $ | ||||||
| Infrastructure equipment | ||||||||
| Leasehold improvements | ||||||||
| Transformers | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Depreciation expense was $
Asset acquisition
On May 15, 2025, the Company entered into a Purchase and Sale Agreement with Blue Ridge Digital Mining, LLC to acquire 60 Antbox containers for a total contractual consideration of $
This transaction has been accounted for as an asset acquisition under common control in accordance with ASC 805-50, as both the Company and the seller are ultimately controlled by VCV Digital Infrastructure Holdings LLC. The Antboxes were delivered and accepted during the second quarter of 2025 and have been capitalized under equipment within property and equipment.
Future minimum payments as of March 31, 2026 related to this asset acquisition are as follows:
| Future Minimum Payments | ||||
| 2026 | $ | |||
| 2027 | ||||
| Total future minimum payments | $ | |||
As of March 31, 2026, eight installment payments of $
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The total remaining consideration payable of $
| March 31, 2026 | ||||
| Current liabilities | $ | |||
| Non-current liabilities | ||||
| Total undiscounted cash flows | $ | |||
Asset held for sale
As of December 31, 2024, the Company had nine mining containers classified as held for sale. These containers were measured at the lower of their carrying amount or fair value less costs to sell, in accordance with ASC 360-10, Property, Plant and Equipment – Overall.
During the first quarter of 2025, the Company sold the remaining nine mining containers for total proceeds of $
| 4. | BUSINESS COMBINATION AND CONTROL OBTAINED BY A RELATED PARTY |
On March 16, 2026 (the “Closing Date”), BlockchAIn consummated the business combination (the “Business Combination”) pursuant to the BCA.
Upon closing of the Business Combination, Signing Day Sports and One Blockchain became wholly owned subsidiaries of the Company, and the Company’s common stock commenced trading on the NYSE American under the ticker symbol “AIB” on March 17, 2026.
Merger Consideration
As a result of the One Blockchain Merger, the membership interests of One Blockchain (“One Blockchain membership interests”) outstanding prior to the One Blockchain Merger were automatically cancelled, in exchange for the right of the holders thereof to receive the number of shares of common stock of the Company (“BlockchAIn common shares”) equal to (a) the product of (i) the number of fully-diluted shares of Signing Day Sports common stock outstanding immediately prior to the effective time of the Business Combination, not including certain out-of-the-money derivative securities (“SGN Outstanding Shares”), multiplied by (ii) 1/0.085, and multiplied by (iii) the Exchange Ratio, minus (b) the product of (i) the SGN Outstanding Shares multiplied by (ii) the Exchange Ratio (the “One Blockchain Merger Consideration”).
In connection with the Business Combination, Signing Day Sports stockholders received
Earnout Shares
The BCA provides for the issuance of earnout shares (the “Earnout Shares”) to the members, as of immediately prior to the Closing, of One Blockchain (collectively, the “One Blockchain Securityholders”), consisting of BlockchAIn common shares, if the 2026 EBITDA equals or exceeds $
F-14
Advisory Shares
BlockchAIn issued to Maxim Group LLC (“Maxim Group”), as the financial advisor to One Blockchain (as the agreed consideration for advisory services provided to One Blockchain) and the designee of Maxim Partners LLC (“Maxim Partners”), at the Closing
Consulting agreements
Included in the purchase consideration is $
Signing Day Sports advance of funds
As a closing condition of the Business Combination, Signing Day Sports agreed to send BlockchAIn $
Accounting treatment
The Business Combination was accounted for as a reverse merger in accordance with GAAP. Under this accounting treatment, One Blockchain was determined to be the accounting predecessor and accounting acquirer, and Signing Day Sports was treated as the acquired entity for accounting purposes.
The Company performed an assessment, as defined under ASC 805, Business Combinations, and concluded that the acquisition of Signing Day Sports is an acquisition of a business. The Company is still determining the purchase price allocation and as such is not presenting the excess of the consideration transferred over the net of the acquisition-date fair value of the identifiable assets acquired and the liabilities assumed as goodwill. Instead, this amount is included as intangible assets as of March 31, 2026. Since the allocation is still in progress, the intangible amount has not been amortized.
The preliminary purchase price allocation for Signing Day Sports is as follows:
| March 31, 2026 | ||||
| Number of shares outstanding owned by Signing Day Sports stockholders | ||||
| Multiplied by the price per share of Signing Day Sports common stock | $ | |||
| Preliminary purchase consideration based on Signing Day Sports shares outstanding | $ | |||
| Consulting agreements | ||||
| Less: Signing Day Sports advance of funds | ( | ) | ||
| Total preliminary purchase price | $ | |||
When accounting for a reverse merger, the consideration transferred is measured using the most reliably measured fair value. As a publicly traded company on the NYSE American, Signing Day Sports shares are more reliably measurable than BlockchAIn common shares or One Blockchain membership interests. On March 16, 2026, the date of the transaction, the sale price of the Signing Day Sports common stock on the NYSE American was $
F-15
The following table summarizes the total consideration exchanged for Signing Day Sports and the allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:
| Share purchase consideration | $ | |||
| Consulting agreements | ||||
| Signing Day Sports advance of funds | ( | ) | ||
| Fair value of total purchase consideration | $ | |||
| Assets | ||||
| Cash | $ | |||
| Accounts receivable | ||||
| Property and equipment | ||||
| Other Assets | ||||
| Liabilities | ||||
| Accounts payable | ( | ) | ||
| Deferred revenue | ( | ) | ||
| Total fair value of net liabilities assumed | $ | ( | ) | |
| Intangible assets | $ |
Preliminary fair value of the net liabilities assumed was determined in the three-month period ended March 31, 2026. Any measurement period adjustments will be recorded, if any, during future periods.
The following table presents the preliminary purchase price allocation for the acquisition. Any future measurement period adjustments will be based upon information obtained about facts and circumstances that existed at the acquisition date.
| Preliminary purchase price allocation | ||||
| Assets acquired | ||||
| Cash | $ | |||
| Accounts receivable | ||||
| Property and equipment | ||||
| Other Assets | ||||
| Liabilities assumed | ||||
| Accounts payable | ( | ) | ||
| Deferred revenue | ( | ) | ||
| Total fair value of net liabilities assumed | $ | ( | ) | |
| Fair value of total purchase consideration | ||||
| Add: Net liabilities assumed | ||||
| Intangible assets | $ | |||
The equity recapitalization resulting from the Business Combination is reflected as of the Closing Date, including the issuance of shares of the Company’s common stock in exchange for the outstanding equity interests of One Blockchain and Signing Day Sports. The results of operations of Signing Day Sports are included in the condensed consolidated financial statements of the Company from the Closing Date forward.
As of March 31, 2026 and December 31, 2025, there was goodwill of $
F-16
| 5. | REVENUE |
Deferred Revenue (Contract Liabilities)
Deferred revenue represents consideration received in advance of satisfying performance obligations. The Company recognizes such amounts as revenue when the related obligations are satisfied.
The following table summarizes the deferred revenue activity during the three months ended March 31, 2026 and year ended December 31, 2025:
| Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | |||||||
| Balance at the beginning of the year | $ | $ | ||||||
| Add: revenue deferred during the period | ||||||||
| Less: Revenue recognized during the period | ( | ) | ( | ) | ||||
| Balance at the end of the period | $ | $ | ||||||
| Current | $ | $ | ||||||
| Non-current | $ | $ | ||||||
As of March 31, 2026 and December 31, 2025, the Company expects to realize substantially all the deferred revenue within 12 months and accordingly, these amounts are classified as current liabilities. There were no significant changes to contract terms, refund policies, or performance obligations during the periods presented. The Company did not have contract assets as of March 31, 2026 and December 31, 2025.
| 6. | LEASES |
Ground Lease
The Company leases land under a ground lease agreement to support its data center facility. Lease payments are made in cash in accordance with the lease terms. The balance of the related ROU asset was $
The lease agreement includes extension options, which may extend the lease beyond the original period. The Company has not included the potential impact of any additional extension options in the calculation of the lease term or related lease liability as of March 31, 2026 and December 31, 2025.
Office Lease
In November 2022, Signing Day Sports signed a
As of March 31, 2026, the weighted-average remaining lease term for both operating leases was
During the three months ended March 31, 2026 the Company made cash payments towards both leases to reduce its operating lease liabilities of approximately $
F-17
Future minimum non-cancelable lease commitments under this lease are as follows:
| Future Minimum Payments | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | ||||
| Less: Present value discount | ( | ) | ||
| Total lease obligations | $ | |||
| 7. | 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, hypothetical transaction between market participants at the measurement date, or exit price. ASC 820, Fair Value Measurement, which establishes three levels of inputs that are used to measure fair value:
| ● | Level 1: quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2: observable inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the assets or liabilities. |
| ● | Level 3: unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities, including indicative pricing from third parties for similar instruments and asset-specific yield adjustments for elements such as credit risk. |
| 8. | INCOME TAXES |
Income tax expense during interim periods is based on applying an estimated annualized effective income tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. The computation of the annualized estimated effective tax rate for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating results for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred income tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known, or as the tax environment changes.
For the three months ended March 31, 2026, the Company did not recognize any income tax benefit due to a full valuation allowance on its deferred income tax assets. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three months ended March 31, 2026. The Company was a pass through entity for the three months ended March 31, 2025.
F-18
| 9. | EARNINGS PER SHARE |
Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, unless inclusion would be antidilutive.
In connection with the Business Combination completed on March 16, 2026, the Company issued shares of common stock in exchange for the outstanding equity interests of One Blockchain and Signing Day Sports. Earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Shares issued in connection with the business combination completed on March 16, 2026 are included in the weighted average shares outstanding retroactively for both periods presented.
For the three months ended March 31, 2026, diluted earnings per share equaled basic earnings per share, as the Company incurred a net loss and the inclusion of potentially dilutive securities would have been antidilutive.
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net (loss) income attributable to common stockholders | $ | ( | ) | $ | ||||
| Basic and diluted net (loss) income per share | $ | ( | ) | $ | ||||
| Weighted average shares outstanding – basic and diluted | ||||||||
| 10. | CAPITAL STRUCTURE / STOCKHOLDERS’ EQUITY |
As of the transaction date, the Company’s capital structure is as follows. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is
Common Stock
Voting-
Dividends- Subject to applicable law and the rights of any outstanding series of Preferred Stock, holders of Common Stock are entitled to receive such dividends and other distributions (payable in cash, property, or capital stock) as may be declared by the Board of Directors from time to time, sharing equally on a per-share basis. No dividends have been declared or paid by the Company for any period presented.
Liquidation- Subject to the rights of any outstanding series of Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Common Stock are entitled to receive all remaining assets available for distribution to stockholders, ratably in proportion to shares held.
Holders of Common Stock have no preemptive rights, cumulative voting rights, or rights of redemption. Shares of Common Stock are not subject to any sinking fund provisions. All issued and outstanding shares of Common Stock are fully paid and non-assessable.
As of March 31, 2026,
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Preferred Stock
The Board of Directors is authorized to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights (if any), designations, powers, preferences, and relative, participating, optional, special, and other rights of each such series and any qualifications, limitations, and restrictions thereof.
The Board’s authority with respect to each series of Preferred Stock includes, without limitation, the authority to determine: (i) the number of shares constituting that series and the distinctive designation of that series; (ii) the dividend rate, whether dividends shall be cumulative and, if cumulative, the date from which dividends shall accumulate; (iii) whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (iv) whether that series shall have conversion privileges and, if so, the terms and conditions of such conversion; (v) whether or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption; (vi) whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund; and (vii) the rights of the shares of that series in the event of the voluntary or involuntary liquidation, dissolution, or winding-up of the Company. Any series of Preferred Stock may be superior to, rank equally with, or be junior to any other series of Preferred Stock to the extent permitted by law.
| 11. | COMMITMENTS AND CONTINGENCIES |
Energy Contract
The Company has an energy services contract with a third party, which expires in October 2026. Under the terms of the agreement, the Company is committed to pay a minimum of $
Letter of Credit
During 2022, a related party of the Company entered into a stand-by letter of credit (“LOC”) arrangement with its financial institution on behalf of the Company to provide $
Other litigations
The Company is involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademarks and other intellectual property, licensing, taxation, and employee relations. The Company believes at present that the resolution of currently pending matters will not, individually or in aggregate, have a material adverse effect on its condensed consolidated financial statements. However, the Company’s assessment of any current litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are t in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
In the normal course of business, the Company may enter into certain guarantees or other agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past and does not currently anticipate incurring any material indemnification payments.
F-20
| 12. | RELATED PARTY TRANSACTIONS |
The Company reimburses one its related parties, Tiger Cloud LLC for management fees and administrative expenses incurred on behalf of the Company. Total fees under this arrangement were approximately $
As of March 31, 2026 and December 31, 2025, the Company had a loan receivable of $
As of March 31, 2026 and December 31, 2025, the Company had amounts due from related parties, net totaling $
| 13. | SUBSEQUENT EVENTS |
The Company has evaluated subsequent events and transactions that occurred up to the date the condensed consolidated financial statements were issued. Based upon this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.
F-21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of BlockchAIn Digital Infrastructure, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of BlockchAIn Digital Infrastructure, Inc. and Subsidiaries (the “Company”) as of December 31, 2025, and the related consolidated statement of operations, changes in stockholders’ equity, and cash flows for the year then ended, 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 the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Company as of and for the year ended December 31, 2024, were audited by other auditors whose report dated September 24, 2025, expressed an unqualified opinion on those statements.
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 financial statements based on our audit. 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 audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
F-22
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
We identified the Company’s annual true-up adjustment of utility costs from its third-party energy provider, which is billed after year-end and described in Note 2, as a critical audit matter. This determination was driven by the significant measurement uncertainty associated with estimating the utility true-up adjustment. Management exercised considerable judgment in determining the appropriate inputs and assumptions used in the calculation, which in turn resulted in a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating those significant inputs and assumptions. The primary procedures we performed to address this critical matter included:
| ● | Verifying the mathematical accuracy of the Company’s estimate calculation and the key inputs used to determine such estimate |
| ● | Assessing the reasonableness of assumptions and inputs used to determine such estimate |
We identified the transaction related to the Purchase and Sale Agreement with a related entity under common control to acquire Antbox containers, as described in Note 3 as a critical audit matter. The principal considerations for our determination was the significant and unusual nature of the transaction. Management involved a third-party valuation expert to assess the fair value of the acquired Antbox containers. All of this in turn led to a high degree of auditor judgment, subjectivity, and effort with respect to both the appropriate accounting treatment and the determination of the fair value of the acquired assets. The primary procedures we performed to address this critical matter included:
| ● | Obtaining the Purchase and Sale Agreement to understand the nature of the transaction and acquired assets |
| ● | Reviewing the third-party valuation of acquired assets and performing procedures under AS 2501 to assess appropriateness of valuation |
| /s/ Carr, Riggs
& Ingram, L.L.C. PCAOB ID 213 |
|
| We have served as the Company’s auditor since 2026. | |
| Palm Beach Gardens, FL | |
| March 31, 2026 | |
F-23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Members of BV Power Alpha, LLC
Opinion on the Financial Statements
We have audited the accompanying balance sheets of BV Power Alpha, LLC (the” Company”) as of December 31, 2024 (Successor) and 2023 (Predecessor), and the related statements of income, members equity and cash flows for the successor period from February 8, 2024 to December 31, 2024, the Predecessor period from January 1, 2024 to February 7, 2024 and the year ended December 31, 2023 (Predecessor), and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the periods from February 8, 2024 through December 31, 2024 (Successor), January 1, 2024 through February 7, 2024 (Predecessor), and the years ended December 31, 2023 (Predecessor), in conformity with accounting principles generally accepted in the United States of America.
Restatement of the Financial Statements
As discussed in Note 2 to the financial statements, the accompanying financial statements have been restated to correct for misstatements.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
F-24
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to those charged with governance and that:
(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
As described in Note 5, the Company underwent a change in control that resulted in pushdown accounting and required the Company to assess the fair value of the assets and liabilities of the Company and resulting goodwill on the date of the change in control transaction.
The primary procedures we performed to address this critical matter included:
| ● | Obtaining the accounting memorandum for such transaction and concluding on the accounting treatment and relevant assets and liabilities subject to fair value |
| ● | Verifying the reasonableness of the fair value of the Company on the date of the acquisition as well as the fair value of the assets and liabilities to determine goodwill recognized with the transaction |
| ● | Assessing the reasonableness of the valuation performed on the Company’s property and equipment, as well as the skills, knowledge and expertise the third-party valuation expert who prepared such valuation |
As described in Note 3, the Company has a complex estimate related to an annual true-up adjustment of utility costs from the Company’s third-party utility provider that is billed well after year-end.
The primary procedures we performed to address this critical matter included:
| ● | Verifying the mathematical accuracy of the Company’s estimate calculation and the key inputs used to determine such estimate |
| ● | Assessing the reasonableness of assumptions and inputs used to determine such estimate |
/s/ Berkowitz Pollack Brant Advisors + CPAs
PCAOB ID 52
We have served as the Company’s auditor since 2025.
West Palm Beach, FL
May 27, 2025 (September 23, 2025 as to the effects of the restatement discussed in Note 2)
F-25
BlockchAIn Digital Infrastructure, Inc.
Consolidated Balance Sheets
| Successor | Successor | |||||||
| December 31, | ||||||||
| 2025 | 2024 (Restated) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Accounts receivable - related party (Note 12) | ||||||||
| Loan receivable - related party (Note 12) | ||||||||
| Assets held for sale (Note 3) | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net (Note 3) | ||||||||
| Goodwill (Note 4) | ||||||||
| Operating lease right-of-use asset (Note 6) | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Contract liabilities (Note 5) | ||||||||
| Loans payable - related party (Note 12) | ||||||||
| Consideration payable, current portion (Note 3) | ||||||||
| Operating lease liability, current portion (Note 6) | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Consideration payable, net of current portion (Note 3) | ||||||||
| Operating lease liability, net of current portion (Note 6) | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 11) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Retained earnings | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements
F-26
BlockchAIn Digital Infrastructure, Inc.
Consolidated Statements of Operations
| Successor | Predecessor | |||||||||||
| Year ended December 31, 2025 | Period from February 8, 2024 to December 31, 2024 (Restated) | Period from January 1, 2024 to February 7, 2024 (Restated) | ||||||||||
| Revenues (Note 5) | $ | $ | $ | |||||||||
| Costs and operating expenses: | ||||||||||||
| Cost of revenues | | |||||||||||
| Depreciation and amortization (Note 3) | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||
| Total costs and operating expenses | ||||||||||||
| (Loss) income from operations | ( | ) | ||||||||||
| Other income (expense) | ||||||||||||
| Gain on disposal of assets held for sale (Note 3) | ||||||||||||
| Other (expense) income | ( | ) | ||||||||||
| Total other income | ||||||||||||
| Net (loss) income attributable to common stockholders | $ | ( | ) | $ | $ | |||||||
| Basic and diluted (loss) earnings per share | ||||||||||||
See accompanying notes to the consolidated financial statements.
F-27
BlockchAIn Digital Infrastructure, Inc.
Consolidated Statements of Changes in Stockholder’s Equity
| Predecessor | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Retained | |||||||||||||||||||||||||
| (Shares) | (Amount) | (Shares) | (Amount) | Capital | Earnings | Total | ||||||||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Contributions | - | - | ||||||||||||||||||||||||||
| Distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at February 7, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Successor | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Retained | Total Stockholders’ | ||||||||||||||||||||||||
| (Shares) | (Amount) | (Shares) | (Amount) | Capital | Earnings | Equity | ||||||||||||||||||||||
| Balance at February 8, 2024 | $ | $ | $ | |||||||||||||||||||||||||
| Net income | - | - | | |||||||||||||||||||||||||
| Contributions | - | - | ||||||||||||||||||||||||||
| Distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Impact of push down accounting | - | - | ||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Contributions | - | - | ||||||||||||||||||||||||||
| Distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||
See accompanying notes to the consolidated financial statements
F-28
BlockchAIn Digital Infrastructure, Inc.
Consolidated Statements of Cash Flows
| Successor | Predecessor | |||||||||||
| Year Ended December 31, 2025 | Period from February 8, 2024 to December 31, 2024 | Period from January 1, 2024 to February 7, 2024 | ||||||||||
| (Restated) | (Restated) | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | |||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Gain on disposal of assets held for sale (Note 3) | ( | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ( | ) | ||||||||
| Other current assets | ( | ) | ( | ) | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||||||
| Contract liabilities | ( | ) | ||||||||||
| Other current liabilities | | ( | ) | |||||||||
| Net cash provided by (used in) operating activities | | ( | ) | |||||||||
| Cash flows from investing activities: | ||||||||||||
| Proceeds from sale of assets held for sale (Note 3) | ||||||||||||
| Purchase of property, plant and equipment (Note 3) | ( | ) | ( | ) | ( | ) | ||||||
| Investment in loan receivable - related party (Note 12) | ( | ) | ( | ) | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ( | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from (repayment of) a related party loan | ( | ) | ||||||||||
| Contributions from members | ||||||||||||
| Distributions to members | ( | ) | ( | ) | ( | ) | ||||||
| Repayments of consideration payable | ( | ) | ||||||||||
| Net cash used in financing activities | ( | ) | ( | ) | ( | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||
| Cash and cash equivalents, end of period | $ | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Goodwill recognized due to change in control transaction | $ | $ | $ | |||||||||
| Property, plant, and equipment revaluation due to change in control transaction | $ | $ | $ | |||||||||
| Acquisition of property and equipment through consideration payable (Note 3) | $ | $ | $ | |||||||||
See accompanying notes to the consolidated financial statements.
F-29
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 1. | ORGANIZATION AND DESCRIPTION OF BUSINESS |
BlockchAIn Digital Infrastructure, Inc. (the ‘Company’ or ‘BlockchAIn’) is a Delaware corporation formed as a holding company. The Company operates through its wholly owned subsidiary, One Blockchain LLC (‘One Blockchain’ or ‘OBC’), which is engaged in data center operations and digital asset infrastructure services. One Blockchain primarily operates a high-performance computing facility in Spartanburg County, South Carolina, providing power infrastructure, hosting services, and equipment leasing to customers engaged in blockchain computing, artificial intelligence (“AI”), and high-performance data processing.
The Company’s core operations include hosting services, and leasing space, power capacity, and equipment within its data center facility to customers requiring computing power.
Effective May 19, 2025, the subsidiary legally changed its name from BV Power Alpha LLC to One Blockchain LLC. This change was made to reflect the Company’s evolving strategic focus and branding. The name change is administrative in nature and does not have a material impact on the Company’s financial position, results of operations, or cash flows.
On May 27, 2025, the Company entered into a Business Combination Agreement (“BCA”) with Signing Day Sports, Inc. (“SGN”), as amended on November 10, 2025, and as further amended on December 22, 2025. On July 11, 2025, the Company announced that One Blockchain had confidentially submitted a draft registration statement on Form S-4 (the “Registration Statement”) to the U.S. Securities and Exchange Commission (“SEC”).
Effective March 16, 2026 (“the transaction date”), the Company and SGN announced the successful completion of the business combination under the previously announced BCA. Under the BCA the Company is now the parent entity of both SGN and One Blockchain. The Company commenced trading on NYSE American on March 17, 2026, under the ticker symbol “AIB”. See Note 11 - Commitments and Contingencies.
On September 5, 2025, One Blockchain formed a wholly owned subsidiary, One Blockchain Nolan LLC, to support the expansion of its operations into the Texas market. The One Blockchain Nolan LLC subsidiary is now a sub-subsidiary (wholly owned by One Blockchain, which is wholly owned by BlockchAIn). The sub-subsidiary is expected to facilitate the development of new data center infrastructure.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the SEC.
Restatement of Audited Financial Information
During the prior year, the Company revised its financial statement presentation to reflect both predecessor and successor periods, providing a clearer view of financial performance following a significant structural change. This change was driven by the Company’s election to apply pushdown accounting in accordance with Accounting Standards Codification (“ASC”) 805-50-25-4 through 25-7, resulting in a new basis of accounting and the creation of a new reporting entity as of February 7, 2024. Accordingly, the predecessor period (January 1, 2024 - February 7, 2024) is presented under the historical cost basis and the successor period as of February 8, 2024 is presented under the fair value basis.
Additionally, the Company reassessed the presentation of certain customer-related credits and price concessions in accordance with ASC 606, Revenue from Contracts with Customers. Historically, these amounts were recorded separately as part of the provision for credit losses under the CECL model. Upon further evaluation, management determined that such concessions represent a form of variable consideration under ASC 606 and should be reflected as a reduction in revenue when the Company expects to accept less than the stated contract price.
As a result, the Consolidated Statements of Operations have been restated to present these amounts as a direct reduction of revenue, thereby more accurately reflecting the economic substance of the transactions. This change in presentation did not impact net income for any of the periods presented. Additionally, the Consolidated Statements of Cash Flows were updated to remove the provision for credit losses, with a corresponding offset reducing the change in accounts receivable. This change did not impact cash provided by operating activities. These changes were made to ensure the consolidated financial statements more accurately represent the Company’s financial position and results of operations.
F-30
For additional details regarding the acquisition and the fair value measurements, refer to “Note 4 - Business Combination and Control Obtained by a Related Party.”
All intercompany transactions with consolidated entities have been eliminated in consolidation.
Emerging Growth Company
The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933 (“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, the Company may take advantage of certain exemptions from various reporting requirements that are applicable to public companies not considered emerging growth companies. These exemptions include, but are not limited to, (i) not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, (ii) reduced disclosure requirements regarding executive compensation in its periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such option is irrevocable. The Company has decided against opting out of such an extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with those of another public company that is neither an emerging growth company, nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.
Significant items subject to such estimates include (i) useful lives assigned to property and equipment, (ii) the discount rate used for operating leases, (iii) estimates used to assess goodwill impairment, (iv) estimates of value of acquired intangible assets, (v) estimates of value to assess impairment of long-lived assets, (vi) the initial measurement of lease liabilities, and (vii) estimated energy costs used for the utility true-up adjustment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts its estimates when facts and circumstances dictate. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could materially differ from those estimates.
F-31
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in assessing performance and allocating resources. The Company, through its Chief Executive Officer in his role as chief operating decision-maker, views Company operations and manages the business as one operating segment.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606. The Company’s sole revenue stream is hosting services.
Hosting Services
The Company generates revenue through revenue from contracts with customers for hosting services, enabling customers to engage in blockchain computing, AI and high-performance data processing. Hosting services include providing its customers with secure rack space, power capacity, security, and equipment within its data center facility. The Company has a stand-ready obligation to provide continues access to power and cooling capacity. Under most of the Company’s contracts, this service is provided for an agreed upon period of time and for a set price. The Company recognizes the related revenue ratably over the contract period as it satisfies its performance obligations. This revenue does not include amounts collected on behalf of third parties, including sales and indirect taxes.
The Company has certain hosting service contracts for which revenue is recognized as services are performed on a variable basis. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, collection is probable, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s satisfaction of the performance obligation). The Company generally bills its customers monthly, in advance of services provided, based on the terms and consideration under the contract.
Additionally, the Company’s hosting service agreements may include provisions for variable consideration in the form of service level credits, performance bonuses, retroactive price adjustments (“true-ups”) or price concessions agreed upon with customers. These concessions may take the form of reductions in contractual amounts, curtailment credits, or other price adjustments. Adjustments are generally related to guaranteed uptime availability, power usage effectiveness targets, or curtailment events. The Company estimates the amount of variable consideration at the inception of the contract and updates the estimate at the end of each reporting period. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Credits due to customers for true-ups that will be applied against future invoices are recorded as a refund liability (included within other current liabilities) on the consolidated balance sheet.
The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days. Billings are typically collected within 30 days. The timing of revenue recognition, billings, and cash collections results in deferred revenue in the accompanying consolidated balance sheets. Certain customers are billed in advance and true-ups are billed in arrears of services provided, in accordance with the agreed-upon contractual terms. The Company requires a security deposit that is subject to increases based upon the customer’s energy usage.
F-32
Contract Balances and Accounts Receivable
The timing of revenue recognition, invoicing and cash collections results in accounts receivables, contract assets and contract liabilities (deferred revenue) on the consolidated balance sheets.
The Company estimates an allowance for credit losses based on a lifetime loss methodology in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”). This allowance reflects the Company’s estimate of the net amount expected to be collected from its customers. The Company analyzes current economic conditions, customer creditworthiness, historical loss rates, and specific customer concentrations. A specific reserve is established for individual accounts where collection is deemed doubtful due to the customer’s financial condition or insolvency. Account balances are written off against the allowance after all means of collection have been exhausted and management determines the potential for recovery is remote. To mitigate credit risk, the Company generally requires security deposits for power consumption and, in certain cases, retains a security interest in the customer’s computer equipment located within the Company’s data center facilities until payment obligations are met. As of December 31, 2025 (Successor) and 2024 (Successor), there was no allowance for credit losses.
Distinct from the allowance for expected credit losses, the Company records a provision for estimated service level agreement credits, billing disputes, and price concessions. These provisions are based on an analysis of historical credit issuance and known service events. These amounts are recorded as a reduction of revenue and a corresponding reduction of accounts receivable (or as a refund liability), rather than as bad debt expense.
Deferred revenue represents the Company’s obligation to transfer services to a customer for which it has received consideration from the customer. This primarily consists of prepaid hosting fees. Revenue is recognized as the related performance obligations are satisfied over the contract term. Deferred revenue is included in other current liabilities in the consolidated balance sheets.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash, accounts receivable, and loan receivable – related party. The carrying value of all these financial instruments approximates fair value. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk on its cash.
The Company’s accounts receivable are derived from revenue earned from customers located in the United States. Approximately
F-33
Approximately
As of December 31, 2025 (Successor) and 2024 (Successor), the Company had a loan receivable of $
The Company has no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.
Cost of Revenues
The Company includes energy costs in cost of revenues. Included in the energy costs is an accrual updated quarterly which estimates the annual true up credit or charge anticipated to be received in July of the following year. The true-up estimated cost accrual for the year ended December 31, 2025 (Successor) was $
Utility True-Up Adjustment
The Company procures electricity through a local utility provider and is subject to an annual true-up process that reconciles estimated energy costs with actual consumption and final rates. Management must estimate the true-up accrual at each reporting period, which directly impacts cost of revenues. This estimate involves significant judgment, particularly in forecasting usage patterns, rate changes, and timing of adjustments.
Cash
Cash consists of cash on hand and demand deposits maintained with high-credit-quality financial institutions. The Company does not currently hold money market funds, commercial paper, or other cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company monitors the financial health of these institutions and believes it is not exposed to significant credit risk.
Accounts Receivables
Accounts receivable are recorded at the invoiced amount and do not bear interest. A receivable is recognized in the period when the Company has transferred services to its customers and its right to consideration is unconditional. Payment terms and conditions vary by contract type but generally require payment within 30 days of the invoice date.
Property and Equipment
Property and equipment are stated at original cost or initial fair value for property and equipment acquired through business combinations or asset acquisition, net of depreciation. Depreciation for computer equipment, infrastructure equipment, transformers, and leasehold improvements commences once they are ready for their intended use. Major improvements that enhance the functionality or extend the asset’s useful life are capitalized, while routine maintenance and repairs are expensed as incurred. Leasehold improvements and integral equipment at leased locations are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement. Upon disposal or retirement, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the consolidated statement of operations.
F-34
During the year ended December 31, 2025 (Successor), the Company acquired Antbox containers for total consideration of $
Depreciation is calculated on a straight-line basis over the estimated useful lives of asset as follows:
| Property and equipment | Useful life (years) | |
| Compute equipment | ||
| Infrastructure equipment | ||
| Transformers | ||
| Leasehold improvements | Shorter of lease term or useful life |
The Company reviews its property and equipment for impairment, together with lease right-of-use assets, at the asset group level; the lowest level at which the asset group generates identifiable cash flows. We reassess whether a change to an asset group is necessary when we experience a significant change in our operations or in the way we utilize long-lived assets that causes a change to the interdependency of cash flows. We review an asset group for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, such as a significant decrease in market price of an asset, a significant adverse change in the extent or manner in which an asset or an asset group is being used or its physical condition, a significant adverse change in legal factors or business climate that could affect the value of an asset or an asset group, or a continuous deterioration of our financial condition. Recoverability of asset groups to be held and used is assessed by comparing the carrying amount of an asset group to estimated undiscounted future net cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which its carrying amount exceeds its fair value. No impairment charges were recorded during the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor).
Assets Held for Sale
Assets and liabilities to be disposed of that meet all of the criteria to be classified as held for sale are reported at the lower of their carrying amounts or fair values less costs to sell. The Company classifies long-lived assets as held for sale when management has approved and committed to a formal plan to sell the asset, the asset is available for immediate sale in its present condition, an active program to locate a buyer has been initiated, the sale is probable and expected to be completed within one year, the asset is being actively marketed at a price that is reasonable in relation to its fair value, and it is unlikely that significant changes to the plan will be made or withdrawn. Upon classification as held for sale, the asset is measured at the lower of its carrying amount or fair value less costs to sell, and depreciation ceases. If the carrying amount exceeds fair value less costs to sell, an impairment loss is recognized in the period the held for sale criteria are met, while gains on sale are recognized only upon completion of the transaction. The Company assesses the fair value of assets held for sale at each reporting period until the asset is sold or reclassified as an operating asset if it no longer meets the held-for-sale criteria.
The Company had nine mining containers classified as held for sale as of December 31, 2024 (Successor). These containers were sold during the year ended December 31, 2025 (Successor), and there were no assets held for sale as of December 31, 2025 (Successor). The containers were not deemed impaired while held for sale, and no impairment charges were recorded during the Predecessor or Successor periods in 2024.
F-35
Goodwill
Goodwill represents the excess purchase consideration of an acquired business over the fair value of its net tangible and identifiable intangible assets. Goodwill is not amortized and is tested for impairment at least annually or more often if and when circumstances indicate that goodwill is not recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate, or a significant decrease in expected cash flows. No impairment charges were recorded with respect to goodwill for the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor).
Leases
The Company enters into lease arrangements primarily for land, data center spaces, and equipment. In accordance with ASC 842, Leases, the Company assesses whether an arrangement contains a lease at contract inception. When an arrangement contains a lease, the Company categorizes leases with contractual terms longer than twelve months as either operating or finance.
The Company records right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheet for all leases with a term for longer than 12 months, including renewal options that the Company is reasonably certain to exercise. ROU assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the lease commencement date. When there is a lease modification or a change in lease term triggered by a reassessment event, we reassess its classification and remeasure the ROU asset and lease liability.
Lease liabilities are initially measured based on the present value of fixed lease payments over the term of the lease. As the rate implicit in the Company’s lease is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.
The majority of our lease arrangements include options to extend the lease. If we are reasonably certain to exercise such options, the periods covered by the options are included in the lease term. The depreciable lives of leasehold improvements are limited by the expected lease term and the Company performs an assessment annually to determine if renewal options in leases are certain to be exercised. For leases with a term of 12 months or less, the Company has elected not to recognize any ROU asset or lease liability on the consolidated balance sheet. Where there are lease agreements with lease and non-lease components, the Company has elected to account for the lease and non-lease components as a single lease component for all classes of underlying assets that are identified as lease arrangements.
As described above, we perform a review at least annually of all long-lived assets, including ROU assets, at the asset group level for impairment by assessing events or changes in circumstances that indicate the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is assessed by comparing the carrying amount of an asset group to estimated undiscounted future net cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which its carrying amount exceeds its fair value. No impairment charges were recorded during the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor). See Note 6 – Leases for additional information.
F-36
Fair Value of Financial Instruments
The carrying values of cash represents fair value. The carrying values of accounts receivable, accrued revenues, accounts payable, and accrued expenses approximate their fair values primarily due to the short-term maturity of the related instruments. The fair value of loan receivable is estimated by discounting the contractual cash flows, using indicative pricing from third parties for similar instruments and asset-specific yield adjustments for elements such as credit risk.
Stockholders’ Equity (As of the transaction date)
As of March 16, 2026, the Company is authorized to issue 1,100,000,000 shares consisting of: (i) 1,000,000,000 shares of common stock, par value $0.0001 per share; and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share. As of December 31, 2025 and 2024, no shares of common stock were issued and outstanding, and no shares of preferred stock were issued and outstanding.
Earnings Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by adjusting the weighted-average number of shares outstanding for the dilutive effect of potential common shares, such as stock options and warrants, using the treasury stock method. In periods of net loss, diluted loss per share equals basic loss per share, as the inclusion of potential common shares would be anti-dilutive.
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when it is more likely than not that some or all of the deferred tax assets will not be realized.
No interest or penalties were recognized for the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor).
Recent Accounting Pronouncements
Accounting Standards Not Yet Adopted
Accounting Standards Update (“ASU”) No. 2024-03, Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. Under the standard, the accounting guidance improves the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Management is still evaluating the impact on the Company’s consolidated financial statements.
Accounting Standards Recently Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), that addresses requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application and early adoption is permitted. The Company adopted ASU 2023-09 on January 1, 2025, which did not have a material impact on its consolidated financial statements and related disclosures.
The Company was not subject to, nor did it adopt, any new accounting pronouncements during the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor), that had a material impact on its financial condition, results of operations, or cash flows.
F-37
| 3. | PROPERTY AND EQUIPMENT, NET |
Property and equipment consisted of the following:
| Successor | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Compute equipment | ||||||||
| Infrastructure Equipment | ||||||||
| Leasehold improvements | ||||||||
| Transformers | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | ||||||||
Depreciation expense was $
Asset acquisition
On May 15, 2025, the Company entered into a Purchase and Sale Agreement with Blue Ridge Digital Mining, LLC to acquire 60 Antbox containers for a total contractual consideration of $
This transaction has been accounted for as an asset acquisition under common control in accordance with ASC 805-50, as both the Company and the seller are ultimately controlled by VCV Digital Infrastructure Holdings LLC. The Antboxes were delivered and accepted during the second quarter of 2025 and have been capitalized under equipment within property and equipment.
Future minimum payments as of December 31, 2025 (Successor) related to this asset acquisition are as follows:
| Future Minimum Payments | |||
| 2026 | $ | ||
| 2027 | |||
| Total future minimum payments | $ | ||
As of December 31, 2025 (Successor), five installment payments of $
F-38
The total remaining consideration payable of $
| December 31, 2025 | ||||
| Current liabilities | $ | |||
| Non-current liabilities | ||||
| Total undiscounted cash flows | $ | |||
Asset held for sale
As of December 31, 2024 (Successor), the Company had nine mining containers classified as held for sale. These containers were measured at the lower of their carrying amount or fair value less costs to sell, in accordance with ASC 360-10, Property, Plant and Equipment – Overall.
During the first quarter of 2025, the Company sold the remaining nine mining containers for total proceeds of $
During the period from February 8, 2024 to December 31, 2024 (Successor), the Company sold 14 mining containers, generating total proceeds of $
| 4. | BUSINESS COMBINATION AND CONTROL OBTAINED BY A RELATED PARTY |
Per an agreement dated February 7, 2024, One Blockchain underwent a change in control following a step acquisition by VCV Digital Solutions LLC (“VCV Digital Solutions”), which was effective as of February 8, 2024. VCV Digital Solutions acquired
Although the transaction involved entities in which VCV Digital Solutions previously held significant influence, the Company evaluated the nature of the transaction and determined that it does not meet the criteria for a common control transaction under ASC 805. Prior to the acquisition, the seller was not under common control with VCV Digital Solutions and therefore was not considered a related party under ASC 850, Related Party Disclosures. The acquisition of the remaining
The Company elected to apply pushdown accounting in accordance with ASC 805, resulting in a new basis of accounting and the creation of a new reporting entity as of February 8, 2024. The Company has revised its financial statement presentation to separately reflect the predecessor and successor periods in accordance with ASC 805. The period from January 1, 2024 to February 7, 2024 (Predecessor) is presented under the historical cost basis, and the period from February 8, 2024 to December 31, 2024 (Successor) is presented under the new fair value basis resulting from the application of pushdown accounting.
F-39
The total purchase consideration for the additional
| ● | Property and equipment, net: increased by $ |
| ● | Goodwill: Recognized at $ |
The impact of these adjustments is reflected in the accompanying consolidated balance sheets as of December 31, 2024 (Successor).
| 5. | REVENUE |
Deferred Revenue (Contract Liabilities)
Deferred revenue consists of consideration received in advance of performance and recognizes them as revenue when the performance obligation is satisfied.
The following table summarizes the deferred revenue activity during the years ended December 31, 2025 (Successor) and 2024 (Successor):
| Successor | ||||||||
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | |||||||
| Balance at the beginning of the year | $ | $ | ||||||
| Add: revenue deferred during the year | ||||||||
| Less: Revenue recognized during the year | ( | ) | ( | ) | ||||
| Balance at the end of the year | $ | $ | ||||||
| Current | $ | $ | ||||||
| Non-current | $ | $ | ||||||
As of December 31, 2025 (Successor), the Company expects to realize substantially all the deferred revenue within 12 months and accordingly, these amounts are classified as current liabilities. There were no significant changes to contract terms, refund policies, or performance obligations during the periods presented. The Company did not have contract assets as of December 31, 2025 (Successor) and 2024 (Successor).
| 6. | LEASES |
The Company leases land under a ground lease agreement to support its data center facility. Lease payments are made in cash in accordance with the lease terms. The balance of the related ROU asset was $
As of December 31, 2025 (Successor) and December 31, 2024 (Successor), the weighted-average remaining lease term for operating leases was
The lease agreement includes extension options, which may extend the lease beyond the original period. The Company has not included the potential impact of any additional extension options in the calculation of the lease term or related lease liability.
F-40
During the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor), the Company made cash payments to reduce its operating lease liability of approximately $
Future minimum non-cancelable lease commitments under this lease are as follows:
| Future Minimum Payments | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | ||||
| Less: Present value discount | ( | ) | ||
| Total lease obligations | $ | |||
| 7. | 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, hypothetical transaction between market participants at the measurement date, or exit price. ASC 820, Fair Value Measurement, which establishes three levels of inputs that are used to measure fair value:
| ● | Level 1: quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2: observable inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the assets or liabilities. |
| ● | Level 3: unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities, including indicative pricing from third parties for similar instruments and asset-specific yield adjustments for elements such as credit risk. |
Assets and liabilities not measured and recorded at fair value
The Company’s consolidated financial instruments are not measured at fair value on a recurring basis, as the carrying values of the instruments approximate their fair values due to their liquid or short-term natures.
| 8. | INCOME TAXES |
One Blockchain is a limited liability company and therefore substantially all of the Company’s income/loss in 2025 and 2024 was subject to pass-through taxes and not subject to income taxes. The members of One Blockchain include the Company’s taxable income or loss in their personal income tax returns. Accordingly, there is no income tax expense and/or deferred tax assets/liabilities recorded as of December 31, 2025 and 2024. Transactions for which tax deductibility or the timing of deductibility is uncertain are reviewed based on their technical merits in determining distribution of the Company’s income. Penalties and interest assessed by income taxing authorities are included in selling, general, and administrative expenses. No interest or penalties were recognized for the year ended December 31, 2025 (Successor), the period from February 8, 2024 to December 31, 2024 (Successor), and the period from January 1, 2024 to February 7, 2024 (Predecessor).
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| 9. | EARNINGS PER SHARE |
The Company had no shares issued or outstanding as of December 31, 2025 and 2024 and therefore basic or diluted earnings per share have been calculated.
| 10. | CAPITAL STRUCTURE / STOCKHOLDERS’ EQUITY |
As of the transaction date the Company’s capital structure will be as follows. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is
Common Stock
Voting- Each share of Common Stock is entitled to one vote on each matter properly submitted to the stockholders on which holders of Common Stock are entitled to vote. Subject to the rights of any series of Preferred Stock, holders of Common Stock exclusively possess all voting power of the Company.
Dividends- Subject to applicable law and the rights of any outstanding series of Preferred Stock, holders of Common Stock are entitled to receive such dividends and other distributions (payable in cash, property, or capital stock) as may be declared by the Board of Directors from time to time, sharing equally on a per-share basis. No dividends have been declared or paid by the Company for any period presented.
Liquidation- Subject to the rights of any outstanding series of Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Common Stock are entitled to receive all remaining assets available for distribution to stockholders, ratably in proportion to shares held.
Holders of Common Stock have no preemptive rights, cumulative voting rights, or rights of redemption. Shares of Common Stock are not subject to any sinking fund provisions. All issued and outstanding shares of Common Stock are fully paid and non-assessable.
Preferred Stock
The Board of Directors is authorized to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights (if any), designations, powers, preferences, and relative, participating, optional, special, and other rights of each such series and any qualifications, limitations, and restrictions thereof.
The Board’s authority with respect to each series of Preferred Stock includes, without limitation, the authority to determine: (i) the number of shares constituting that series and the distinctive designation of that series; (ii) the dividend rate, whether dividends shall be cumulative and, if cumulative, the date from which dividends shall accumulate; (iii) whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (iv) whether that series shall have conversion privileges and, if so, the terms and conditions of such conversion; (v) whether or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption; (vi) whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund; and (vii) the rights of the shares of that series in the event of the voluntary or involuntary liquidation, dissolution, or winding-up of the Company. Any series of Preferred Stock may be superior to, rank equally with, or be junior to any other series of Preferred Stock to the extent permitted by law.
As of December 31, 2025 and December 31, 2024, no shares of common stock or preferred stock have been issued or were outstanding.
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| 11. | COMMITMENTS AND CONTINGENCIES |
Business Combination with Signing Day Sports, Inc.
On May 27, 2025, the Company entered into a Business Combination Agreement (“BCA”) with Signing Day Sports, Inc. (“SGN”), as amended on November 10, 2025, and as further amended on December 22, 2025. Effective March 16, 2026, the Company and SGN announced the successful completion of the business combination under the previously announced BCA. Under the BCA the Company is now the parent entity of both SGN and One Blockchain. The Company commenced trading on NYSE American on March 17, 2026, under the ticker symbol “AIB”.
Management has evaluated the BCA and amendments and determined that no adjustments to the financial statements are required as of the reporting date. The financial impact of the transaction will be reflected in future periods.
Energy Contract
The Company has an energy services contract with a third party, which expires in October 2026. Under the terms of the agreement, the Company is committed to pay a minimum of $
Letter of Credit
During 2022, a related party of the Company entered into a stand-by letter of credit (“LOC”) arrangement with its financial institution on behalf of the Company to provide $
Other litigations
The Company is involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademarks and other intellectual property, licensing, taxation, and employee relations. The Company believes at present that the resolution of currently pending matters will not, individually or in aggregate, have a material adverse effect on its consolidated financial statements. However, the Company’s assessment of any current litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
In the normal course of business, the Company may enter into certain guarantees or other agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past and does not currently anticipate incurring any material indemnification payments.
Consultant Agreement
The Company had a
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| 12. | RELATED PARTY TRANSACTIONS |
The Company reimbursed one of its members $
As of December 31, 2025 (Successor), amounts were due to the related party. As of December 31, 2024 (Successor), $
As of December 31, 2025 (Successor) and 2024 (Successor), the Company had a loan receivable of $
As of December 31, 2024 (Successor), the Company had a related party loan payable with a balance of $
As of December 31, 2025 (Successor), the Company had accounts receivable from related parties totaling $
| 13. | SUBSEQUENT EVENTS |
The Company has evaluated subsequent events and transactions that occurred up to the date the financial statements were issued. Based upon this review, except for as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
Business Combination with Signing Day Sports, Inc.
Effective March 16, 2026, the Company and SGN announced the successful completion of the business combination under the previously announced BCA. Under the BCA the Company is now the parent entity of both SGN and One Blockchain. The Company commenced trading on NYSE American on March 17, 2026, under the ticker symbol “AIB”. See Note 11 - Commitments and Contingencies.
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Up to 16,620,498 Shares of Common Stock
Pre-funded Warrants to purchase up to 16,620,498 Shares of Common Stock
Up to 16,620,498 Shares of Common Stock Underlying such Pre-funded Warrants
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
PRELIMINARY PROSPECTUS
Lucid Capital Markets
, 2026
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with this registration statement.
| $ | ||||
| Securities and Exchange Commission registration fee | $ | 9,948 | ||
| FINRA Filing Fee | 11,305 | |||
| Accountant’s fee and expenses | 75,000 | |||
| Legal fees and expenses | 200,000 | |||
| Transfer agent’s fees and expenses | 2,500 | |||
| Printing and related fees | 4,500 | |||
| Miscellaneous | 5,000 | |||
| Total expenses | $ | 308,253 | ||
Item 14. Indemnification of Directors and Officers.
Section 145(a) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or other adjudicating court shall deem proper.
Section 145(g) of the DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify the person against such liability under Section 145 of the DGCL.
The Company’s charter contains provisions limiting the liability of the members of the Company’s board of directors, and the Company’s bylaws provide that the Company will indemnify each of the members of the Company’s board of directors and officers to the fullest extent permitted under Delaware law. The Company’s bylaws will also provide the board of directors with discretion to indemnify employees and agents of the Company.
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Item 15. Recent Sales of Unregistered Securities.
None.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
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II-3
| # | Indicates a management or compensatory plan. |
| † | Certain schedules and similar attachments to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request. |
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Item 17. Undertakings.
The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. | |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |
| (4) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. | |
| (5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York State of New York on June 2, 2026.
| BlockchAIn Digital Infrastructure, Inc. | |||
| By: | /s/ Jerry Tang | ||
| Name: | Jerry Tang | ||
| Title: | Chief Executive Officer | ||
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints Jerry Tang and Jolienne Halisky as the individual’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the person and in his or her name, place and stead, in any and all capacities, to sign this registration statement and any or all amendments, including post-effective amendments to the Registration Statement, including a prospectus or an amended prospectus therein and any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462 under the Securities Act, and all other documents in connection therewith to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement and power of attorney have been signed by the following persons in the capacities and on June 2, 2026.
| Signature | Title | Date | ||
| /s/ Jerry Tang | Chief Executive Officer | June 2, 2026 | ||
| Jerry Tang | (Principal Executive Officer) | |||
| /s/ Jolienne Halisky | Chief Financial Officer | June 2, 2026 | ||
| Jolienne Halisky | (Principal Financial and Accounting Officer) | |||
| /s/ George Chuang | Director | June 2, 2026 | ||
| George Chuang | ||||
| /s/ Mohammad Hasham | Director | June 2, 2026 | ||
| Mohammad Hasham | ||||
| /s/ Daniel Nelson | Director | June 2, 2026 | ||
| Daniel Nelson | ||||
| /s/ Hongfei Zhang | Director | June 2, 2026 | ||
| Hongfei Zhang |
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Exhibit 1.1
[____________] SHARES of Common Stock and
[_____________] Warrants of
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
UNDERWRITING AGREEMENT
[______], 2026
Lucid Capital Markets, LLC
As the Representative of the
Several underwriters, if any, named in Schedule I hereto
c/o Lucid Capital Markets, LLC
570 Lexington Avenue, 40th Floor
New York, New York 10022
Ladies and Gentlemen:
The undersigned, BlockchAIn Digital Infrastructure, Inc., a company incorporated under the laws of Delaware (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries or affiliates of BlockchAIn Digital Infrastructure, Inc., the “Company”), hereby confirms its agreement (this “Agreement”) with the several underwriters (such underwriters, including the Representative (as defined below), the “Underwriters” and each an “Underwriter”) named in Schedule I hereto for which Lucid Capital Markets, LLC is acting as representative to the several Underwriters (the “Representative” and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.
It is understood that the several Underwriters are to make a public offering of the Public Securities as soon as the Representative deems it advisable to do so. The Public Securities are to be initially offered to the public at the public offering price set forth in the Prospectus.
It is further understood that you will act as the Representative for the Underwriters in the offering and sale of the Closing Securities and, if any, the Option Shares in accordance with this Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Action” shall have the meaning ascribed to such term in Section 3.1(k).
“Affiliate” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Closing” means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.
“Closing Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’ obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Securities, in each case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the first (1st) Trading Day following the date hereof (or the second (2nd) Trading Day following the date hereof if this Agreement is signed on a day that is not a Trading Day or after 4:00 p.m. (New York City time) and before midnight (New York City time) on a Trading Day) or at such earlier time as shall be agreed upon by the Representative and the Company.
“Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.
“Closing Securities” shall have the meaning ascribed to such term in Section 2.1(a)(ii).
“Closing Shares” shall have the meaning ascribed to such term in Section 2.1(a)(i).
“Closing Warrants” shall have the meaning ascribed to such term in Section 2.1(a)(ii).
“Commission” means the United States Securities and Exchange Commission.
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“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Auditor” means Carr, Riggs & Ingram, L.L.C., with offices located at 48 S Service Rd., Ste 301, Melville, NY 11747.
“Company Counsel” means Loeb & Loeb LLP, with offices located at 345 Park Avenue, New York, NY 10154.
“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution Date” shall mean the date on which the parties execute and enter into this Agreement.
“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) warrants and shares issuable upon exercise of such warrants issued to the Representative, (c) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, and (d) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith within ninety (90) days following the Closing Date, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
3
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“FINRA” means the Financial Industry Regulatory Authority.
“GAAP” shall have the meaning ascribed to such term in Section 3.1(i).
“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreements” means the lock-up agreements that are delivered on the date hereof by each of the Company’s officers and directors and each holder of Common Stock and Common Stock Equivalents holding, on a fully diluted basis, more than 5% of the Company’s issued and outstanding Common Stock, in the form of Exhibit A attached hereto.
“Material Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
“Offering” shall have the meaning ascribed to such term in Section 2.1(c).
“Option” shall have the meaning ascribed to such term in Section 2.2.
“Option Closing Date” shall have the meaning ascribed to such term in Section 2.2(c).
“Option Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.
“Option Shares” shall have the meaning ascribed to such term in Section 2.2(a)(i).
4
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preliminary Prospectus” means any preliminary prospectus relating to the Securities included in the Registration Statement or filed with the Commission pursuant to Rule 424(b).
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the final prospectus filed for the Registration Statement.
“Public Securities” means, collectively, the Closing Securities and, if any, the Option Shares.
“Registration Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form S-1 (File No. 333-[______]) with respect to the Securities, each as amended as of the date hereof, including the Preliminary Prospectus and Prospectus, and all exhibits filed with or incorporated by reference into such registration statement, and includes any Rule 462(b) Registration Statement.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration Statement” means any registration statement prepared by the Company registering additional Public Securities, which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(i).
“Securities” means the Closing Securities, the Option Shares and the Warrant Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
5
“Shares” means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 2.1(a)(i) and Section 2.2(a).
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Warrants, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means Securities Transfer Corporation, the current transfer agent of the Company, with offices located at 2901 Dallas Pkwy Suite 380, Plano, TX 75093 , and any successor transfer agent of the Company.
“Warrant Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants” means, collectively, the pre-funded Common Stock purchase warrants delivered to the Underwriters in accordance with Section 2.1(a)(ii), which Warrants shall be exercisable immediately until exercised in full, in the form of Exhibit B attached hereto.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate [________] shares of Common Stock and Warrants exercisable for an aggregate of [_____] shares of Common Stock, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the following securities of the Company:
(i) the number of shares of Common Stock (the “Closing Shares”) set forth opposite the name of such Underwriter on Schedule I hereof; and
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(ii) Warrants to purchase up to the number of shares of Common Stock set forth opposite the name of such Underwriter on Schedule I hereof (the “Closing Warrants” and, collectively with the Closing Shares, the “Closing Securities”), which Warrants shall have an exercise price of $0.0001, subject to adjustment as provided therein.
(b) The aggregate purchase price for the Closing Securities shall equal the amount set forth opposite the name of such Underwriter on Schedule I hereto (the “Closing Purchase Price”). The purchase price for one Share shall be $[___] (the “Share Purchase Price”) and the purchase price for each Warrant Share underlying the Warrants shall be the Share Purchase Price less $0.0001 per Warrant Share (the “Warrant Purchase Price”); and
(c) On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available funds equal to such Underwriter’s Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter its respective Closing Securities and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of EGS or such other location as the Company and Representative shall mutually agree. The Public Securities are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (the “Offering”).
(d) The Company acknowledges and agrees that, with respect to any Notice(s) of Exercise (as defined in the Warrants) delivered by a Holder (as defined in the Warrants) on or prior to 12:00 p.m. (New York City time) on the Closing Date, which Notice(s) of Exercise may be delivered at any time after the time of execution of this Agreement, the Company shall deliver the Warrant Shares subject to such notice(s) to the Holder by 4:00 p.m. (New York City time) on the Closing Date and the Closing Date shall be the Warrant Share Delivery Date (as defined in the Warrants). The Company acknowledges and agrees that the Holders are third-party beneficiaries of this covenant of the Company.
2.2 Option to Purchase Additional Shares.
(a) For the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Securities, the Representative is hereby granted an option (the “Option”) to purchase, in the aggregate, up to [_____] shares of Common Stock (the “Option Shares”)1 at the Share Purchase Price.
(b) In connection with an exercise of the Option, the purchase price to be paid for the Option Shares is equal to the product of the Share Purchase Price multiplied by the number of Option Shares to be purchased (the aggregate purchase price to be paid on an Option Closing Date, the “Option Closing Purchase Price”).
| 1 | 15% of the Closing Shares and the Closing Warrants. |
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(c) The Option granted pursuant to this Section 2.2 may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within 45 days after the Execution Date. An Underwriter will not be under any obligation to purchase any Option Shares prior to the exercise of the Option by the Representative. The Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or electronic transmission setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (each, an “Option Closing Date”), which will not be later than one (1) full Business Day after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of EGS or at such other place (including remotely by other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise of the Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares specified in such notice. The Representative may cancel the Option at any time prior to the expiration of the Option by written notice to the Company.
2.3 Deliveries. The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:
(i) At the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(ii) At the Closing Date, the Closing Warrants in certificated form registered in the name or names and in such authorized denominations as the applicable Underwriter may request in writing at least one (1) Business Day prior to the Closing Date;
(iii) At the Closing Date, and each Option Closing Date, if any, to the Representative only, a warrant to purchase up to a number of shares of Common Stock equal to 4% of the Closing Shares, Closing Warrants and Option Shares issued on such Closing Date and Option Closing Date, as applicable, for the account of the Representative (or its designees), which warrant shall have an exercise price of $[____], subject to adjustment therein, and registered in the name of the Representative, in form and substance reasonably acceptable to the Representative;
(iv) At the Closing Date, a legal opinion of Company Counsel addressed to the Underwriters, including, without limitation, a negative assurance letter, in the form and substance reasonably satisfactory to the Representative and as to each Option Closing Date, if any, a bring-down opinion from Company Counsel in form and substance reasonably satisfactory to the Representative, including, without limitation, a negative assurance letter, addressed to the Underwriters and in form and substance satisfactory to the Representative;
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(v) Contemporaneously herewith, a cold comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing Date and each Option Closing Date, if any;
(vi) On the Closing Date and on each Option Closing Date, the duly executed and delivered Officers’ Certificate, substantially in form and substance satisfactory to the Representative;
(vii) On the Closing Date and on each Option Closing Date, the duly executed and delivered Secretary’s Certificate, substantially in form and substance satisfactory to the Representative; and
(viii) Contemporaneously herewith, the duly executed and delivered Lock-Up Agreements.
2.4 Closing Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing Date are subject to the following conditions being met:
(i) the accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained herein (unless as of a specific date therein);
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) the Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;
(v) by the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement;
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(vi) the Closing Shares, the Option Shares and the Warrant Shares have been approved for listing on the Trading Market; and
(vii) prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Affiliate of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement and Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and neither the Registration Statement nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:
(a) Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in the Registration Statement. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
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(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents to which the Company is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
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(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Prospectus, (ii) the approval of the supplemental listing application (“SLAP”) by the Trading Market, and (iii) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Registration Statement. The Company has filed with the Commission the Registration Statement, including any related Prospectus or Prospectuses, for the registration of the Securities under the Securities Act, which Registration Statement has been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act. The Registration Statement has been declared effective by the Commission on June [____], 2026. The Company has advised the Representative of all further information (financial and other) with respect to the Company required to be set forth therein in the Registration Statement and Prospectus. Any reference in this Agreement to the Registration Statement, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Preliminary Prospectus or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Preliminary Prospectus or the Prospectus, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Preliminary Prospectus or the Prospectus has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act. The Company will not, without the prior consent of the Representative, prepare, use or refer to, any free writing prospectus.
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(g) Issuance of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The holder of the Securities will not be subject to personal liability by reason of being such holders. The Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization, issuance and sale of the Securities has been duly and validly taken. The Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement.
(h) Capitalization. The capitalization of the Company is as set forth in the Registration Statement, the Preliminary Prospectus and the Prospectus. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set forth in the Preliminary Prospectus and the Prospectus, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth in the Preliminary Prospectus and the Prospectus, and as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or the capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Underwriters). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement, Preliminary Prospectus and the Prospectus. The offers and sales of the Company’s securities were at all relevant times either registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
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(i) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus and the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Registration Statement, Preliminary Prospectus and Prospectus and the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the Registration Statement, the Preliminary Prospectus, the Prospectus and the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the Preliminary Prospectus, the Prospectus or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Preliminary Prospectus, the Prospectus or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.
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(j) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the Registration Statement, Preliminary Prospectus and Prospectus, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans and (vi) no officer or director of the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
(k) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(l) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(m) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Registration Statement, Preliminary Prospectus and the Prospectus, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each, a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of Federal, State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.
(o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(p) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the Registration Statement, Preliminary Prospectus and the Prospectus and which the failure to do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the Registration Statement, Preliminary Prospectus and the Prospectus, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions With Affiliates and Employees. Except as set forth in the Registration Statement, Preliminary Prospectus and the Prospectus, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
(s) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain Fees. Except as set forth in the Preliminary Prospectus and Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company, any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. Except as set forth in the Preliminary Prospectus and Prospectus, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Execution Date. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
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(u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
(v) Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, since the date of the listing of its Common Stock on the Trading Market , received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees of the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(x) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.
(y) Disclosure; 10b-5. The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Preliminary Prospectus and the Prospectus, each as of its respective date, comply in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations. Each of the Preliminary Prospectus and the Prospectus, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to the SEC Reports incorporated by reference in the Preliminary Prospectus or Prospectus), in light of the circumstances under which they were made not misleading; and any further documents when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Preliminary Prospectus or Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.
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(z) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The Registration Statement, Preliminary Prospectus and the Prospectus set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.
(cc) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the FCPA.
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(dd) Accountants. To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2026. The Company Auditor has not, during the periods covered by the financial statements included in the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(ee) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(ff) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
(gg) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s request.
(hh) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ii) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(jj) D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the Company’s directors and officers immediately prior to the Offering and in the Lock-Up Agreement provided to the Underwriters is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect.
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(kk) FINRA Affiliation. To the Company’s knowledge, no officer, director or any beneficial owner of 5% or more of the Company’s unregistered securities has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA) that is participating in the Offering. The Company will advise the Representative and EGS if it learns that any officer, director or owner of 5% or more of the Company’s outstanding shares of Common Stock or Common Stock Equivalents is or becomes an affiliate or associated person of a FINRA member firm.
(ll) Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or EGS shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
(mm) Board of Directors. The Board of Directors is comprised of the persons set forth under the heading of the Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent” as defined under the rules of the Trading Market.
(nn) Cybersecurity. There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
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(oo) Compliance with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the last three (3) years were, in compliance with all applicable state, federal and foreign data privacy and security laws and regulations, including, without limitation, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”); (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (as defined below) (the “Policies”); (iii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by the Privacy Laws; and (iv) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of the Transaction Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries (i) to the knowledge of the Company, has received written notice of any actual or potential liability of the Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.
(pp) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Preliminary Prospectus and the Prospectus, as amended or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Preliminary Prospectus, the Prospectus, the Registration Statement, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement to which the Representative shall reasonably object in writing.
4.2 Federal Securities Laws.
(a) Compliance. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Underwriters promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.
(b) Filing of Final Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Representative) with the Commission pursuant to the requirements of Rule 424.
(c) Exchange Act Registration. For a period of three years from the Execution Date, the Company will use its best efforts to maintain the registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act without the prior written consent of the Representative.
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(d) Free Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative is herein referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing where required, legending and record keeping.
4.3 Delivery to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriters may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to the Representative two (2) original executed Registration Statements, including exhibits, and all post-effective amendments thereto and copies of all exhibits filed therewith or incorporated therein by reference and all original executed consents of certified experts.
4.4 Effectiveness and Events Requiring Notice to the Underwriters. The Company will use its best efforts to cause the Registration Statement to remain effective with a current prospectus until the later of nine (9) months from the Execution Date and the date on which the Warrants are no longer outstanding, and will notify the Underwriters and holders of the Warrants immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 4.4 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.
4.5 Review of Financial Statements. For a period of five (5) years from the Execution Date, the Company, at its expense, shall cause its regularly engaged independent registered public accountants to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior to the announcement of quarterly financial information.
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4.6 Expenses of the Offering.
(a) General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering (including the Option Shares) with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of such Closing Shares, Option Shares and Warrant Shares on the Trading Market and such other stock exchanges as the Company and the Representative together determine; (c) all fees, expenses and disbursements relating to the registration or qualification of such Securities under the “blue sky” securities laws of such states and other foreign jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the fees and expenses of Blue Sky counsel, if applicable); (d) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (e) the costs and expenses of the Company’s public relations firm; (f) the costs of preparing, printing and delivering the Securities; (g) fees and expenses of the Transfer Agent for the Securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company); (h) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (i) the fees and expenses of the Company’s accountants; (j) the fees and expenses of the Company’s legal counsel and other agents and representatives; (k) the Underwriters’ costs of mailing prospectuses to prospective investors; (l) expenses of the Underwriters’ use of i-Deal’s book-building, prospectus tracking and compliance software (or other similar software) for the Offering. The Underwriters may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or each Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.
(b) Expenses of the Representative. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.6(a), on the Closing Date it will reimburse the Representative up to $100,000 for its reasonable and documented out-of-pocket expenses by deduction from the proceeds of the Offering contemplated herein.
4.7 Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption “Use of Proceeds” in the Prospectus.
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4.8 Delivery of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules and Regulations under the Securities Act, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve consecutive months beginning after the Execution Date.
4.9 Stabilization. Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
4.10 Internal Controls. The Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
4.11 Accountants. The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least three years after the Execution Date. The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.
4.12 FINRA. The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater shareholder of the Company becomes an affiliate or associated person of an Underwriter.
4.13 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.
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4.14 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws).
4.15 Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
4.16 Securities Laws Disclosure; Publicity. At the request of the Representative, by [9:00 a.m.] (New York City time) on the date hereof, the Company shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult with each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The Company will not issue press releases or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m. (New York City time) on the first business day following the 45th day following the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.
4.17 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Underwriter of the Securities is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Underwriter of Securities could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities.
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4.18 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Option Shares pursuant to the Option and Warrant Shares pursuant to any exercise of the Warrants.
4.19 Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Closing Shares, Option Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Closing Shares, Option Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Closing Shares, Option Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Closing Shares, Option Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.20 Subsequent Equity Sales.
(a) From the date hereof until ninety (90) days following the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or file any registration statement or amendment or supplement thereto, other than the Prospectus.
(b) From the date hereof until one hundred eighty (180) days following the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the Company may issue securities at a future determined price regardless of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled; provided, however, that, after ninety (90) days after the Closing Date, the entry into and/or issuance of shares of Common Stock in an equity line of credit, also referred to as a synthetic ATM or committed equity facility, shall not be deemed a Variable Rate Transaction. Any Underwriter shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
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(c) Notwithstanding the foregoing, this Section 4.20 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.
4.21 Research Independence. The Company acknowledges that each Underwriter’s research analysts and research departments, if any, are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriter’s research analysts may hold and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriter’s investment banking divisions. The Company acknowledges that the Representative is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities of the Company.
ARTICLE V.
DEFAULT BY UNDERWRITERS
If on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing Securities or Option Shares, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall use their reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities or Option Shares, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Securities or Option Shares, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing Securities or Option Shares, as the case may be, with respect to which such default shall occur does not exceed 10% of the Closing Securities or Option Shares, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing Securities or Option Shares, as the case may be, which they are obligated to purchase hereunder, to purchase the Closing Securities or Option Shares, as the case may be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities or Option Shares, as the case may be, with respect to which such default shall occur exceeds 10% of the Closing Securities or Option Shares, as the case may be, covered hereby, the Company or the Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. The term “Underwriter” includes any Person substituted for a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
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ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters, and each dealer selected by each Underwriter that participates in the offer and sale of the Securities (each a “Selected Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any Proceeding, commenced or threated (whether or not such Underwriter is a target of or party to such Proceeding), or arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, the Registration Statement or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Article VI, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus, the Registration Statement or Prospectus, or any amendment or supplement thereto, or in any application, as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Public Securities or in connection with the Registration Statement or Prospectus.
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6.2 Procedure. If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld.
6.3 Indemnification of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors, officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or on behalf of such Underwriter expressly for use in such Preliminary Prospectus, the Registration Statement or Prospectus or any amendment or supplement thereto or in any such application. In case any action shall be brought against the Company or any other Person so indemnified based on any Preliminary Prospectus, the Registration Statement or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against such Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters’ obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting obligations and not joint.
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6.4 Contribution.
(a) Contribution Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided, that, no Person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable, and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters’ obligations in this Section 6.4 to contribute are several in proportion to their respective underwriting obligations and not joint.
(b) Contribution Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.
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ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to proceed with the delivery of the Securities, or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.
(b) Expenses. In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of EGS up to $25,000 (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(c) Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus and the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. Notwithstanding anything herein to the contrary, the Engagement Agreement, dated May 19, 2026 (the “Engagement Agreement”), by and between the Company and the Representative, shall continue to be effective and the terms therein, including, without limitation, Section 5(c) with respect to any future offerings, shall continue to survive and be enforceable by the Representative in accordance with its terms, provided that, in the event of a conflict between the terms of the Engagement Agreement and this Agreement, the terms of this Agreement shall prevail.
7.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via e-mail attachment at the email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
7.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
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7.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
7.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
7.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the prevailing party in such Action or Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
7.8 Survival. The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery of the Securities.
7.9 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
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7.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
7.11 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.
7.12 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
7.13 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
7.14 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
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If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance with its terms.
| Very truly yours, | |||
| BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
Address for Notice:
1540 Broadway, Ste. 1010
New York, NY 10036
Attn: Jerry Tang
Email: jerry.tang@vcvdigital.com
Copy to:
Tahra Wright, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attn: Tahra Wright
Email: twright@loeb.com
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Accepted on the date first above written.
LUCID CAPITAL MARKETS, LLC
As the Representative of the several
Underwriters listed on Schedule I
By: Lucid Capital Markets, LLC
| By: | |||
| Name: | |||
| Title: | |||
Address for Notice:
Lucid Capital Markets, LLC
570 Lexington Avenue, 40th Floor
New York, New York 10022
Attn: John Lipman
Email: Jlipman@lucidcm.com
Copy to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attn: Robert Charron
Email: rcharron@egsllp.com
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SCHEDULE I
Schedule of Underwriters
| Underwriters | Closing Shares | Closing Warrants | Closing Purchase Price |
| Lucid Capital Markets, LLC | |||
| Total |
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Exhibit 4.2
PRE-FUNDED COMMON STOCK PURCHASE WARRANT
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
| Warrant Shares: [______] | Initial Exercise Date: [_______], 2026 |
THIS PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [_____________] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from BlockchAIn Digital Infrastructure, Inc., a Delaware corporation (the “Company”), up to [______] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333-[______]).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Securities Transfer Corporation, the current transfer agent of the Company, and any successor transfer agent of the Company.
“Underwriting Agreement” means the underwriting agreement, dated as of [_________], 2026, among the Company and Lucid Capital Markets, LLC as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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“Warrants” means this Warrant and other Pre-Funded Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise on the Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the highest Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) within two (2) hours of the time of the Holder’s delivery of the Notice of Exercise pursuant to Section 2(a) hereof if such Notice of Exercise is delivered during “regular trading hours,” or within two (2) hours after the close of “regular trading hours,” on a Trading Day or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered pursuant to Section 2(a) hereof after two (2) hours following the close of “regular trading hours” on such Trading Day; |
| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) | = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
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If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Underwriting Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
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iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. Notwithstanding anything to the contrary set forth herein, it shall be the sole responsibility of the Holder to ensure that the exercise of this Warrant, when taken together with all other shares of Common Stock beneficially owned by the Holder and its Affiliates, does not result in the Holder (together with its Affiliates) owning in excess of the Beneficial Ownership Limitation set forth herein. The Company shall have no obligation or responsibility to monitor or determine the Holder’s ownership percentage or compliance with the Beneficial Ownership Limitation and, in connection with any exercise of this Warrant, the Company shall be entitled to rely solely on the Exercise Notice delivered by the Holder. The Company shall not be required to make any independent inquiry or investigation relating thereto.
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
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b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
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f) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer of Warrant.
a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
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b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
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Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
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h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 1540 Broadway, Ste. 1010, New York, NY 10036, Attention: Jolienne Halisky, Chief Financial Officer, email address: jolienne.halisky@vcvdigital.com with a copy (which shall not constitute notice) to Loeb & Loeb, at 345 Park Avenue, New York, NY 10036, Attention: Tahra Wright, email address: twright@loeb.com, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. Other than Section 2(e) above and this Section 5(l), which may not be amended, modified or waived, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| bLOCKCHAIN DIGITAL INFRASTRUCTURE, INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
NOTICE OF EXERCISE
| To: | blockchain digital infrastructure, inc. |
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |
| (Please Print) | |
| Address: | |
| (Please Print) | |
| Phone Number: | |
| Email Address: | |
| Dated: _______________ __, ______ | |
| Holder’s Signature: | |
| Holder’s Address: |
Exhibit 4.3
REPRESENTATIVE COMMON STOCK PURCHASE WARRANT
BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC.
| Warrant Shares: [______] | Initial Exercise Date: [_______], 2026 |
THIS REPRESENTATIVE COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [___________] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [_____]1 (the “Termination Date”) but not thereafter, to subscribe for and purchase from BlockchAIn Digital Infrastructure, Inc., a Delaware corporation (the “Company”), up to [______] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant is being issued pursuant to the Underwriting Agreement.
Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
| 1 | Insert the date that is the 5 year anniversary of the commencement of sales of the offering. |
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333-[______]).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Securities Transfer Corporation, the current transfer agent of the Company, and any successor transfer agent of the Company.
“Underwriting Agreement” means the underwriting agreement, dated as of [_________], 2026, among the Company and Lucid Capital Markets, LLC as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Warrants” means this Warrant and other Representative Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise on the Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
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b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[_____], subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the highest Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) within two (2) hours of the time of the Holder’s delivery of the Notice of Exercise pursuant to Section 2(a) hereof if such Notice of Exercise is delivered during “regular trading hours,” or within two (2) hours after the close of “regular trading hours,” on a Trading Day or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered pursuant to Section 2(a) hereof after two (2) hours following the close of “regular trading hours” on such Trading Day; |
| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) | = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
| d) | Mechanics of Exercise. |
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
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ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
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vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. Notwithstanding anything to the contrary set forth herein, it shall be the sole responsibility of the Holder to ensure that the exercise of this Warrant, when taken together with all other shares of Common Stock beneficially owned by the Holder and its Affiliates, does not result in the Holder (together with its Affiliates) owning in excess of the Beneficial Ownership Limitation set forth herein. The Company shall have no obligation or responsibility to monitor or determine the Holder’s ownership percentage or compliance with the Beneficial Ownership Limitation and, in connection with any exercise of this Warrant, the Company shall be entitled to rely solely on the Exercise Notice delivered by the Holder. The Company shall not be required to make any independent inquiry or investigation relating thereto.
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Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise, other than cash (including, without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the VWAP immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier), (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction.] The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
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e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer of Warrant.
a) Transferability. Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of the offering pursuant to which this Warrant is being issued, except as permitted under FINRA Rule 5110(e)(2). Subject to the foregoing restriction, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
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b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 1540 Broadway, Ste. 1010, New York, NY 10036, Attention: Jolienne Halisky, Chief Financial Officer, email address: jolienne.halisky@vcvdigital.com, with a copy (which shall not constitute notice) to Loeb & Loeb, at 345 Park Avenue, New York, NY 10036, Attention: Tahra Wright, email address: twright@loeb.com or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
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i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. Other than Section 2(e) above and this Section 5(l), which may not be amended, modified or waived, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| BLOCKCHAIN DIGITAL INFRASTRUCTURE, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
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NOTICE OF EXERCISE
| To: | blockchain digital infrastructure, inc. |
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |
| (Please Print) | |
| Address: | |
| (Please Print) | |
| Phone Number: | |
| Email Address: | |
| Dated: _______________ __, ______ | |
| Holder’s Signature: | |
| Holder’s Address: |
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Exhibit 5.1
 |
345 Park Avenue |
Main 212.407.4000 |
June 1, 2026
BlockchAIn Digital Infrastructure, Inc.
1540 Broadway, Suite 1010
New York, New York 10036
| Re: | BlockchAIn Digital Infrastructure, Inc. - Registration Statement on Form S-1 |
Ladies and Gentlemen:
We have acted as counsel to BlockchAIn Digital Infrastructure, Inc., a Delaware corporation (the “Company”), in connection with the preparation and filing of the Company’s registration statement on Form S-1 (as amended or supplemented from time to time, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), filed by the Company with the Securities and Exchange Commission (the “Commission”), including the prospectus contained therein (the “Prospectus”). The Registration Statement relates to the offering by the Company of up to a maximum aggregate offering price of $72,036,000of (i) shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), (ii) pre-funded warrants (the “Pre-funded Warrants”) to purchase shares of Common Stock (the “Pre-funded Warrant Shares”), (iii) the Pre-funded Warrant Shares underlying the Pre-Funded Warrants, (iv) additional shares of Common Stock (the “Option Shares”) that may be purchased by the representative of the underwriters pursuant to an option granted by the Company to cover over-allotments, if any (the “Over-allotment Option”), (v) warrants to be issued to the representative of the underwriters in the Company’s offering (the “Representative Warrants”) to purchase up to 4% of the number of shares of Common Stock sold in the offering, including any shares of Common Stock sold to cover over-allotments, if any, and (vi) the shares of Common Stock underlying the Representative Warrants (the “Representative Shares”). The Shares, the Pre-funded Warrants, the Option Shares and the Representative Warrants will be sold by the Company pursuant to an underwriting agreement to be entered into by and between the Company and Lucid Capital Partners, LLC, acting as representative of the several underwriters named therein, in the form filed as Exhibit 1.1 to the Registration Statement (the “Underwriting Agreement”).
In connection with this opinion letter, we have examined and relied upon original, certified, conformed, photostat or other copies of (a) the Amended and Restated Certificate of Incorporation, and the Amended and Restated Bylaws, of the Company, (b) resolutions of the board of directors of the Company, (c) the Registration Statement and the exhibits thereto; (d) the form of Underwriting Agreement, (e) the form of Pre-funded Warrant, (f) the form of Representative Warrant, and (g) such corporate records of the Company, certificates of public officials, certificates of officers of the Company and other documents, agreements and instruments as we have deemed necessary as a basis for the opinions herein contained. In all such examinations, we have assumed the genuineness of all signatures on original documents, and the conformity to originals or certified documents of all copies submitted to us as conformed, photostat or other copies. In passing upon certain corporate records and documents of the Company, we have assumed the correctness and completeness of the statements made or included therein by the Company, and we express no opinion thereon.
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We have further assumed the legal capacity of natural persons, and we have assumed that each party to the documents we have examined or relied on (other than the Company) has the legal capacity or authority and has satisfied all legal requirements that are applicable to that party to the extent necessary to make such documents enforceable against that party.
Based upon the foregoing, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that:
| 1. | The Shares have been duly authorized for issuance by the Company and, when issued, delivered and paid for in accordance with the terms of the Underwriting Agreement, the Registration Statement and the Prospectus, the Shares will be validly issued, fully paid and non-assessable. |
| 2. | The Pre-funded Warrants have been duly authorized for issuance by the Company and, when issued, delivered and paid for in accordance with the terms of the Underwriting Agreement, the Registration Statement and the Prospectus the Pre-funded Warrants will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 3. | The Pre-funded Warrant Shares have been duly authorized for issuance by the Company and, when issued and delivered upon the exercise of the Pre-funded Warrants in accordance with the terms of the Pre-funded Warrants, including without limitation, the payment in full of applicable consideration, the Pre-funded Warrant Shares will be validly issued, fully paid and non-assessable. |
| 4. | The Option Shares have been duly authorized for issuance by the Company and, when issued and delivered and paid for upon the exercise of the Over-allotment Option in accordance with the terms of the Underwriting Agreement, the Registration Statement and the Prospectus, the Option Shares will be validly issued, fully paid and non-assessable. |
| 5. | The Representative Warrants have been duly authorized for issuance by the Company and, when issued and delivered by the Company in accordance with the terms of the Underwriting Agreement, the Registration Statement and the Prospectus, the Representative Warrants will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 6. | The Representative Shares have been duly authorized for issuance by the Company and, when issued and delivered upon the exercise of the Representative’s Warrants in accordance with the terms of the Representative Warrants, including, without limitation, the payment in full of applicable consideration, the Representative Shares will be validly issued, fully paid and non-assessable. |
| |
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The opinions we express above are based upon a review only of those laws, statutes, rules, ordinances and regulations which, in our experience, a securities lawyer who is a member of the bar of the State of New York and practicing before the Commission exercising customary professional diligence would reasonably recognize as being applicable to the foregoing transactions.
The opinions set forth in paragraphs 2 and 5 above are subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and (ii) the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.
We express no opinion as to the enforceability of (i) provisions that relate to choice of law, forum selection or submission to jurisdiction (including, without limitation, any express or implied waiver of any objection to venue in any court or of any objection that a court is an inconvenient forum) to the extent that the validity, binding effect or enforceability of any such provision is to be determined by any court other than a state court of the State of New York and (ii) waivers by the Company of any statutory or constitutional rights or remedies. We draw your attention to the fact that, under certain circumstances, the enforceability of terms to the effect that provisions may not be waived or modified except in writing may be limited.
The opinions we express herein are limited to matters involving the internal laws of the State of New York and the Delaware General Corporation law.
We hereby consent to the filing of this opinion letter with the Commission as Exhibit 5.1 to the Registration Statement in accordance with the requirements of Item 601(b)(5) of Regulation S−K under the Securities Act and to the reference to our firm therein and in the Prospectus under the caption “Legal Matters.” In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Loeb & Loeb LLP
Loeb & Loeb LLP
Exhibit 10.33
Chief Financial Officer (CFO) Agreement
This Agreement (“Agreement”) is entered into as of August 11, 2025, by and between Tiger Cloud LLC (“Company”), a Delaware limited liability company, and Jolienne Halisky (“CFO”), a resident of Canada.
| 1. | Position and Duties |
The Company engages CFO to serve as its Chief Financial Officer.
CFO shall report to the CEO and Board of Directors, performing duties consistent with the role.
CFO shall exercise good faith, professional judgment, and reasonable skill in fulfilling such duties.
| 2. | Status of Engagement |
The parties acknowledge that the Company does not maintain a Canadian legal entity. CFO shall be engaged as an independent contractor.
CFO shall be solely responsible for all Canadian tax obligations, including income tax, CPP, EI, and health/benefits coverage.
The Company shall not withhold or remit any Canadian source deductions.
| 3. | Compensation |
Base Fee: $225,000 USD per year, payable in accordance with Company policy. Compensation to be paid in Canadian dollars.
Bonus: CFO may be eligible for performance-based bonuses as determined by the Board. Equity/Options (if applicable).
Vacation, Sick Leave, and Holidays
| ● | The CFO shall be entitled to four (4) weeks of paid vacation per calendar year, to be scheduled at times mutually convenient to the CFO and the Company. Vacation time shall not accrue or carry over from year to year unless otherwise approved in writing by the Company. | |
| ● | The CFO shall also be entitled to five (5) paid sick days per calendar year for illness or medical appointments. Unused sick days shall not be carried over or paid out at termination. |
| 4. | Expenses |
The Company shall reimburse CFO for reasonable and pre-approved business expenses, with receipts.
| 5. | Confidentiality and Restrictive Covenants |
CFO shall maintain confidentiality regarding Company proprietary information.
For 12 months following termination, CFO shall not engage in directly competitive activities within the scope of the signed non disclosure agreement.
| 6. | Term and Termination |
Commencement: This Agreement begins on August 11th.
Termination for Cause: Immediate termination upon fraud, intentional misconduct, or gross negligence.
Termination Without Cause: Either party may terminate with 60 days’ written notice. Severance: 6 months of continued pay if terminated without cause including payment of any earned but unpaid bonus for the fiscal year completed prior to termination.
| 7. | Limitation of Liability |
No Personal Liability: CFO shall have no personal liability to the Company, its members, officers, or affiliates, for any act or omission performed in good faith and within the scope of this Agreement.
CFO’s personal liability, if any, shall be limited solely to acts of fraud or intentional misconduct.
| 8. | Indemnification |
The Company shall indemnify, defend, and hold harmless CFO from any and all claims, liabilities, damages, costs, or expenses (including reasonable legal fees) arising from or related to CFO’s performance of duties under this Agreement, provided CFO acted in good faith.
This includes indemnification for third-party claims, regulatory actions, or cross-border compliance inquiries.
| 9. | Tax Indemnification |
The Company acknowledges that CFO is a Canadian resident engaged by a U.S. company without a Canadian payroll entity.
CFO shall be responsible for self-assessing and remitting Canadian income tax, CPP, and other statutory contributions arising from compensation received.
The Company agrees to indemnify and hold CFO harmless from any liability, penalties, or interest assessed by U.S. or Canadian tax authorities arising from the Company’s failure to:
| - | properly classify CFO’s engagement, |
| - | withhold or remit required taxes in the U.S., or |
| - | comply with cross-border reporting obligations. |
This indemnification does not extend to CFO’s own failure to report or remit Canadian personal taxes properly.
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| 10. | Directors & Officers (D&O) Insurance |
The Company shall maintain Directors & Officers (D&O) liability insurance at commercially reasonable levels, covering its officers and directors, including the CFO.
Such policy shall provide coverage for claims arising from acts or omissions taken in good faith within the scope of CFO’s duties.
The Company shall provide CFO with evidence of such coverage upon request and shall not materially reduce or cancel such coverage without thirty (30) days’ prior written notice.
Note: D&O insurance currently being evaluated / negotiated and will be in place by end of September 2025.
| 11. | Governing Law |
This Agreement shall be governed by the laws of the State of Delaware, U.S.A., without regard to conflict of laws.
| 12. | Entire Agreement |
This Agreement represents the full understanding between the parties and supersedes prior discussions or agreements.
| 13. | Dispute Resolution |
In the event of any dispute, controversy, or claim arising out of or relating to this Agreement, the parties shall first attempt in good faith to resolve such matter through negotiation and mediation.
If the dispute is not resolved through mediation within thirty (30) days of written notice of the dispute, the matter shall be submitted to binding arbitration administered by the American Arbitration Association (AAA) in accordance with its Employment Arbitration Rules.
| ● | The arbitration shall be conducted in New York, New York, U.S.A., unless otherwise mutually agreed by the parties. | |
| ● | The arbitration shall be conducted before a single arbitrator experienced in employment and executive agreements. |
| ● | The decision of the arbitrator shall be final and binding, and judgment upon the award may be entered in any court of competent jurisdiction. |
| ● | Each party shall bear its own legal fees and costs, unless the arbitrator determines otherwise in the award. |
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| Tiger Cloud LLC | CFO | |||
| By: | /s/ Amanda Klier | By: | /s/ Jolienne Halisky | |
| Name: | Amanda Klier | Name: | Jolienne Halisky, CPA | |
| Title: | Partner, Managing Director | |||
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Exhibit 10.34
January 14, 2026
Mr. Eyal Rozen
erozen67@gmail.com
Dear Mr. Rozen,
On behalf of One Blockchain LLC (“Employer”), we are pleased to formalize this offer of employment to join our team to provide services to Employer and its successors, parent, subsidiaries and affiliates. This letter and the attached Non-Disclosure and Restrictive Covenant Agreement confirm the terms and conditions of our employment offer to you. The start date of your employment with Employer is January 15, 2026 (the “Effective Date”).
1. Position and Reporting Relationship: Your title will be Chief Operating Officer, and you will be based in our New York office located at 1540 Broadway Suite 1010, New York, NY 10036. You will report to Jerry Tang. You will be responsible for the duties customarily attendant to Chief Operating Officer role, and such other duties as may be assigned to you by the Employer from time to time. You are expected to carry out your duties working with other employees in a diligent and professional manner, comply with all of Employer’s policies and practices, explicit or implied as are in effect from time to time, and generally promote the interests of the Employer and its affiliates. The Employer retains sole discretion to change your job title and responsibilities at any time without advanced notice.
2. Compensation: Your current base salary will be payable at the annual rate of $250,000, less applicable withholdings and deductions. Effective April 15, 2026, your base salary will increase to an annualized rate of $300,000, less applicable withholdings and deductions. Your base salary is subject to adjustment by the Employer in its sole discretion. Your salary will be paid semi-monthly in accordance with Employer’s regular payroll practices. You will receive separately a Notice and Acknowledgement of Pay Rate and Payday as required by New York State Labor Law, for your signature and return to me immediately. You are an exempt employee.
3. Bonus: You will be eligible for the following bonus and equity awards, subject to your continued employment through the applicable vesting or payment dates:
| ● | Salary Adjustment Bonus: In recognition of the three (3) month period between your start date and the implementation of your increased base salary, you will receive a one-time cash bonus in the amount of $12,500, payable in April 2026, subject to applicable withholdings and deductions. To be eligible for payment, you must be an active employee and not have given notice of resignation or received notice of termination prior to the payment date. |
| ● | Equity Grant: You will be eligible for an equity grant of up to four percent (4%) of One Blockchain in the form of at-the-money strike options (strike price equal to the fair market value of the equity at the time of grant), contingent upon achievement of key performance indicators (KPIs) to be mutually agreed upon between you and the Company and documented in a separate written agreement. |
The equity award will vest over a four (4) year period, subject to your continued employment and in accordance with the terms of the Company’s equity incentive plan and the applicable equity grant agreement. The final grant amount, vesting schedule, and all other terms and conditions will be set forth in a separate equity grant agreement to be provided following the establishment of the KPIs.
| ● | Annual Discretionary Bonus: You will also be eligible for an end-of-year discretionary cash bonus. If awarded, the amount, if any, will be determined by the Company at its sole discretion and paid at the time annual bonuses are distributed. Bonuses are considered earned only when paid. To be eligible for payment, you must be an active employee and not have given notice of resignation or received notice of termination prior to the payment date. All bonuses are subject to applicable withholdings and deductions. |
4. Employee Benefits: You continue to be eligible to participate in the employee medical benefit programs established by the Employer for full-time employees at your level, subject to the Employer’s right to modify or terminate such benefit plans or programs at any time in its sole discretion and subject to the eligibility requirements and rules of each such plan or program. Nothing herein should be seen as a guarantee of any benefit to you or any other employee.
5. Vacation: You continue to be eligible to use fifteen (15) days of paid time off (“PTO”) for each full calendar year of employment, to be used for both scheduled and unscheduled time that you need to be out of the office. PTO days shall be pro-rated for any partial year. Vacation time accrues over the course of the year. Use of PTO is subject to approval by your manager. You may carry-over a maximum of five (5) PTO days into a new calendar year. Employer reserves the right to modify the number of PTO days for each calendar year.
6. Sick Leave: You continue to be eligible to use five (5) sick days for each calendar year of employment. Use of sick leave is subject to approval by your manager. You may carry over a maximum of five
(5) sick days into a new calendar year.
7. Employment At Will: Your employment with the Employer is at-will, which means it is not for any specific term and can be terminated by you or by the Employer at any time for any reason, with or without notice or cause. The Employer requires that you provide no less than two weeks’ written notice if you intend to resign your position at Employer. Nothing in this offer letter is meant as a promise or guarantee of employment or of the terms and conditions of your employment.
8. Non-Disclosure Confidential Information and Restrictive Covenants: As a condition of your employment, you have signed the requisite Employer’s Non- Disclosure and Restrictive Covenant Agreement and such terms will be incorporated herein by reference. Please be aware that, in addition to requiring you to sign the Non-Disclosure and Restrictive Covenant Agreement, you also are expected to retain in confidence and not to disclose or use in your employment with the Employer any confidential information you have obtained from your previous employer(s).
9. Prior Restrictive Obligations: This employment offer is contingent on there being no outstanding obligations on your part, including any non-competition or confidentiality agreements that would restrict you in any way from fulfilling your job responsibilities to the Employer in the position offered to you. You also are expected to retain in confidence and not to disclose or use in your employment with the Employer any confidential information you have obtained from your previous employer(s).
10. Authorization to Work: In connection with your hire, you have provided the Employer with the legally required proof of your identity and authorization to work in the United States.
11. Entire Agreement: This Letter Agreement and the previously signed Non-Disclosure and Restrictive Covenant Agreement contain the entire agreement between you and the Employer regarding the terms of your employment. You acknowledge that you have not relied upon any representations (oral or communicated otherwise) other than those explicitly set forth in such documents. Any additions or modification of the terms set forth in this letter would have to be in writing signed by the Employer’s CEO. The Employer reserves the right to change any of the terms or conditions of your employment at any time in its sole discretion.
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Once you have had an opportunity to carefully review the foregoing, please let me know if you have any questions or concerns. We look forward to having you join our team and look forward to a long, mutually satisfying relationship.
Sincerely,
| /s/ Amanda Klier | |
| Amanda Klier | |
| CPO |
Enclosure: Non-Disclosure and Restrictive Covenant Agreement
Please sign below to indicate your acceptance of the above terms and return a signed copy to me.
| Accepted by | Eyal Rozen |
| (Print Name) | Eyal Rozen | Date | 1/14/2026 |
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Exhibit 10.35
May 6, 2026
Mr. Gary Heitz
garyheitz80@gmail.com
Dear Mr. Heitz,
On behalf of Tiger AIDC LLC (“Employer”), we are pleased to formalize this offer of employment to join our team to provide services to Employer and its successors, parent, subsidiaries and affiliates. This letter and the Non-Disclosure and Restrictive Covenant Agreement confirm the terms and conditions of our employment offer to you. The start date of your employment with Employer is May 21, 2026 (the “Effective Date”).
1. Position and Reporting Relationship: Your title will be VP of Sales and you will work remotely but may be required to report to our office located at 1540 Broadway Suite 1010, New York, NY 10036. You will report to Eyal Rozen. You will be responsible for the duties customarily attendant to a VP of Sales role, and such other duties as may be assigned to you by the Employer from time to time. You are expected to carry out your duties working with other employees in a diligent and professional manner, comply with all of Employer’s policies and practices, explicit or implied as are in effect from time to time, and generally promote the interests of the Employer and its affiliates. The Employer retains sole discretion to change your job title and responsibilities at any time without advanced notice.
2. Compensation: You will receive a base salary payable at the annual rate of $210,000 less applicable withholdings and deductions as of the Effective Date. Your base salary is subject to adjustment by the Employer in its sole discretion. Your salary will be paid semi-monthly in accordance with Employer’s regular payroll practices. You will receive separately a Notice and Acknowledgement of Pay Rate and Payday as required by New York State Labor Law, for your signature and return to me immediately. You are an exempt employee.
3. Bonus: You are eligible for a commission bonus calculated as set forth below. All bonuses shall be subject to applicable withholdings and deductions, and you must be an active employee who has not provided notice of intent to resign or been provided notice by Employer of intention to terminate at the time each payment is made to be eligible.
| ● | New Deals (Tenants Directly Originated and Closed by You): You are eligible for a bonus of 0.5% of the base rent actually collected by the Company under executed lease agreements for tenants directly originated and closed by you, for a period of up to seven (7) years from the rent commencement date of each lease, regardless of the total lease term. This bonus may be in the form of cash and is structured as follows: |
| ○ | 35% of the total commission attributable to each lease shall be payable upon contract execution; and |
| ○ | The remaining 65% shall be earned and paid proportionally as power is installed and accepted by the customer in accordance with the deployment ramp schedule. For example, on a 50MW contract with a 5MW/month ramp, the remaining 65% would be paid incrementally over the 10-month deployment period, aligned with the ramp schedule until full installation and customer acceptance. |
| ● | Existing Pipeline Deals (Deals at the Negotiation Stage as of Your Start Date): You are eligible for a bonus of 0.25% of the base rent actually collected by the Company under executed lease agreements for deals already in the pipeline at the negotiation stage as of your Effective Date, for a period of up to seven (7) years from the rent commencement date of each lease, regardless of the total lease term. This bonus may be in the form of cash and is structured as follows: |
| ○ | 35% of the total commission attributable to each lease shall be payable upon contract execution; and |
| ○ | The remaining 65% shall be earned and paid proportionally as power is installed and accepted by the customer in accordance with the deployment ramp schedule, consistent with the structure described above. |
All bonus payments shall be paid on the next semi-monthly payroll following the applicable triggering event (contract execution, in the case of the 35% upfront payment, and installation and acceptance of power, in the case of the 65% ongoing payments).
4. Employee Benefits: Starting on the Effective Date, you will be eligible to participate in the employee medical benefit programs established by the Employer for full-time employees at your level, subject to the Employer’s right to modify or terminate such benefit plans or programs at any time in its sole discretion and subject to the eligibility requirements and rules of each such plan or program. Nothing herein should be seen as a guarantee of any benefit to you or any other employee.
5. Vacation: Starting on the Effective Date, you will be eligible to use fifteen (15) days of paid time off (“PTO”) for each full calendar year of employment, to be used for both scheduled and unscheduled time that you need to be out of the office. PTO days shall be pro-rated for any partial year. Vacation time accrues over the course of the year. Use of PTO is subject to approval by your manager. You may carry-over a maximum of five (5) PTO days into a new calendar year. Employer reserves the right to modify the number of PTO days for each calendar year.
6. Sick Leave: Starting on the Effective Date, you will be eligible to use five (5) sick days for each calendar year of employment. Use of sick leave is subject to approval by your manager. You may carry over a maximum of five (5) sick days into a new calendar year.
7. Employment At Will: Your employment with the Employer is at-will, which means it is not for any specific term and can be terminated by you or by the Employer at any time for any reason, with or without notice or cause. The Employer requires that you provide no less than two weeks’ written notice if you intend to resign your position at Employer. Nothing in this offer letter is meant as a promise or guarantee of employment or of the terms and conditions of your employment.
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8. Non-Disclosure Confidential Information and Restrictive Covenants: As a condition of your employment, you will be required to sign the Employer’s Non- Disclosure and Restrictive Covenant Agreement and such terms will be incorporated herein by reference. Please be aware that, in addition to requiring you to sign the Non-Disclosure and Restrictive Covenant Agreement, you also are expected to retain in confidence and not to disclose or use in your employment with the Employer any confidential information you have obtained from your previous employer(s).
9. Prior Restrictive Obligations: This employment offer is contingent on there being no outstanding obligations on your part, including any non-competition or confidentiality agreements that would restrict you in any way from fulfilling your job responsibilities to the Employer in the position offered to you. You also are expected to retain in confidence and not to disclose or use in your employment with the Employer any confidential information you have obtained from your previous employer(s).
10. Authorization to Work: In connection with your hire, you will be required to provide the Employer with the legally required proof of your identity and authorization to work in the United States.
11. Entire Agreement: This Letter Agreement and the attached Non-Disclosure and Restrictive Covenant Agreement contain the entire agreement between you and the Employer regarding the terms of your employment. You acknowledge that you have not relied upon any representations (oral or communicated otherwise) other than those explicitly set forth in such documents. Any additions or modification of the terms set forth in this letter would have to be in writing signed by the Employer’s CEO. The Employer reserves the right to change any of the terms or conditions of your employment at any time in its sole discretion.
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Once you have had an opportunity to carefully review the foregoing, please let me know if you have any questions or concerns. Otherwise, please sign and return the offer letter to me by Friday, May 8, 2026. We look forward to having you join our team and look forward to a long, mutually satisfying relationship.
| Sincerely, | |
| /s/ Amanda Klier | |
| Amanda Klier | |
| Chief of Staff |
Enclosure: Non-Disclosure and Restrictive Covenant Agreement
Please sign below to indicate your acceptance of the above terms and return a signed copy to me.
| Accepted by | /s/ Gary Heitz | |||
| (Print Name) | Gary Heitz | Date | 5/7/2026 |
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Exhibit 10.36
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS A TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
[***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
ELECTRIC SERVICE AGREEMENT
***
WITH
ONE BLOCKCHAIN, LLC
ELECTRIC SERVICE AGREEMENT
THIS AGREEMENT is made this 1st day of October, 2026 (the “Effective Date”), by and between ***, a *** Corporation (the “Company”), party of the first part, and ONE BLOCKCHAIN, LLC , a Delaware limited liability company (the “Customer”), party of the second part.
In consideration of the mutual covenants herein contained, the parties hereto, for themselves, their successors and assigns, do hereby agree that, subject to the following conditions, the Company shall sell and deliver electric power to the Customer, and the Customer shall purchase, receive, use and pay for same:
1. Service Requirements The electric power to be delivered hereunder shall be three phase, alternating, at a frequency of approximately sixty (60) cycles per second, and at approximately 34,500 volts. Delivery of said power shall be made in ***, at a delivery point described as follows: on the high voltage (34.5 kV) side of the Customer’s transformers located on their premises in the ***.
The contract demand shall be 65,000 kilovolt-amperes. The Company will install and own such meter(s) as shall be necessary to measure and record the electrical energy delivered hereunder, such meter(s) to be located: on the Company’s side of the delivery point described above.
The power shall be used at the Customer’s establishment, known as CLT01 located entirely on a single contiguous premises at or near ***.
2. Rate Schedule and Service Regulations The sale, delivery, and use of electric power hereunder, and all services of whatever type to be rendered or performed in connection therewith, shall in all respects be subject to and in accordance with all the terms and conditions of the Company’s Rate Schedule I (Industrial) and its Service Regulations, both of which are now on file with The Public Service Commission of ***, and are hereby incorporated by reference and made a part hereof as though fully set forth herein. Said Rate Schedule and Service Regulations are subject to change, revisions, alteration or substitution, either in whole or in part, upon order of said commission or any other regulatory authority having jurisdiction, and any such change, revision, alteration, or substitution shall immediately be made a part hereof as though fully written herein, and shall nullify any prior provision in conflict therewith.
3. Initial Delivery Date The Company will make commercially reasonable efforts to begin to deliver electric power to the Customer on or before the 15th day of December, 2026 (the “Initial Delivery Date”); provided however, the Initial Delivery Date cannot be earlier than the termination of that certain Electric Services Agreement between the Company and BPV Power Alpha LLC dated October 15, 2021 (“BPV ESA”). However, if the Company is prevented from delivering power, or the customer from accepting power, on said date by reason of strike, stoppage of labor, riot, fire, flood, ice, adverse weather, invasion, civil war, commotion, insurrection, military or usurped power, accident, order of any Court or Judge granted in any bona fide adverse legal proceedings or action, order of any civil authority, explosion, act of God or public enemies, failure of the BPV ESA to be terminated (other than a failure caused by Company not agreeing to such termination), or any other cause reasonably beyond the control of the parties, and not attributable to neglect, then, and in such case or cases, the Initial Delivery Date of power hereunder shall be extended for a period proportionate to such delay or prevention. Notwithstanding any other provision, if Customer has failed to start accepting power within 180 days following the Initial Delivery Date, Company shall have the right to terminate this Agreement upon providing written notice to the Customer.
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4. Term The term of this agreement shall be 15 year(s), beginning on the Initial Delivery Date and continuing thereafter from year to year until terminated. The parties shall have the right of termination provided in the attached Rate Schedule, as from time to time amended; and in the absence of any such provision, either party may terminate this Agreement upon written notice to the other delivered at least sixty (60) days in advance of the termination of the original term or any then existing additional term.
5. Minimum Bill and Payment The minimum Customer Specific Demand Charge, as this term is defined in the Company’s Experimental Rider ED-1, shall be $400,000.00 per month, beginning on the Effective Date. Notwithstanding the foregoing, prior to the Trigger Date (defined below), Customer shall pay $200,000.00 of such monthly minimum charge in cash by the regular due date, and the remaining $200,000.00 of such monthly minimum charge (the “Deferred Minimum Charge”) shall accrue, without interest, and shall become due and payable in a single payment on the earlier of (i) December 31 of the calendar year in which such Deferred Minimum Charge accrued, or (ii) the Trigger Date, with accrual of any Deferred Minimum Charge restarting January 1 of each year following the payment of such Deferred Minimum Charge on December 31 of the prior year. From and after the Trigger Date, the full monthly minimum charge shall be payable in cash by the regular due date, and the foregoing deferral shall no longer apply. “Trigger Date” means the earlier to occur of (a) the date Customer’s demand first reaches 40,000 kilovolt-amperes, or (b) December 31, 2027. Bills will be rendered each month by the Company for the electric power delivered during the preceding month and shall be payable at the office of the Company at ***, on or before the tenth (10th) day after date of such bill, but by no later than the due date as shown on the bill.
6. Quality of Service The Customer agrees that should it use any part of the power delivered hereunder for lighting or for special processes requiring a continuity of service or control, not reasonably obtainable from the lines of the Company, it will install and maintain all proper regulating, controlling and auxiliary apparatus and devices made necessary by the use of said power for such purposes. The Company shall not be required to furnish service to the Customer if the Customer’s equipment is operated in such manner as to cause unreasonable voltage or other electrical fluctuations on the Company’s circuits, which fluctuations are detrimental to service to the Company’s other customers. The Company may impose reasonable restrictions on the use of electric service by the Customer if the Customer creates conditions that prevent the Company from supplying satisfactory service to the Customer, or to the Company’s other customers. The Company may require the Customer to either discontinue operation of the equipment or install the necessary protective apparatus to eliminate the disturbance to any other customers on the Company’s electrical system. Voltage sags and voltage fluctuations are inherent in electric utility transmission and distribution systems. The responsibility for providing unusually close voltage regulation to mitigate the aforementioned voltage fluctuations where required by the nature of the Customer’s load, shall rest with the Customer.
7. Deposit A deposit will be required of a new Customer in an amount equal to an estimated two (2) months maximum bill under full operation. A deposit may be required of a present Customer in an amount equal to the total actual bills of the highest two (2) consecutive months based on the experience of the preceding twelve (12) months. All deposits may be subject to review based on the actual experience of the Customer. The amount of the deposit may be adjusted upward or downward to reflect the actual billing experience and payment habits of the Customer. A deposit may be satisfied by any one of the following methods, in the sole discretion of the Company: (1) Cash Deposit (2) Surety Bond with an A.M. Best rating of B++ (Good) or above (or an equivalent rating from another agency) or (3) Letter of Guarantee by another Company, which is an Industrial Customer of the Company. If the Customer uses a Surety Bond as a deposit, the Customer must file prior to the Initial Delivery Date, and at each renewal date, a certificate with the Company verifying that the Surety Bond is in force.
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8. Infrastructure Early Termination Fee. If Customer fails to commence receipt of electric power or this Agreement is otherwise terminated in advance of the expiration of the original term, Customer shall pay to Company a fee of $250,000, which reflects the incremental economic impact of the Customer on the Company’s infrastructure. As security for the payment of this fee, Customer shall provide a pre-payment of $250,000 no later than thirty (30) days following the Effective Date, and such pre-payment will be applied toward the Customer’s power bills following commencement of electrical service to the Customer.
9. Applicable PPA Provisions. The Company purchases wholesale power generation under a power purchase agreement (“PPA”) with a third party. This PPA may in the future have specific provisions applicable to Customer, in which case Company will notify Customer and apply such provisions to Customer.
10. Operational Requirement. The Company may require the Customer to temporarily operate a portion or all of the Customer’s back-up generation as needed for the Company’s system reliability purposes, for example annual reliability testing or system restoration activities. If so, the Company will provide the Customer reasonable notice if possible, and the Customer will comply with the Company’s requests.
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IN WITNESS WHEREOF, on the day and year first above written, the parties hereto have caused their corporate names to be hereunto subscribed and attested by their respective representatives, executed in duplicate.
| ATTEST: | *** | |||
| By: | /s/*** | By: | /s/*** | |
| Name: | *** | Name: | *** | |
| Title: | Business Controller | Title: | President | |
| ATTEST: | ONE BLOCKCHAIN, LLC | |||
| By: | /s/ Eyal Rozen | By: | Its manager, BlockchAIn Digital Infrastructure, Inc. | |
| By: | Its CEO, Yuan (“Jerry”) Tang | |||
| Name: | Eyal Rozen | Name: | /s/ Jerry Tang | |
| Title: | COO | |||
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Form S-1 Registration Statement of Blockchain Digital Infrastructure, Inc. of our report dated May 27, 2025, except as to note 2, which is as of September 23, 2025, relating to the consolidated balance sheet of One Blockchain LLC (formerly known as BV Power Alpha LLC) as of December 31, 2024 (successor) and 2023 (predecessor), the related statements of income, statements of members’ equity and statements of cash flows for the successor period from February 8, 2024 to December 31, 2024, the predecessor period from January 1, 2024 to February 7, 2024, and the year ended December 31, 2023 (predecessor), and the related notes, appearing in the Form S-4/A Registration Statement of BlockchAIn Digital Infrastructure, Inc. dated December 23, 2025, filed with the Securities and Exchange Commission. We also consent to the reference to us under the heading “Experts” in this Registration Statement.
/s/ Berkowitz Pollack Brant Advisors + CPAs
Miami, Florida
June 2, 2026
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We hereby consent to the inclusion of our reports dated March 31, 2026, relating to the consolidated financial statements of BlockchAIn Digital Infrastructure, Inc. and One Blockchain LLC, respectively, as of December 31, 2025, which appear in this Form S-1 of BlockchAIn Digital Infrastructure, Inc.
Very truly yours,
/s/ Carr, Riggs & Ingram, L.L.C.
Carr, Riggs & Ingram, L.L.C
PCAOB ID Number: 213
Palm Beach Gardens, FL
June 2, 2026