GPUS-PD

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How GPUS-PD rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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As of December 31, 2025, we had federal and state net operating loss carryforwards (“NOLs”) for income tax purposes of approximately $300.8 million and $342.2 million, respectively, after application of the limitations set forth in Section 382 of the Internal Revenue Code.
Until we are profitable, we will need to raise additional capital in order to fund our operations in furtherance of our business plan.
In addition, certain Guarantors entered into various agreements as collateral in support of the guarantee of the Secured Notes, including (i) a security agreement by Sentinum, pursuant to which Sentinum granted to the Lenders a security interest in (a) the Miners, (b) all of the digital currency mined or otherwise generated from the Miners and (c) the membership interests of ACS, (ii) a security agreement by the Company, Ault Lending, BNI Montana and AGREE, pursuant to which those entities granted to the lenders a security interest in substantially all of their assets, as well as a pledge of equity interests in Ault Aviation, AGREE, Sentinum, Ault Energy, Eco Pack Technologies Limited, and Circle 8 Holdco, (iii) a future advance mortgage by ACS on the Michigan Property, (iv) an aircraft mortgage and security agreement by Ault Aviation on the Aircraft, and (v) deposit account control agreements over certain bank accounts held by certain of our subsidiaries.
Further, on December 2, 2025 we, along with its direct and indirect wholly owned subsidiaries Sentinum and ACS (with Sentinum, the “Guarantors”), entered into a Note Purchase Agreement (the “Agreement” and with the Loan Agreement, the Agreements”) with JGB Capital, LP, JGB Partners, LP and JGB Capital Offshore Ltd.
(the “Lenders”) as well as JGB Collateral, LLC (the “Agent”).
Pursuant to the Agreement, we borrowed $12.8 million from the Investors and issued secured convertible promissory notes to the Investors in such aggregate amount, which includes an original issue discount of $0.8 million (collectively, the “Convertible Notes”).
In connection with the Agreement, we, the Agent and a custodian entered into an Account Control Agreement which governs the terms of a crypto asset account established by the foregoing parties.
We have deposited Bitcoin having a U.S. dollar value of $16.0 million therein as collateral for the loans made to the Company under the Agreement and evidenced by the Convertible Notes.
The covenants and other restrictions contained in the Agreements and other current or future debt agreements could, among other things, restrict our ability to dispose of assets, incur additional indebtedness, pay dividends or make other restricted payments, create liens on assets, make investments, loans or advances, make acquisitions, engage in mergers or consolidations and engage in certain transactions with affiliates.
A failure to comply with any restrictions or covenants in the Agreements, or to make payments into the Segregated Account when due or make other payments we are obligated to make under Loan Agreement, could have serious consequences to our financial condition or result in a default under the Agreements and under other agreements containing cross-default provisions.
While Circle 8 has reduced the amount of outstanding debt from 2024 to 2025, as of December 31, 2025, it still had total outstanding indebtedness of approximately $9.4 million, of which $7.2 million was borrowed from First Citizens Bank (“FCB”) in a senior secured asset-based revolving line of credit, $1.2 million consists of outstanding equipment notes with Flagstar Financial & Leasing (“FFL”), $0.4 million consists of outstanding equipment notes with Manitowoc Finance (“MANF”) and $0.6 million of outstanding vehicle notes with Ford Motor Credit (“FMC”).
In addition, Circle 8 has the ability to increase the FCB loan, which availability was $12.8 million as of December 31, 2025.
If Circle 8 has insufficient capital to cover its debt obligations, it may be forced to reduce or delay ongoing or growth activities and capital expenditures, sell assets, obtain additional debt or dilutive equity capital or restructure or refinance all or a portion of its debt, including the incumbent FCB, MANF, FFL and FMC loans, and any other incremental loans, on or before maturity.
In addition, fluctuations in commodity prices could impact the cost of raw materials needed to manufacture lifting assets, potentially affecting Circle 8’s profitability.
Furthermore, as Circle 8 expands its operations, it may need to rely on suppliers and logistics partners in new geographic regions, which could expose Circle 8 to additional supply chain risks.
Circle 8’s reliance on a limited number of equipment manufacturers exposes Circle 8 to significant risks, as the termination or disruption of relationships with any of these manufacturers could adversely impact Circle 8’s ability to obtain equipment in a timely or adequate manner, potentially leading to operational disruptions and financial losses.
Circle 8 purchases most of its equipment from leading, nationally recognized OEMs.
For the year ended December 31, 2025, Circle 8 acquired two Manitowoc/Grove cranes and one Liebherr crane, a top-tier heavy equipment manufacturer based in Germany.
Historically, Circle 8 has sourced the majority of its fleet from Manitowoc/Grove, a leading worldwide crane manufacturer.
Utilizing a primary OEM has reduced the number of parts and inventory items required to be kept on hand, resulting in operational efficiencies and allowing for timely maintenance and repairs.
Going forward, Circle 8 intends to continue utilizing Manitowoc/Grove for crane models that align with its core operating needs, while selectively expanding its fleet with higher-capacity Liebherr cranes, particularly in classes exceeding 350 tons.
While introducing an additional OEM enhances fleet capability and capacity, it may require incremental investment in parts inventory and technician training and could create supply chain dependencies that may adversely affect the business, financial condition or results of operations if such manufacturers are unable to supply equipment or components in a timely manner.
The U.S. has experienced significantly heightened inflationary pressures over the last several years.
For example, rising interest rates in recent years, higher than expected inflation, and several bank failures underscore the potential impact of ongoing economic risks to Circle 8’s operations and financial performance.
It can be expected that Circle 8’s quarterly results will continue to fluctuate in the future due to a number of factors, including the following: · general economic conditions in the markets in which Circle 8 operates; · the cyclical nature of Circle 8’s customers’ business, particularly Circle 8’s oil services customer and prospective customers in the construction industry; · sales patterns in general in the construction industry, with sales activity tending to be lower in the winter months, which causes significant volatility in utilization; · changes in the size of Circle 8’s fleet due to rapid growth followed by a slow-down and Circle 8’s ability to service and maintain its fleet in a timely manner; · an overcapacity of fleet in the crane services industry; · severe weather and seismic conditions temporarily affecting the regions in which Circle 8 operates; · supply chain or other disruptions that impact its ability to obtain equipment and other supplies from key suppliers on acceptable terms or at all; · changes in corporate spending for plants and facilities or changes in government spending for infrastructure projects; · changes in interest rates and related changes in Circle 8’s interest expense and debt service obligations; or · the possible need, from time to time, to record impairment charges or other write-offs or charges due to a variety of occurrences, such as the impairment of assets, existing location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurings, or the refinancing of existing indebtedness.
The market value of used rental equipment depends on several factors, including: · general economic conditions in the markets in which Circle 8 operates; · wear and tear on the equipment relative to its age; · the time of year that it is sold (prices are generally higher during the busy season); · worldwide and domestic demands for used equipment; · the supply of used equipment on the market; and · general economic conditions.
Then, in 2024, Circle 8 slightly increased its fleet size by adding two additional cranes, bringing the total to 57 cranes.
However, in 2025, Circle 8 disposed of approximately 10 underutilized and maintenance-intensive cranes.
As a result of the condition of the cranes, the aggregate sale price was less than the carrying book value of the cranes, resulting in a loss.
While recent equipment sales have generally remained favorable, there can be no assurance that used equipment selling prices will not decline in the future.
Circle 8’s operating performance depends on maintaining a reliable, safe and competitive crane fleet.
As equipment ages, maintenance costs may increase and downtime risks may rise, potentially affecting equipment utilization and operating margins.
As of the date of this Annual Report, Circle 8’s fleet has an average age of approximately 10 years, which is an increase from approximately nine years as of the date of our prior annual report.
When properly maintained, mobile hydraulic and all-terrain cranes can typically remain in productive service for at least 20 years.
For example, the cost of acquiring new cranes has increased in recent years due to inflation, higher steel prices, supply chain disruptions, tariffs on imported equipment and fluctuations in foreign exchange markets.
Many mobile cranes used in the United States are manufactured in Europe, particularly in Germany, and tariffs and the strength of the Euro relative to the U.S. dollar may increase the cost of acquiring new equipment and replacement components.
As of December 31, 2025, Circle 8 had approximately 117 employees in Texas, Louisiana and Oklahoma, none of whom is unionized.
Risks Related to Our Bitcoin Operations Risks Related to Our Bitcoin Strategy and Holdings Our Bitcoin strategy exposes us to various risks, including risks associated with Bitcoin.
Our Bitcoin digital asset treasury strategy, or DAT, exposes us to various risks, including the following: Bitcoin is a highly volatile asset.
Bitcoin is a highly volatile asset that has traded below $61,000 per Bitcoin and above $126,000 per Bitcoin in the 12 months preceding the date of this Annual Report.

and 996 more.

Gone since FY2024

As of December 31, 2024, we had federal and state net operating loss carryforwards (“NOLs”) for income tax purposes of approximately $134.4 million and $204.9 million, respectively, after application of the limitations set forth in Section 382 of the Internal Revenue Code.
Until we are profitable, we will need to quickly raise additional capital in order to fund our operations in furtherance of our business plan.
In addition, certain Guarantors entered into various agreements as collateral in support of the guarantee of the Secured Notes, including (i) a security agreement by Sentinum, pursuant to which Sentinum granted to the Lenders a security interest in (a) the Miners, (b) all of the digital currency mined or otherwise generated from the Miners and (c) the membership interests of ACS, (ii) a security agreement by the Company, Ault Lending, BNI Montana and AGREE, pursuant to which those entities granted to the lenders a security interest in substantially all of their assets, as well as a pledge of equity interests in Ault Aviation, AGREE, Sentinum, Ault Energy, Eco Pack, and Circle 8 Holdco, (iii) a future advance mortgage by ACS on the Michigan Property, (iv) an aircraft mortgage and security agreement by Ault Aviation on the Aircraft, and (v) deposit account control agreements over certain bank accounts held by certain of our subsidiaries.
The covenants and other restrictions contained in the Loan Agreement and other current or future debt agreements could, among other things, restrict our ability to dispose of assets, incur additional indebtedness, pay dividends or make other restricted payments, create liens on assets, make investments, loans or advances, make acquisitions, engage in mergers or consolidations and engage in certain transactions with affiliates.
A failure to comply with any restrictions or covenants in the Loan Agreement, or to make payments into the Segregated Account when due or make other payments we are obligated to make under Loan Agreement, could have serious consequences to our financial condition or result in a default under the Loan Agreement and under other agreements containing cross-default provisions.
Circle 8 currently has a substantial amount of outstanding debt.
As of December 31, 2024, it had total outstanding indebtedness of approximately $16.6 million, of which $13.1 million was borrowed from First Citizens Bank (“FCB”) in a senior secured asset-based revolving line of credit, $1.9 million consists of outstanding equipment notes with Manitowoc Finance (“MANF”) and SQN Capital Management, LLC (“SQN), $.9 million of outstanding vehicle notes with Ford Motor Credit (“FMC”) and a $.6 million short term unsecured note with Meridian Finance LLC.
Circle 8 has the ability to increase the FCB loan by $7.4 million as of December 31, 2024.
If Circle 8 has insufficient capital to cover its debt obligations, it may be forced to reduce or delay ongoing or growth activities and capital expenditures, sell assets, obtain additional debt or dilutive equity capital or restructure or refinance all or a portion of its debt, including the incumbent FCB, MANF,SQN and FMC loans, and any other incremental loans, on or before maturity.
In addition, fluctuations in commodity prices could impact the cost of raw materials needed to manufacture lifting assets, potentially affecting the company’s profitability.
Furthermore, as Circle 8 expands its operations, it may need to rely on suppliers and logistics partners in new geographic regions, which could expose the company to additional supply chain risks.
Circle 8’s reliance on a limited number of equipment manufacturers exposes the company to significant risks, as the termination or disruption of relationships with any of these manufacturers could adversely impact Circle 8’s ability to obtain equipment in a timely or adequate manner, potentially leading to operational disruptions and financial losses.
Circle 8 purchases most of its equipment from a leading, nationally recognized OEM.
For the year ended December 31, 2024, the company acquired two new cranes pursuant to leases with an option to purchase.
Prior thereto, it purchased 100% of its equipment from Manitowoc/Grove, one of the leading worldwide heavy equipment manufacturers.
Utilizing one OEM reduces the number of parts and inventory items kept on hand resulting in savings, while still allowing for efficient and timely repairs and maintenance of Circle 8’s cranes.
Circle 8 may diversify its equipment supplier options going forward to diversify its fleet somewhat.
Utilizing a new OEM equipment manufacturer creates risk from requiring an increase in parts inventory and could have an adverse effect on the business, financial condition or results of operations if the new OEM were unable to supply Circle 8 in an adequate or timely manner.
In 2022 and 2023, the U.S. experienced significantly heightened inflationary pressures which have continued into 2025.
For example, the economic uncertainty caused by COVID-19, and its impact on Circle 8’s operational and financial performance was highly dependent on the depth and duration of the pandemic, as well as the government-mandated restrictions on economic activity and government economic stimulus packages passed in response to the economic downturn.
More recently, rising interest rates, higher than expected inflation, and several bank failures also underscore the potential impact of ongoing economic risks to Circle 8’s operations and financial performance.
It can be expected that Circle 8’s quarterly results will continue to fluctuate in the future due to a number of factors, including the following: · general economic conditions in the markets in which the company operates; · the cyclical nature of Circle 8’s customers’ business, particularly Circle 8’s oil services customer and prospective customers in the construction industry; · sales patterns in general in the construction industry, with sales activity tending to be lower in the winter months, which causes significant volatility in utilization; · changes in the size of Circle 8’s fleet due to rapid growth followed by a slow-down and Circle 8’s ability to service and maintain its fleet in a timely manner; · an overcapacity of fleet in the crane services industry; · severe weather and seismic conditions temporarily affecting the regions in which Circle 8 operates; · supply chain or other disruptions that impact its ability to obtain equipment and other supplies from key suppliers on acceptable terms or at all; · changes in corporate spending for plants and facilities or changes in government spending for infrastructure projects; · changes in interest rates and related changes in Circle 8’s interest expense and debt service obligations; or · the possible need, from time to time, to record impairment charges or other write-offs or charges due to a variety of occurrences, such as the impairment of assets, existing location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurings, or the refinancing of existing indebtedness.
The market value of used rental equipment depends on several factors, including: · general economic conditions in the markets in which the company operates; · wear and tear on the equipment relative to its age; · the time of year that it is sold (prices are generally higher during the busy season); · worldwide and domestic demands for used equipment; · the supply of used equipment on the market; and · general economic conditions.
However, in 2024, Circle 8 slightly increased its fleet size by adding two additional cranes, bringing the total to 57 cranes.
While recent equipment sales have remained favorable, there can be no assurance that used equipment selling prices will not decline in the future.
As of December 31, 2024, Circle 8 had approximately 132 employees in Texas, Louisiana and Oklahoma, none of whom is unionized.
Risks Related to Our Bitcoin Operations Risks Related to Our Bitcoin Operations – General Acceptance and/or widespread use of Bitcoin is uncertain.
Geopolitical crises, in particular major ones such as Russia’s invasion of Ukraine and the conflict between Israel and Hamas as well as its supporters, may motivate large-scale purchases of Bitcoin and other cryptocurrencies, which could increase the price of Bitcoin and other cryptocurrencies rapidly.
In addition, we expect to need to raise additional capital to fund our working capital requirements, expand our operations, pursue our growth strategy and to respond to competitive pressures or working capital requirements.
As of April 9, 2025, the largest 93 and 2,094 Bitcoin wallets held approximately 15% and 38%, respectively, of the Bitcoin in circulation.
Current interpretations require the regulation of Bitcoin under the Commodity Exchange Act by the Commodity Futures Trading Commission, and we may be required to register and comply with such regulations.
Current and future legislation, regulation by the Commodity Futures Trading Commission (the “CFTC”) and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoin and other cryptocurrencies are treated for classification and clearing purposes.
Bitcoin has been deemed to fall within the definition of a commodity, and we may be required to register and comply with additional regulation under the Commodity Exchange Act, including additional periodic report and disclosure standards and requirements.
The Office of Financial Assets Control of the U.S.
Department of Treasury (“OFAC”) requires us to comply with its sanction program and not conduct business with persons named on its list of specially designated nationals (“SDN”).
Since 2017, we have acquired the Michigan Facility, a majority interest in TurnOnGreen, the four hotel properties in and around Madison, Wisconsin, substantially all the assets and certain specified liabilities of Circle 8 Crane Service and a position in ROI that we consolidate as a VIE.
As of April 14, 2025, Ault & Company, of which Milton C.
(Todd) Ault, III is the chief executive officer, beneficially owned 34,832,482 shares of our common stock, consisting of (i) 8,249 shares of Class A Common Stock owned, (ii) 4,234,561 shares of Class B Common Stock that are convertible into 4,234,561 shares of Class A Common Stock and carries the voting power of 42,345,610 shares of Class A Common Stock, (iii) 29,561,308 shares of Class A Common Stock issuable upon conversion of Series C Convertible Preferred Stock that carry the voting power of 464,576 shares of Class A Common Stock, (iv) 567,578 shares of Class A Common Stock issuable upon conversion of Series G Convertible Preferred Stock that carry the voting power of 153,748 shares of Class A Common Stock and (v) 460,786 shares of Class A Common Stock underlying warrants that are either presently exercisable or exercisable within 60 days.
As of April 14, 2025, Ault & Company beneficially owns approximately 95.8% of our common stock and had the right to cast total votes of approximately 82.5% of all votes entitled to be cast at a stockholder meeting.
In addition, pursuant to the (i) November 2023 SPA, as amended, Ault & Company has the right to purchase up to an additional $25 million of Series C Convertible Preferred Stock and Series C Warrants and (ii) December 2024 SPA, Ault & Company has the right to purchase up to an additional $49.0 million of Series G Convertible Preferred Stock and Series G Warrants, which would further increase their beneficial ownership.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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