NAKA

Business Context and Reporting Period

Company: Kindly MD, Inc. (NAKA)

Reporting Period: Quarter ended June 30, 2025 (Q2 2025)

Business Overview: Kindly MD operates as a patient-first healthcare company focusing on value-based care, opioid reduction, and alternative medicine. In May 2025, the Company announced a strategic pivot to a Bitcoin treasury strategy via a proposed merger with Nakamoto Holdings Inc. The Company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Net revenues decreased 36.1% QoQ and 32.7% YTD compared to 2024. This is attributed to the closing of the Bountiful location and a shift in pricing for cash-pay services, despite a 153.1% increase in insurance reimbursements.
• Expense Surge: Operating expenses increased 67.0% QoQ. Salaries and wages rose 106.4% due to stock-based compensation and expanded operations. General and administrative expenses increased 152.6% due to legal fees, investor relations, and D&O insurance costs associated with being a public company.
• Bitcoin Strategy: The Company initiated a Bitcoin treasury strategy in May 2025, purchasing 21 BTC for $2.29 million. This resulted in an unrealized loss of $39,019 for the quarter due to market fluctuations.
• Debt Reduction: Interest expense dropped 98.8% QoQ as the Company repaid prior notes payable and extinguished related derivative liabilities.
• Liquidity Improvement: Cash balances increased from $2.27 million to $6.02 million, primarily driven by $9.22 million in proceeds from warrant exercises.

Guidance, Outlook, and Material Events

Merger with Nakamoto Holdings Inc.: On May 12, 2025, Kindly MD entered into a merger agreement to acquire Nakamoto Holdings Inc., a Bitcoin-native holding company. The transaction includes:

• Share Issuance: Nakamoto shareholders will receive 22.3 million shares of Kindly MD common stock.
• PIPE Financing: Agreements secured approximately $563.2 million in total private investment (Initial PIPE of ~$511.7M and Additional PIPE of ~$51.5M).
• Debt Financing: A $200 million secured convertible debenture agreement with YA II PN, Ltd.
• Shareholder Approval: Stockholders approved the merger and related proposals via written consent in May and June 2025.

Risks and Contingencies:

• Merger Termination: The agreement includes termination rights if the merger is not consummated by November 14, 2025, or if certain conditions fail. Termination fees of $2.5 million may apply to either party.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting.
• Advisory Fees: The Company has obligations to pay advisory fees totaling $450,000 to a financial firm, with a portion contingent on the merger closing.

Investor Verification Checklist

• Merger Closing Status: Verify the final closing date and conditions for the Nakamoto Holdings merger, specifically the November 14, 2025 deadline.
• Capital Raise Execution: Confirm the receipt of funds from the $563.2 million PIPE financing and the $200 million convertible debenture.
• Bitcoin Holdings: Monitor the valuation and custody of the 21 BTC held, noting the volatility impact on earnings.
• Internal Control Remediation: Review the Company's plan to address the material weaknesses in internal controls identified in Item 4.
• Revenue Mix: Assess the sustainability of the shift from cash-pay to insurance reimbursement models following the closure of the Bountiful location.