ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview and Recent Developments
The Company was incorporated in the State of Delaware on December 1, 2017, under the name “Dense Forest Acquisition Corporation.” The Company was incorporated on December 1, 2017 as a Delaware corporation under the name “Dense Forest Acquisition Corporation,” Prior to the acquisition of GDHI as a subsidiary, the Company had no operations other than the administrative operations involved with the change in control. The information discussed herein below reflects the results of the Company’s subsidiary, GDHI, an operating company in the snack and gourmet food production, marketing, and distribution industry.
On July 15, 2025 the Company announced that it pivoted to become a blockchain infrastructure business focused on cryptocurrency mining, digital asset treasury (DAT) management, and related blockchain technology initiatives.
On July 16, 2025 the Company formed a wholly owned Wyoming subsidiary under the name DigiHash LLC.
The Company has purchased 10 ASIC miners consisting of Bitmain S21+ on July 17 th . Following the purchase of the initial batch of ASIC miners the company announced on July 22 nd that it had signed a hosting agreement with Simple Mining LLC to host its fleet of miners. As of July 30 th, all miners were plugged in and hashing at full capacity. To accurately represent its business shift and evolution into blockchain the company undergoes and updated logo for more enhanced identity. August 25 th the company unveils innovative crypto forward website leading the way in digital Web 3.0
Cryptocurrency Mining Facility
The Company currently mines out of Cedar Falls Iowa with 2.5 petahash processing power which is equivalent to 2.5 quadrillion hashes per second and plans to develop a 5-megawatt (MW) Bitcoin mining facility, with a proposed location in Iowa, due to the availability of relatively low-cost electricity and environmental conditions favorable for equipment cooling. As of the date of this filing, the Company has started a dialogue with our current partner Simple Mining LLC about identifying, securing, and negotiation for a site development and proforma costs for our own facility. The Company is evaluating potential locations and related financial feasibility before committing to procurement or construction activities.
The planned facility would be custom-designed with ventilation and cooling systems to support mining hardware performance and longevity, and would connect to the local power grid as its primary electricity source. The Company intends to use Application-Specific Integrated Circuit (ASIC) miners, with hybrid diversification of Bitmain S21+ and Bitmain L9 for arbitrage and higher profitability, designed to mine cryptocurrencies using the SHA-256 algorithm and Scrypt miners, such as Bitcoin.
Each ASIC S21+ miner consumes approximately 3,877 watts at full capacity. Ten units would consume roughly 1292 kilowatt-hours per day. Based on an average industrial electricity rate of $0.07 per kilowatt-hour in Iowa, estimated operating costs for ten miners would be approximately $56.60 per day, or $1,698 per month.
The Company’s internal estimates suggest that, under current Bitcoin prices, electricity rates, and depreciation assumptions, each Antminer S21+ miner could generate approximately $6.75 in net daily earnings, with a projected investment break-even period of 1.5 years. These estimates are based on assumptions that may not prove accurate, and there is no assurance that the operation will achieve break-even or attain any profitability.
Recent Developments
On June 6, 2023, the Company entered into a securities purchase agreement (the “1800 Purchase Agreement”) with 1800 Diagonal, pursuant to which the Company issued the 1800 Diagonal Note. The 1800 Diagonal Note has a principal balance of $117,320, and a stated maturity date of April 15, 2024. A one-time interest charge of 13%, or $15,251, was applied on the date of issuance and was immediately expensed. The 1800 Diagonal Note provides that the interest and outstanding principal shall be paid in nine payments, each in the amount of $14,730.11 (a total payback to 1800 Diagonal of $132,571), starting on July 15, 2023, with eight subsequent payments due each month thereafter.
The Company did not make payments when required under the 1800 Diagonal Note, resulting in a default and the commencement of the Action by 1800 Diagonal seeking to recover $151,325.08 of outstanding indebtedness due under the 1800 Diagonal Note. As of January 10, 2024, the Company acknowledged the outstanding indebtedness under the 1800 Diagonal Note, and agreed to pay 1800 Diagonal (a) $5,000 on each of March 1, 2024, April 1, 2024, and May 1, 2024, and (b) $7,500 on June 1, 2024, and the 1st day of each successive month thereafter until the indebtedness is paid in full (anticipated to span approximately 18 months). Provided that all payments are timely made, 1800 Diagonal agreed to forbear and not (a) prosecute the Action, or (b) convert all or any part of the outstanding and unpaid amount of the 1800 Diagonal Note into shares of the Company’s common stock. Any payment not timely received shall constitute a default, and upon such default 1800 Diagonal’s forbearance shall immediately be vacated and 1800 Diagonal shall be free, without restriction, to pursue the Action.
Purchase Agreement with Cove Funding
On March 22, 2024, the Company entered into the Cove Purchase Agreement with Cove Funding, pursuant to which Cove Funding agreed to extend the Cove Loan to the Company in the amount of up to $300,000, in two tranches. On March 22, 2024, the Company issued the Cove Note to Cove Funding in the principal amount of $187,777, evidencing the First Tranche of the Cove Loan. The Company received net proceeds of $150,000 (after deducting a 5% commitment fee, a 5% diligence fee, and Cove Funding’s fees and expenses related to the transaction, including attorney’s fees). The difference between the amount of the First Tranche and $300,000 (less a 5% commitment fee, a 5% diligence fee, and Cove Funding’s fees and expenses related to the transaction, including attorney’s fees) may be funded in a second tranche (the “Second Tranche” and, together with the First Tranche, the “Principal Amount”), upon the Company’s written request, and subject to certain conditions.
The Cove Note has a stated maturity date of July 22, 2024 (as such date may be extended by the parties, the “Maturity Date”), and an interest rate of 12% per annum, which begins to accrue on the First Tranche on the Closing Date and will begin to accrue on the Second Tranche if and when such amount is funded by Cove Funding. Any Principal Amount that is not paid when due will bear interest at a rate of the lesser of (a) 24% per annum, or (b) the maximum amount permitted by law. The Cove Convertible Note may not be prepaid in whole or in part, except as otherwise set forth in the Cove Note. Pursuant to the terms of Cove Note, if the Cove Loan is not repaid on or before the Maturity Date, the Company is required to issue Cove Funding shares of its Common Stock, on a monthly basis (subject to a 4.99% beneficial ownership limitation), with a value of 16.67% of the principal amount of the Cove Loan outstanding as of each issuance date, plus a commitment fee equal to 5% of such outstanding principal amount, until the Cove Loan is repaid in full (collectively, the “Penalty Shares”). In addition, commencing on the Maturity Date, Cove Funding may (subject to a 4.99% beneficial ownership limitation) convert amounts due under the Cove Note into shares of the Company’s Common Stock (collectively, the “Conversion Shares”) at a conversion price equal to the lesser of (a) $0.07, or (b) the five-trading day price average immediately prior to the conversion date. The number of Conversion Shares issuable upon conversion of the Cove Note will be subject to adjustment from time-to-time in the event of any combination, extraordinary distribution, dilutive issuance, or similar event. Upon the occurrence of an event of under the Cove Note, 125% of the amounts due under the Cove Note will become immediately due and payable. In addition, as long as the Company has any obligations outstanding under the Cove Note, the Company may not (among other things), without Cove Funding’s written consent, incur any senior or pari passu indebtedness, sell a significant amount of the Company’s assets, or issue equity securities in an amount than 10% of the Company’s outstanding Common Stock, subject to certain exceptions.
In order to further induce Cove Funding to make the Cove Loan to the Company, (a) the Company entered into the Cove Security Agreement with Cove Funding, pursuant to which Cove Funding was granted a first priority security interest in the Company’s assets, and (b) Paul Adler, the Company’s Chief Executive Officer, and a director of the Company, entered into the Cove Pledge Agreement with Cove Funding, pursuant to which Mr. Adler pledged the Adler Shares.
Current Business Operations
On July 15, 2025 the Company announced that it had pivoted to become a blockchain infrastructure business focused on cryptocurrency mining, digital asset treasury (DAT) management, and related blockchain technology initiatives.
The Company purchased 10 ASIC miners consisting of Bitmain S21+ on July 17, 2025. Following the purchase of the initial batch of ASIC miners, the Company announced on July 22, 2025, that it had signed a hosting agreement with Simple Mining LLC to host its fleet of miners. As of July 30, 2025, all miners were plugged in and hashing at full capacity. To accurately represent its business shift and evolution into blockchain, the Company has updated its logo for a more enhanced identity. On August 25, 2025, the Company unveiled its innovative crypto-forward website leading the way in digital Web 3.0
Cryptocurrency Mining Facility
The Company currently mines out of Cedar Falls, Iowa, with 2.5 petahash processing power, which is equivalent to 2.5 quadrillion hashes per second, and plans to develop a 5-megawatt (MW) Bitcoin mining facility, with a proposed location in Iowa, due to the availability of relatively low-cost electricity and environmental conditions favorable for equipment cooling. As of the date of this filing, the Company has started a dialogue with our current partner, Simple Mining LLC, about identifying, securing, and negotiating for a site development and pro forma costs for our own facility. The Company is evaluating potential locations and related financial feasibility before committing to procurement or construction activities.
The planned facility would be custom-designed with ventilation and cooling systems to support mining hardware performance and longevity, and would connect to the local power grid as its primary electricity source. The Company intends to use Application-Specific Integrated Circuit (ASIC) miners, with hybrid diversification of Bitmain S21+ and other models, along with Bitmain L9 for arbitrage and higher profitability, designed to mine cryptocurrencies using the SHA-256 algorithm and Scrypt miners, such as Bitcoin.
Each ASIC S21+ miner consumes approximately 3,877 watts at full capacity. Ten units would consume roughly 1292 kilowatt-hours per day. Based on an average industrial electricity rate of $0.07 per kilowatt-hour in Iowa, estimated operating costs for ten miners would be approximately $56.60 per day, or $1,698 per month.
The Company’s internal estimates suggest that, under current Bitcoin prices, electricity rates, and depreciation assumptions, each Antminer S21+ miner could generate approximately $6.75 in net daily earnings, with a projected investment break-even period of 1.5 years. These estimates are based on assumptions that may not prove accurate, and there is no assurance that the operation will achieve break-even or any profitability.
The Company purchased additional 10 ASICs consisting of Bitmain L9 Scrypt Miners on November 19 th , 2025, to round up its hybrid fleet to 20 ASICs.
Digital Asset Treasury
The Company announced plans to establish layered digital asset treasury targeting Bitcoin, Ethereum and AAVE as a long-term reserve assets. At the foundation of this model will be Bitcoin (BTC), established as the Company’s long-term reserve asset. Complementing Bitcoin, Ethereum (ETH) will be staked to generate stable yields, while Aave (AAVE), a leading decentralized finance (DeFi) protocol, will provide additional returns through staking and lending.
Headquartered in Island Park, NY, NetBrands Corp (OTCID: NBND) operates through diversified subsidiaries with the company rapidly growing its industrial-scale crypto mining operations through procurement of next-generation mining equipment and seeks M&A and JV opportunities in the blockchain sector, particularly within the digital and Web 3.0 verticals. The company is strategically expanding its reach, with a strong emphasis on the rapidly growing Web 3.0 segment.
Our Strategy and Strengths -
On July 15 th the Company announced its transition into a blockchain infrastructure business focused on cryptocurrency mining, digital asset treasury (DAT) management, and related blockchain technology initiatives.
Shortly thereafter, on July 17, the Company purchased ten next-generation ASIC miners, consisting of Bitmain S21+ units. Building on this initial deployment, the Company announced on July 22 that it had entered into a hosting agreement with Simple Mining LLC to host and operate its mining fleet. By July 30, all miners were fully deployed and hashing at full capacity, delivering a total of 2.35 petahash with an average efficiency of 16.5 J/TH.
To accurately reflect its strategic evolution into blockchain infrastructure, the Company also refreshed its brand identity with an updated logo. On August 25, it unveiled a new, crypto-forward website designed to align with Web 3.0 standards and showcase its long-term vision in the digital asset space.
As part of its continued expansion, the Company engaged Nico Smid, founder of Digital Mining Solutions, as a strategic advisor to help guide and strengthen its Bitcoin mining strategy. Nico brings over 15 years of international business experience. Since entering the digital asset space in 2017, he has evolved from a private investor to an active miner and a strategic advisor, building expertise across the full mining value chain. As a recognized Key Opinion Leader in Bitcoin mining, Nico provides market intelligence to more than 16,000 newsletter subscribers and a broad social media audience. He is also a regular speaker at major industry events, including appearances at Bitcoin 2025 in Las Vegas and Bitcoin Amsterdam.
Following this appointment, Zachary Smith was added in an additional advisory role to support the Company’s initiatives in decentralized finance (DeFi) and real-world asset (RWA) tokenization. The Company is currently evaluating opportunities to tokenize assets across the mining stack, ranging from hashrate to physical mining equipment.
Most recently, the Company expanded its mining fleet with the acquisition of 10_ Bitmain L9 16G machines. These units utilize merged mining and are designed to capture higher arbitrage opportunities. By leveraging the NiceHash platform, the hashrate from these altcoin miners is sold at a premium, with NetBrands receiving rewards in Bitcoin. This deployment aligns with the Company’s stated objective of building a hybrid mining fleet to diversify revenue streams and grow its digital asset balance sheet.
Bitcoin Mining Unit and Infrastructure Development
The Company currently operates its mining activities in Cedar Falls, Iowa, with an installed capacity of approximately 2.35 petahash per second (PH/s). Building on this foundation, the Company is planning the development of a dedicated 5-megawatt (MW) Bitcoin mining facility that could support approximately 1,200 mining machines, or up to 300 PH/s of aggregate hashrate. Iowa has been identified as a proposed location due to its relatively low-cost electricity and environmental conditions favorable for efficient equipment cooling.
As of the date of this press release, the Company has initiated discussions with its current hosting partner, Simple Mining LLC, regarding the identification, evaluation, and potential negotiation of a site for development, including preliminary pro forma cost assessments. The Company continues to evaluate potential locations and associated financial feasibility and has not yet committed to procurement or construction activities.
The planned facility would be purpose-built with optimized cooling systems designed to enhance mining hardware performance, efficiency, and operational longevity. The facility would be connected to the local power grid as its primary electricity source. The Company intends to deploy application-specific integrated circuit (ASIC) miners, utilizing a hybrid fleet strategy that includes Bitmain S21+ units for SHA-256 mining and Bitmain L9 units for Scrypt-based merged mining, allowing for revenue diversification and arbitrage opportunities.
Each Bitmain S21+ miner consumes approximately 3,877 watts at full capacity. Ten units would therefore consume approximately 930 kilowatt-hours per day. Based on an average industrial electricity rate of $0.07 per kilowatt-hour in Iowa, estimated electricity costs for operating ten miners would be approximately $65 per day, or approximately $1,950 per month.
Based on internal estimates and current assumptions regarding Bitcoin prices, network difficulty, electricity rates, and equipment depreciation, each Antminer S21+ could generate approximately $6.75 in net daily earnings, implying a projected break-even period of approximately 18 months. These estimates are forward-looking and subject to significant variability. There can be no assurance that the Company’s mining operations will achieve projected returns, break even, or be profitable.
Digital Asset Treasury
The Company announced plans to establish a layered digital asset treasury targeting Bitcoin, Ethereum, and AAVE as long-term reserve assets. At the foundation of this model will be Bitcoin (BTC), established as the Company’s long-term reserve asset. Complementing Bitcoin, Ethereum (ETH) will be staked to generate stable yields, while AAVE (AAVE), a leading decentralized finance (DeFi) protocol, will provide additional returns through staking and lending.
This layered approach ensures that yield generated from ETH and AAVE feeds directly back into Bitcoin reserves, steadily compounding the Company’s BTC balance sheet over time. Investors will gain exposure to both the stability of Bitcoin and the cash flow benefits of DeFi yield. NetBrands plans to establish this diversified treasury framework initially starting with $10 million, and is designed with an incremental goal to reach a scale target of $100 million over time. The company may utilize various financing tools to complete digital asset acquisitions in a phased approach. In parallel, our focus is on scaling a lean and high-efficiency Bitcoin mining operation. A maximum amount of mined Bitcoin will be retained on our balance sheet, continuously growing our reserves of the world’s most pristine digital asset. By adopting Bitcoin as our foundation, we ensure growth rests on its long-term appreciation potential.
Competition
We operate in a highly competitive industry with a growing number and scale of participants. Our bitcoin self-mining operations compete with mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin. We compete on the basis of our total number of miners, the degree of mining difficulty, the efficiency of our mining operations, the competitiveness of our energy costs, and the fiat value of the mining reward.
We compete in the Bitcoin mining industry against a large set of operators worldwide. The competitive landscape includes roughly 30 publicly traded mining companies making up approximately 40% of the market, as well as numerous private miners and hosting providers globally. While mining is geographically distributed, a meaningful portion of industrial-scale capacity and public-market miners is concentrated in the United States (~38%) due to relatively deep capital markets, established infrastructure, and access to large power markets; however, substantial competition also exists in Canada, Latin America, the Nordics, the Middle East, and parts of Asia. Bitcoin miners compete by (i) securing low-cost power, (ii) site development, (iii) fleet scale, efficiency, uptime, and operational expertise, (iv) ASIC sourcing terms, (v) balance sheet flexibility to withstand periods of low margins, and (vi) the ability to monetize demand response or monetize waste heat. In addition, certain ASIC manufacturers and large infrastructure owners engage in self-mining, which can intensify competition for machines, hosting capacity, and energy.
Miners of bitcoin historically ranged from individual enthusiasts and entrepreneurs to large public company mining operations. The vast majority of mining is now undertaken and further trending towards large-scale, industrial mining facilities. A mining pool is created when mining participants pool the processing power of their miners over a network and mine transactions together. Rewards are then distributed proportionately to the pool participants based on the work/hash power contributed to solving a block. Our self-mining operations also compete with non-digital asset operations for access to suitable real estate and access to affordable and dependable electric power. In addition to competing to solve new blocks, we compete to acquire new miners, to raise capital, to obtain access to facilities for the location of mining operations, and to develop or acquire new technologies.
A number of public companies (traded in the United States, Canada, and internationally), such as the following, may be considered competitors to us:
Applied Digital Corp.;
Argo Blockchain PLC;
Bitdeer Technologies Group;
Bit Digital, Inc.;
Bitfarms Technologies Ltd. (formerly Blockchain Mining Ltd);
Cipher Mining Inc.;
Cleanspark, Inc.;
Core Scientific, Inc.;
Greenidge Generation Holding Inc.;
Hive Blockchain Technologies Inc.;
Hut 8 Corp. (including the merged operations of U.S. Bitcoin Corp.);
Iris Energy Ltd.;
Marathon Digital Holdings, Inc.;
Mawson Infrastructure Group Inc.;
Riot Platforms, Inc.;
Stronghold Digital Mining, Inc.; and
TeraWulf Inc.
The bitcoin mining industry is a highly competitive and evolving industry and new competitors and/or emerging technologies could enter the market and affect our competitiveness in the future. Other market participants in the bitcoin mining industry include investors and speculators, retail users transacting in digital assets, and service companies that provide a variety of services, including buying, selling, payment processing, and storing of bitcoin. To continue to grow we will require sufficient additional capital to build additional facilities and to acquire new mining equipment and related infrastructure. Subject to raising additional capital, our bitcoin initiatives will compete with other industry participants that focus on investing in and securing the blockchains of bitcoin and other digital assets.
Discussion of the Years Ended 2025 and 2024
Revenues and Cost of Sales
Sales for the year ended December 31, 2025 were $18,265 compared to sales of $-0- for the year ended December 31, 2024, an increase of $18,265, or 100%.
We have strategically repositioned the Company to become a blockchain infrastructure business focused on cryptocurrency mining, digital asset treasury (DAT) management, and related blockchain technology initiatives.
Operating expenses
Operating expenses for the year ended December 31, 2025 were $583,047 compared to $789,089 during the same period ended December 31, 2024. The material decrease in expenses is attributable to limited expenses is due to our strategically repositioning the Company to become a blockchain infrastructure business focused on cryptocurrency mining, digital asset treasury (DAT) management, and related blockchain technology initiatives.
Other income and (expense)
Other income (expense) is comprised solely of interest expense and a loss on the extinguishment of debt related to our fundings. Other expense was $1,122,378 for the year ended December 31, 2025, compared to $487,217 in other expense during the year ended December 31, 2024.
Net loss
As a result of the foregoing, we recorded a net loss of $1,695,935 or $0.02 per share for year ended December 31, 2025, compared to a loss of $1,285,306 or $0.06 per share for the year ended December 31, 2024.
Liquidity and Capital Resources
As of December 31, 2025, we had cash of $4,297, as compared to $-0- as of December 31, 2024. Net cash used in operating activities for the year ended December 31, 2025, was $336,907, compared to $182,119 for the year ended December 31, 2024.
Cash flows used in investing activities was $87,560 for the year ended December 31, 2025 compared to $-0- for the year ended December 31, 2024.
Cash flows from financing activities was $428,764 for the year ended December 31, 2025, compared to $181,107 during the year ended December 31, 2024. The increase is primarily attributable to approximately $400,000 provided by notes payable we obtained during the year ended December 31, 2025.
Since our inception through December 31, 2025, we have funded our operations, principally with the issuance of equity and debt.
On April 10, 2023, Paul Adler, the President and a director of the Company, made a loan to the Company in the amount of $124,000, at an interest rate of 14.9% per annum. The principal amount of the loan, and any accrued and unpaid interest thereon, were due and payable on July 9. 2023, in cash or shares of the Company’s common stock, at Mr. Adler’s sole discretion. The due date of this loan has been extended to July 9, 2024. If repaid in shares of common stock, the number of shares to be issued to be calculated using the closing sale price of the Company’s common stock on the OTC Pink marketplace on the payment date. As of April 8, 2024, Mr. Adler had advanced an additional $54,728 to the Company on the same terms.
On June 6, 2023, in connection with entering into the 1800 Purchase Agreement with 1800 Diagonal, and the issuance of the Note to 1800 Diagonal, the Company received the net proceeds of $100,000. The Company used the net proceeds for working capital and general corporate purposes.
On March 22, 2024, in connection with entering into the Cove Purchase Agreement with Cove Funding, and the issuance of the Cove Note to Cove Funding, the Company received net proceeds of $150,000 from the Cove Loan. The Company plans to use the net proceeds for working capital and general corporate purposes.
Seasonality
The Company’s business is not subject to seasonality.
Off-Balance Sheet Arrangements.
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Going Concern
There is substantial doubt about the Company continuing as a going concern based on the Company’s accumulated deficit and accrued liabilities. For the period ended December 31, 2025, the Company had a net loss of $32,932,903 and had a stockholder’s deficit of $2,413,239.
The consolidated financials have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. If the Company is in fact unable to continue as a going concern, the shareholders may lose some or all of their investment in the Company.
