Nakamoto Inc. 10-Q Summary: Quarter Ended June 30, 2026
Business Context and Reporting Period
This Form 10-Q covers the fiscal quarter and six months ended June 30, 2026. Nakamoto Inc. (formerly KindlyMD) has completed its transformation from a healthcare company into a Bitcoin operating company. Key strategic developments during the period include:
- Acquisitions: Completed the acquisition of BTC Inc. (media/events) and UTXO Management GP, LLC (asset management) on February 20, 2026.
- Discontinued Operations: Shut down legacy healthcare operations on June 19, 2026; results are now reported as discontinued operations.
- Capital Structure: Effected a 1-for-40 reverse stock split on May 22, 2026. As of August 10, 2026, 17,894,943 shares of common stock were outstanding.
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
|---|---|---|
| Total Operating Revenues | $35,869 | $38,068 |
| Net Loss (Continuing Ops) | $(131,199) | $(368,920) |
| Net Loss (Total) | $(132,997) | $(371,773) |
| Cash and Cash Equivalents | $19,072 (End of Period) | $19,072 (End of Period) |
| Digital Assets (Bitcoin) | $261,714 (Fair Value) | $261,714 (Fair Value) |
| Total Debt (Notes Payable) | $164,704 | $164,704 |
| Goodwill Impairment | $105,176 | $105,176 |
| Loss on Change in Fair Value of Digital Assets | $48,711 | $151,196 |
Material Changes vs. Prior Period
Comparisons to the prior year (2025) are not directly comparable due to the strategic pivot from healthcare to Bitcoin operations and the reclassification of legacy healthcare results to discontinued operations.
- Revenue Growth: Operating revenue increased from $0 in continuing operations for the prior year periods to $35.9 million (Q2) and $38.1 million (YTD 2026), driven by the Bitcoin Conference and new media/advisory segments.
- Asset Composition: Total assets decreased from $730.6 million (Dec 31, 2025) to $422.5 million (June 30, 2026). This decline is primarily due to a $205.8 million decrease in digital assets (Bitcoin) fair value and the removal of the call option asset related to the BTC Inc acquisition upon closing.
- Debt Restructuring: On June 5, 2026, the company restructured its debt with Kraken, reducing the principal balance from $210.0 million to $165.0 million via a partial repayment funded by Bitcoin sales.
- Impairments: Recognized a $105.2 million goodwill impairment charge ($80.6 million for Media & Information Services; $24.6 million for Asset Management) due to declines in stock price and Bitcoin valuation.
Guidance, Outlook, and Risks
Management Commentary: Management highlights the successful integration of BTC Inc and UTXO, generating $22.6 million in revenue from the Bitcoin Conference. The company maintains an actively managed Bitcoin derivatives program, generating $10.4 million in net derivative revenue for the quarter.
Liquidity: The company holds approximately 662 unencumbered Bitcoin (valued at ~$38.7 million) and $19.1 million in cash. Management believes liquidity is sufficient for the next 12 months, though it is highly sensitive to Bitcoin price volatility.
Risks and Contingencies:
- Bitcoin Volatility: Significant exposure to Bitcoin price fluctuations impacts both asset valuation and collateral requirements for debt.
- Debt Covenants: The $165 million loan with Kraken is secured by 3,805 Bitcoin. A decline in Bitcoin price could trigger margin calls or forced liquidation.
- Listing Compliance: The company regained Nasdaq compliance following a reverse stock split but faces restrictions on future reverse splits if the bid price falls below $1.00 again within two years.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to a material weakness in internal control over financial reporting.
Investor Verification Checklist
- Collateral Ratios: Verify the current maintenance margin requirements for the $165 million Kraken loan against the current Bitcoin price to assess liquidation risk.
- Goodwill Valuation: Review the assumptions used in the goodwill impairment test (discount rates, revenue growth) for the Media and Asset Management segments.
- Discontinued Operations: Confirm the final costs associated with the shutdown of healthcare operations and any remaining liabilities.
- Derivative Exposure: Analyze the specific strike prices and expiration dates of the written call options (1,550 BTC) and purchased puts to understand upside/downside protection.
- Internal Controls: Monitor the remediation plan for the material weakness in internal controls over financial reporting.