UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
Forthe fiscal quarter ended
or
Forthe transition period from ________ to _________
CommissionFile Number:
(Exact name of Registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
(Addressof Principal Executive Office and Zip Code)
(Registrant’sTelephone Number, including Area Code)
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, 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 | |||
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ No
Thenumber of shares of the registrant’s common stock outstanding as of August 4, 2025 was .
KINDLYMD, INC.
2025QUARTERLY REPORT ON FORM 10-Q
TABLEOF CONTENTS
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PARTI. FINANCIAL INFORMATION
ITEM1. FINANCIAL STATEMENTS
KINDLYMD, INC.
UNAUDITEDCONDENSED FINANCIAL STATEMENTS
| 3 |
KINDLYMD, INC.
CONDENSEDBALANCE SHEETS
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Digital assets | ||||||||
| Property and equipment, net | ||||||||
| Capitalized software | ||||||||
| Operating lease right-of-use assets | ||||||||
| Security deposits | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Customer deposits | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Current portion of finance lease liabilities | ||||||||
| Current portion of notes payable, net | ||||||||
| Total Current Liabilities | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Finance lease liabilities, net of current portion | ||||||||
| TOTAL LIABILITIES | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred Stock, $ par value, shares authorized; issued and outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value, shares authorized; shares issued and outstanding as of June 30, 2025 and shares issued and shares outstanding as of December 31, 2024 | ||||||||
| Treasury stock, at cost; and shares as of June 30, 2025 and December 31, 2024, respectively | ( | ) | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
Theaccompanying notes are an integral part of these condensed financial statements.
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KINDLYMD, INC.
CONDENSEDSTATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Research and development | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Unrealized loss on digital assets | ( | ) | ( | ) | ||||||||||||
| Loss on disposal of property and equipment | ( | ) | ( | ) | ||||||||||||
| Loss on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| Gain on change in fair value of derivative liabilities | ||||||||||||||||
| Total Other Expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| LOSS PER COMMON SHARE – BASIC AND DILUTED | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED | ||||||||||||||||
Theaccompanying notes are an integral part of these condensed financial statements.
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KINDLYMD, INC.
CONDENSEDSTATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
| Common Stock | Treasury | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Stock | Capital | Deficit | Equity | |||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Treasury stock repurchased | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||
| Issuance of common stock for compensation | ||||||||||||||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||||||
| Issuance of common stock upon cashless exercise of warrants | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Retirement of treasury stock | - | ( | ) | ( | ) | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Common Stock | Treasury | Additional Paid-In | Accumulated | Total Stockholders’ Equity | ||||||||||||||||||||
| Shares | Amount | Stock | Capital | Deficit | (Deficit) | |||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Issuance of common stock and warrants in connection with a public offering | ||||||||||||||||||||||||
| Issuance of common stock upon settlement of notes payable in connection with a public offering | ||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Theaccompanying notes are an integral part of these condensed financial statements.
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KINDLYMD, INC.
CONDENSEDSTATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Issuance of common stock for compensation | ||||||||
| Issuance of common stock for services | ||||||||
| Depreciation expense | ||||||||
| Bad debt expense | ||||||||
| Unrealized loss on digital assets | ||||||||
| Loss on disposal of property and equipment | ||||||||
| Loss on extinguishment of debt | ||||||||
| Gain on change in fair value of derivative liabilities | ( | ) | ||||||
| Amortization of debt discounts | ||||||||
| Amortization of right-of-use assets | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Security deposits | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Customer deposits | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of digital assets | ( | ) | ||||||
| Purchases of property and equipment | ( | ) | ||||||
| Capitalized software additions | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net proceeds from issuance of notes payable | ||||||||
| Net proceeds from issuance of common stock and warrants in connection with a public offering | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Repurchase of treasury stock | ( | ) | ||||||
| Repayments of notes payable | ( | ) | ( | ) | ||||
| Repayments of finance lease liabilities | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | ||||||||
| CASH AND CASH EQUIVALENTS | ||||||||
| Beginning of the period | ||||||||
| End of the period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Retirement of treasury stock | $ | $ | ||||||
| Cashless exercise of warrants | $ | $ | ||||||
| Debt discounts on notes payable | $ | $ | ||||||
| Fair value of derivative liabilities recognized upon issuance of notes payable | $ | $ | ||||||
| Extinguishment of derivative liabilities upon settlement of notes payable | $ | $ | ||||||
| Financed purchases of property and equipment | $ | $ | ||||||
Theaccompanying notes are an integral part of these condensed financial statements.
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KINDLYMD, INC.
NOTESTO CONDENSED FINANCIAL STATEMENTS
JUNE30, 2025 (UNAUDITED)
NOTE1— BASIS OF PRESENTATION AND OTHER INFORMATION
Theaccompanying unaudited condensed financial statements of Kindly MD, Inc. (the “Company,” “KindlyMD,”“we,” “us,” or “our”) have been prepared in accordance with accounting principles generallyaccepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form10-Q of Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the“SEC”). These interim unaudited condensed financial statements should be read in conjunction with those auditedfinancial statements included in the Form 10-K, as filed with the Securities and Exchange Commission on March 28, 2025. In theopinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting of normal recurring accruals, have been made. Operating results for the three and six months ended June 30, 2025 are notnecessarily indicative of the results that may be expected for the entire year.
DigitalAssets
TheCompany accounts for its digital assets, which currently are comprised solely of bitcoin (“BTC”), as indefinite-lived intangibleassets in accordance with Accounting Standards Codification (“ASC”) Topic 350-60, “Intangibles—Goodwill andOther—Crypto Assets.” The Company has ownership of and control over its digital assets and may use third-party custodialservices to secure it. The Company’s digital assets are initially recorded at cost and are subsequently remeasured on the balancesheet at fair value.
TheCompany determines the fair value of its digital assets on a nonrecurring basis in accordance with ASC Topic 820, “Fair ValueMeasurement,” based on quoted prices on the active exchange that the Company has determined is its principal market for suchdigital assets (Level 1 inputs). The Company determines the cost basis of digital assets using the specific identification of each unitreceived. Realized and unrealized gains and losses from changes in the fair value of digital assets are recognized in the statement ofoperations. See Note 3 for additional information.
Reclassifications
Certainreclassifications within operating expenses have been made to the prior period’s financial statements to conform to the currentperiod financial statement presentation. There is no impact in total to the results of operations and cash flows in all periods presented.
RecentlyAdopted Accounting Pronouncements
InAugust 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognitionand Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributednet assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05is effective for all joint venture formations with a formation date on or after January 1, 2025. The Company adopted ASU 2023-05 on January1, 2025. The adoption of ASU 2023-05 did not have a material impact on the Company’s interim unaudited condensed financial statements.
InDecember 2023, the FASB issued ASU 2023-08, “Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accountingfor and Disclosure of Crypto Assets,” which requires certain crypto assets to be measured at fair value in the statement ofoperations, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period.ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. ASU 2023-08 is effectivefor annual periods beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08on January 1, 2025. The adoption of ASU 2023-08 did not have a material impact on the Company’s interim unaudited condensed financialstatements.
| 8 |
RecentlyIssued Accounting Pronouncements Not Yet Adopted
InDecember 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” whichenhances the transparency and decision usefulness of income tax disclosures by requiring (1) consistent categories and greater disaggregationof information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendmentsto improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025,with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Companyis currently evaluating the impact this standard will have on its financial statements.
InNovember 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense DisaggregationDisclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure ofspecific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in eachrelevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description ofthe amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amountof selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning afterDecember 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standardwill have on its financial statements.
TheCompany currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its interimunaudited condensed financial statements.
NOTE2—DISAGGREGATION OF REVENUES
TheCompany’s revenues are disaggregated based on revenue type, including (i) patient care services related to medical evaluation andtreatment, (ii) product retail sales, and (iii) service affiliate agreements.
TheCompany’s net revenues for the three and six months ended June 30, 2025 and 2024 are disaggregated as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Patient care services | $ | $ | $ | $ | ||||||||||||
| Product retail sales | ||||||||||||||||
| Service affiliate agreements | ||||||||||||||||
| Total net revenues | $ | $ | $ | $ | ||||||||||||
TheCompany earned $
NOTE3—DIGITAL ASSETS
Digitalassets consisted of the following at June 30, 2025:
| June 30, 2025 | ||||||||||||
| Digital assets held: | Units | Cost Basis | Fair Value | |||||||||
| BTC | $ | $ | ||||||||||
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Thefollowing table provides a roll-forward of digital assets measured at fair value on a recurring basis for the six months ended June 30,2025:
| Fair Value | ||||
| Balance as of December 31, 2024 | $ | |||
| Purchases of BTC | ||||
| Sales of BTC | ||||
| Change in fair value of BTC | ( | ) | ||
| Balance as of June 30, 2025 | $ | |||
Duringthe three and six months ended June 30, 2025, the Company recognized an unrealized loss from remeasurement of digital assets of $
NOTE4—PROPERTY AND EQUIPMENT
Propertyand equipment consisted of the following at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Furniture | ||||||||
| Computer software and equipment | ||||||||
| Medical equipment | ||||||||
| Total property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciationexpense for the three months ended June 30, 2025 and 2024, was $
NOTE5—CAPITALIZED SOFTWARE
Capitalizedsoftware consisted of the following at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||
| EDM software | $ | $ | ||||||
| Total capitalized software | ||||||||
| Less accumulated amortization | ||||||||
| Total capitalized software, net | $ | $ | ||||||
Capitalizedcosts for in-process internal-use software development primarily consist of direct and contracted labor and related expenses for developinginternal systems and tools, and cloud-based solutions, including the Company’s Enterprise Data Management (“EDM”) system.These costs are not amortized until it is available for its intended use.
Duringthe three and six months ended June 30, 2025, the Company capitalized software costs of $
NOTE6—LEASES
OperatingLeases
Thefollowing was included in the condensed balance sheets at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liabilities, current portion | ||||||||
| Operating lease liabilities, long-term | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term (years) | ||||||||
| Weighted-average discount rate | % | % | ||||||
| 10 |
Thecomponents of lease expense consisted of the following for the three and six months ended June 30, 2025 and 2024:
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease expense | $ | $ | $ | $ | ||||||||||||
| Variable lease expense | ||||||||||||||||
| Total lease expense | $ | $ | $ | $ | ||||||||||||
Cashpayments included in the measurement of our operating lease liabilities were $
Estimatedfuture minimum payments of operating leases for the next five years consists of the following as of June 30, 2025:
| Year Ending December 31, | Amount | |||
| 2025 (remaining) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | ||||
| Less: imputed interest | ( | ) | ||
| Total operating lease liabilities | $ | |||
FinanceLeases
Thefollowing was included in the condensed balance sheets at June 30, 2025, and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||
| Leased equipment (property and equipment) | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total leased equipment, net | $ | $ | ||||||
| Finance lease liabilities, current portion | ||||||||
| Finance lease liabilities, long-term | ||||||||
| Total finance lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term (years) | - | |||||||
| Weighted-average discount rate | % | % | ||||||
NOTE7—PROMISSORY NOTE
OnMay 11, 2025, the Company entered into a non-interest bearing promissory note with BTC, Inc. with a principal amount up to $
NOTE8—STOCKHOLDERS’ EQUITY
PreferredStock
Asof June 30, 2025 and December 31, 2024, the Company was authorized to issue preferred shares. As of June 30, 2025 and December31, 2024, the Company had preferred shares issued and outstanding.
CommonStock
Asof June 30, 2025 and December 31, 2024, the Company was authorized to issue common shares. As of June 30, 2025, the Companyhad common shares issued and outstanding. As of December 31, 2024, the Company had and common shares issuedand outstanding, respectively.
EffectiveApril 1, 2025, the Company issued shares of common stock for compensation to employees valued at $.
EffectiveApril 1, 2025, the Company issued an aggregate of shares of common stock for services valued at $
Duringthe six months ended June 30, 2025, the Company issued an aggregate of shares of common stock, with a fair value of $
OnMay 14, 2025, the Company issued an aggregate of shares of common stock, with a fair value $
PotentialCommon Stock Equivalents
Asof June 30, 2025, there were an aggregate of potential common share equivalents from stock options, restricted stock awards, and warrants excluded from the diluted loss pershare calculations as their effect is anti-dilutive.
TreasuryStock
Duringthe six months ended June 30, 2025, the Company repurchased shares in treasury at a cost of $
OnApril 22, 2025, the Company formally retired and cancelled the outstanding shares of treasury stock. The repurchase cost of $
| 11 |
StockOptions
The Company accounts for its stock-based compensation in accordance with the fair value recognition of ASC 718.
OnMay 12, 2025, the Company granted stock options to purchase an aggregate of shares of common stock to 15 employees, directors,and consultants. The stock options have exercise prices ranging from $ to $ per share, and vesting terms ranging from immediateto one year. The total estimated fair market value of these stock options of $, was calculated using the Black-Scholes pricingmodel.
OnMay 12, 2025, the Company granted stock options to purchase an aggregate of shares of common stock to three directors. The stockoptions have an exercise price of $ per share, and vest upon the closing of the merger between the Company and Nakamoto Holdings,Inc. (“Nakamoto”). See Note 10 for additional information. The total estimated fair market value of these stock options of$, was calculated using the Black-Scholes pricing model.
| Stock Options | Weighted-Average Exercise Price | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ( | ) | ||||||
| Outstanding at June 30, 2025 | $ | |||||||
| Exercisable at June 30, 2025 | $ | |||||||
During the three months ended June 30, 2025 and 2024, the Company recorded$
As of June 30, 2025, the remaining unrecognized compensation cost relatedto non-vested stock options is $. The outstanding stock options have a weighted-average remaining contractual life of yearsand a total intrinsic value of $.
RestrictedStock Awards
EffectiveMay 1, 2025, the Company granted an aggregate of shares of restricted stock to two individuals. The restricted stock vest upon the closing of the merger between the Company andNakamoto. The Company determined the grant date fair value of the restricted stock award to be $,based on the closing stock price on the grant date (intrinsic value method).
Restricted Stock Awards | Weighted-Average Grant Date Share Price | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ||||||||
| Outstanding at June 30, 2025 | $ | |||||||
Duringthe three and six months ended June 30, 2025, the Company recorded $ in stock-based compensation expense related to restrictedstock awards.
Asof June 30, 2025, the remaining unrecognized compensation cost related to non-vested restricted stock awards is $, which is expectedto be recognized over the remaining estimated vesting period of years. As of June 30, 2025, the outstanding restricted stock awardshave total intrinsic value of $.
Warrants
| Warrants | Weighted-Average Exercise Price | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Exercised | ( | ) | ( | ) | ||||
| Forfeited | ||||||||
| Outstanding at June 30, 2025 | $ | |||||||
| Exercisable at June 30, 2025 | $ | |||||||
As of June 30, 2025, the outstanding warrants havea weighted-average remaining contractual life of
| 12 |
NOTE 9—COMMITMENTS AND CONTINGENCIES
Advisory Agreement
On May 10, 2025, the Company enteredinto an advisory agreement with a financial advisory firm (the “Representative”), relating to advisory services previouslyprovided by the Representative, including work associated with the Company’s Initial Public Offering in 2024 and advisory supportin connection with other business transactions. Per the Agreement, the Company has an obligation to pay the Representative an advisoryfee totaling $
NOTE10—SUBSEQUENT EVENTS
Nakamoto Holdings Inc. Merger Agreement
OnMay 12, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company,the Company’s newly formed, wholly-owned subsidiary Kindly Holdco Corp., a Delaware corporation (“Merger Sub”),Nakamoto Holdings Inc., a Delaware corporation (“Merger Partner” or “Nakamoto”), and Wade Rivers, LLC, a Wyominglimited liability company (“Wade Rivers”).
Pursuantto the Merger Agreement, Merger Sub will be merged with and into Nakamoto, with Nakamoto surviving as a wholly owned subsidiary (the“Surviving Corporation”) of KindlyMD (the “Merger”). Upon consummation of the Merger on the terms and subjectto the conditions set forth in the Merger Agreement, the holders of Nakamoto Class A and Class B common stock (other than sharesheld in treasury or by dissenting stockholders) will receive an aggregate million shares of the outstanding common stock, parvalue $ per share (the “Company Common Stock”), based on a price per share of $. Shares of Merger Sub’s commonstock will be converted into shares of common stock of the Surviving Corporation. No fractional shares will be issued; instead, cashwill be paid in lieu of fractional shares.
Concurrentlywith the execution of the Merger Agreement, the Company entered into subscription agreements (collectively, the “Initial SubscriptionAgreements”) with certain investors (the “Initial Subscribers”) in an aggregate amount of approximately $
Additionally,on June 19, 2025, the Company subsequently entered into additional subscription agreements, (the “Additional SubscriptionAgreements” and, together with the Initial Subscription Agreements, the “Subscription Agreements”), with certain newand/or existing investors (the “Additional Subscribers” and, together with the Initial Subscribers, the “Subscribers”)in an aggregate amount of $
TheMerger Agreement and the transactions contemplated by the Merger Agreement, along with the PIPE Financing and the Debt Financing, arecollectively referred to herein as the “Transactions”. The board of directors of the Company (the “Board”) onMay 12, 2025, has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement,including the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) determined that the PIPE Financingand the Debt Financing are fair to and in the best interests of the Company and its stockholders (iii) approved and declared advisablethe Merger Agreement and the Transactions, including the Merger, (iii) authorized and approved the execution, delivery and performanceby the Company of the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement and the consummation of theTransactions, including the Merger, the PIPE Financing and the Debt Financing, upon the terms and subject to the conditions set forthin the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement, respectively, (iv) recommended the adoptionof the Merger Agreement by the stockholders of the Company, (v) recommended the adoption of the issuance of the Company Common Stockpursuant to the Subscription Agreements and Debenture Purchase Agreement by the stockholders of the Company and (vi) recommendedeach of the adoption of the Governance Proposal, The New Equity Incentive Plan Proposal, the Convertible Share Issuance Proposal andthe Marketing Agreement Share Issuance Proposal (each as defined herein). On May 18, 2025, holders of a majority of the issued andoutstanding shares of Company Common Stock delivered to the Company a written shareholder consent in connection with the Merger Agreement,in accordance with Section 16-10a-704 of the Utah Revised Business Corporations Act and the Company’s Amended and RestatedArticles of Incorporation and Amended and Restated Bylaws, to adopt and approve the following Proposals:
(1) TheMerger Proposal — to approve and adopt the Merger Agreement and the transactions contemplated thereby, pursuantto which Merger Sub will merge with and into Nakamoto, with Nakamoto continuing as the surviving entity and awholly-owned subsidiary of the Company (the “Merger Proposal”);
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(2)The PIPE Proposal — to approve and adopt the Subscription Agreements with the Subscribers in anaggregate amount of approximately $
(3)The Share Issuance Proposal — to approve and adopt the issuance of an aggregate of shares of Company Common Stock at a price per share of $ per share of Company Common Stock, of which22,321,143 shares of Company Common Stock will be issued to the stockholders of Nakamoto and
(4)The Governance Proposal — to approve and adopt (A) the Second Amended and Restated Articles ofIncorporation of the Company (the “Amended Articles”) to, among other things, (i) increase the number of authorizedshares of Company Common Stock to 10,000,000,000, (ii) classify the Board so that there are three classes of directors,designated as Class I, Class II, and Class III, with each class consisting, as nearly as may be practicable, ofone-third of the total members of the Board, with each class serving staggered 3-year terms, (iii) prohibit actionsby written consent of the shareholders of the Company, (iv) permit the Board to change the name of the Company in its solediscretion, and (v) provide that the sole and exclusive forum for certain actions relating to the Company shall be theUnited States District Court for the District of Utah and any Utah State court sitting in Salt Lake County, State of Utah ofthe United States of America and (B) the Second Amended and Restated Corporate Bylaws of the Company (the “AmendedBylaws”) to, among other things, (i) remove the provisions prohibiting classes of directors with staggered terms,(ii) state that directors will be elected to serve three-year terms, (iii) impose a minimum and maximum number ofdirectors who may serve on the Board, (iv) establish advance notice requirements relating to business to be brought before theannual meeting of the shareholders of the Company, including director nominees, (v) establish requirements relating to callingspecial meetings and the conduct at such special meetings by the shareholders of the Company, and (vi) prohibit actions bywritten consent of the shareholders of the Company (the “Governance Proposal”);
(5)The New Equity Incentive Plan Proposal — to approve and adopt the Company’s 2025 Equity IncentivePlan and the material terms thereunder (the “New Equity Incentive Plan”) that will be go into effect immediately priorto the closing of the Merger Agreement and related transactions to comply with Section 5635(c) of the Nasdaq Rules, whichrequires stockholder approval for the issuance of securities when a stock option or purchase plan is to be established, pursuant towhich stock may be acquired by officers, directors, employees, or consultants (the “New Equity Incentive PlanProposal”);
(6)The Convertible Debt Issuance Proposal — to approve and adopt the issuance of shares of Company CommonStock to YA II PN, Ltd., a Cayman Islands exempted limited company (the “Convert Investor”) pursuant to the termsof that certain Debenture Purchase Agreement, to comply with Nasdaq Rule 5635(d) (the “Convertible Debt IssuanceProposal”); and
(7)The Marketing Agreement Share Issuance Proposal — to approve and adopt the issuance of up to anaggregate of shares of Company Common Stock at a price per share of $ per share of Company Common Stock, inaccordance with the Master Marketing Services Agreement, dated May 12, 2025 (the “Marketing Agreement”) by andbetween Nakamoto and BTC, Inc., a Delaware corporation (“BTC Inc”), which will be assigned to and assumed by KindlyMDfrom Nakamoto at the closing of the Merger Agreement pursuant to the Assignment and Assumption Agreement with Novation by andbetween KindlyMD, Nakamoto, and BTC (the “Assignment Agreement”), to comply with Nasdaq Rules 5635(a), 5635(b), and5635(d) (the “Marketing Agreement Share Issuance Proposal”).
TheBoard on June 19, 2025, unanimously (i) determined that the Additional PIPE Financing is fair to and in the best interests of theCompany and its stockholders, (ii) approved and declared advisable the Additional PIPE Financing, (iii) authorized and approved the execution,delivery and performance by the Company of the Additional Subscription Agreements, upon the terms and subject to the conditions set forthin the Additional Subscription Agreements, and (iv) recommended the adoption of the issuance of the Company Common Stock pursuant tothe Additional Subscription Agreements. On June 19, 2025, holders of a majority of the issued and outstanding shares of CompanyCommon Stock delivered to the Company a written shareholder consent, in accordance with Section 16-10a-704 of the Utah Revised BusinessCorporations Act and the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, to adopt andapprove the following proposals (the “June Proposals”):
(1)The Additional PIPE Proposal — to approve and adopt the Additional Subscription Agreements with theAdditional Subscribers in an aggregate amount of approximately $
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(2)The Additional Share Issuance Proposal — to approve and adopt the issuance of an aggregate of shares of Company Common Stock at a price per share of $ per share of Company Common Stock to the AdditionalSubscribers to comply with: (A) Section 5635(a) of The Nasdaq Stock Market’s Listing Rules (the “Nasdaq Rules”);(B) Section 5635(b) of the Nasdaq Rules, as applicable ; and (C) Section 5635(d) of the Nasdaq Rules (the “Additional ShareIssuance Proposal”).
Theadoption of the May Proposals and approval of the Merger and related Transactions by the Company’s stockholders required the affirmativevote or consent by the holders of a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote thereon.On May 18, 2025, holders of approximately
Theadoption of the June Proposals and approval of the Additional PIPE Issuance and related transactions by the Company’s stockholdersrequired the affirmative vote or consent by the holders of a majority of the voting power of the outstanding shares of Company CommonStock entitled to vote thereon. On June 19, 2025, stockholders which collectively on June 19, 2025 held of record and beneficiallyowned shares of Company Common Stock representing approximately
TheMerger Agreement contains certain termination rights for the parties, including (i) by mutual written consent; (ii) by either party ifthe Merger shall not have been consummated by November 14, 2025; (iii) by either party if a permanent injunction has been issued or otherlaw has been enacted prohibiting or making illegal the Merger; (iv) by either party if the required Kindly stockholder approval is notobtained within seven business days after signing; (v) by Kindly if (A) Nakamoto has breached its representations or covenants in a waythat causes a condition to closing to fail or, (B) if prior to receipt of Nakamoto stockholder approval, Nakamoto effected a Merger PartnerBoard Recommendation Change; (vi) by Nakamoto if (A) Kindly has breached its representations or covenants in a way that causes a conditionto closing to fail or, (B) if prior to receipt of Kindly stockholder approval, Kindly effected a Public Company Board RecommendationChange; (vii) by either party upon certain material breaches of the other party; (viii) by either party upon receipt of a Superior Proposalprior to receipt of the applicable stockholder approval and subject to certain obligations; and (ix) by Nakamoto if Kindly enters intobankruptcy, receivership or other similar proceedings. The Merger Agreement further provides that, upon termination of the Merger Agreementunder certain circumstances, Kindly may be required to pay Nakamoto a termination fee of $
OnJuly 22, 2025, the Company has filed a Notice of Stockholder Action by Written Consent and Information Statement on Schedule 14C (the“Information Statement”) with the Securities and Exchange Commission that contains more detailed information on the proposedMerger, the Merger Agreement and the Ancillary Agreements. The foregoing description of the Merger Agreement, as well as the InitialSubscription Agreements, Additional Subscription Agreements, Debenture Purchase Agreement, and other Ancillary Agreements, do not purportto be complete and are qualified in their entirety by reference to the full text of the agreements, copies of which are filed as Annexesto the Information Statement that has been mailed to all shareholders of record.
Amendedand Restated Engagement Agreement
OnJanuary 16, 2025, the Company entered into an Engagement Agreement (the “Agreement”) with an financial advisory firm (the“Representative”) to provide various advisory services in connection with the pending merger between the Company and Nakamoto.On May 11, 2025, the parties executed an amended and restated Engagement Agreement (the “Amended and Restated Agreement”).Pursuant to the terms of the Amended and Restated Agreement, the Company, in consideration for advisory services, will pay the Representativea fee (the “Advisory Fee”) of $
WarrantExercises
SinceMay 12, 2025 through the close of business on August 4, 2025, the Company has issued
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Thefollowing management’s discussion and analysis of financial condition and results of operations provides information that managementbelieves is relevant to an assessment and understanding of our plans and financial condition. The following financial information isderived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhereherein.
CautionaryNote Regarding Forward Looking Statements
Thisreport contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical factscontained in this report are forward-looking statements. The forward-looking statements in this report are only predictions. We havebased these forward-looking statements largely on our current expectations and projections about future events and financial trends thatwe believe may affect our business, financial condition and results of operations. In some cases, you can identify these forward-lookingstatements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,”“estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,”“predict,” “project,” “should,” “will,” “would” or the negative of thoseterms or other similar expressions, although not all forward-looking statements contain those words. We have based these forward-lookingstatements on our current expectations and projections about future events and trends that we believe may affect our financial condition,results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-lookingstatements include, but are not limited to, statements concerning the following:
| ● | Our ability to raise capital is necessary to sustain our anticipated operations and implement our business plan, | |
| ● | Our ability to implement our business plan, | |
| ● | Our ability to generate sufficient cash to survive, | |
| ● | The degree and nature of our competition, | |
| ● | The lack of diversification of our business plan, | |
| ● | Thegeneral volatility of the capital markets and the establishment of a market for our shares, | |
| ● | Disruption in the economic and financial conditions primarily from the impact of past terrorist attacks in the United States, threats of future attacks, police, and military activities overseas and other disruptive worldwide political and economic events and environmental weather conditions, and | |
| ● | Our ability to implement ourbitcoin treasury strategy and its effects on our business. |
Theseforward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “RiskFactors” included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 28, 2025.Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible forour management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, orcombination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may notoccur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Althoughwe believe that the expectations reflected in the forward-looking statements are reasonable and the information included in this reportis accurate, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in theforward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibilityfor the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-lookingstatements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.
Overview
Healthcare Operations
KindlyMDis a patient-first healthcare and healthcare data company redefining value-based care and patient-centered medical services. Formedin 2019, the Company leverages data analysis to deliver evidence-based, personalized solutions in order to reduce opioid use, improvehealth outcomes faster, and provide algorithmic guidance on the use of alternative medicine in healthcare.
Wecollect and analyze valuable data on alternative treatments as well as biopsychosocial factors to provide better health outcomes faster.This results in valuable data for patients, the company, and the company’s investors as we aim to become a leading source of evidence-basedassessment and treatment data in the fight for patients against the opioid epidemic and as we strive to be a leader in redefined value-basedcare.
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The Company’s unique value proposition is to provide a patient-focused healthcare experience that integrates traditional medicalevaluation and management with mental health integration and compliant alternative medicine education and inclusion. We focus oncreating personalized care plans for each individual that get people back to work and life faster, reduce opioid use, and have highpatient satisfaction. The Company believes these methods to be superior in managing the root cause of symptoms and improving healthoutcomes faster. The company’s competitive advantage lies in its integrated approach to health care services combined with adeep commitment to capturing and utilizing patient data to drive informed, evidence-based care decisions to achieve better healthoutcomes.
Itsspecialty outpatient clinical services are reimbursed by Medicare, Medicaid, and commercial insurance contracts as well as offered ona fee-for-service basis. The Company offers outpatient and telemedicine evaluation and management of, but not limited to pain, functionalmedicine, cognitive behavioral therapy, recovery support services, overdose education efforts, peer support, limited urgent care, preventativemedicine, medically managed weight loss, and hormone therapy.
The Companyproviders are experts in de-prescribing and using alternatives to opioids, such as medical cannabis, Ketamine infusion therapy, andother prescription and non-prescription alternatives.
The Companyis most successful when patients report positive health outcomes and high satisfaction as a result of our care.
Bitcoin Holdings
The Company also acquires and holds bitcoin that has been purchased with theproceeds of its warrant exercises. Since May 12, 2025, the Company has purchased 21 bitcoin.
The Company’s Bitcoin strategy will generallyinvolve, from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raisingtransactions with the objective of using the proceeds to purchase bitcoin and (ii) acquiring bitcoin with our liquid assets thatexceed working capital requirements. The Company intends to fund further bitcoin acquisitions primarily through issuances of common stockand a variety of fixed-income instruments, including debt, convertible notes and preferred stock.
The Company views its bitcoin holdings as long-term holdingsand expects to continue to accumulate bitcoin in the future. It has not set any specific target for the amount of bitcoin it seeks tohold and will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin.This overall strategy will also contemplate that the Company may (i) enter into additional capital raising transactions that arecollateralized by its bitcoin holdings, and (ii) consider pursuing strategies to create income streams or otherwise generate fundsusing its bitcoin holdings.
The Company’s additional operational focus on acquiring and holdingbitcoin and its new vision to adopt a Bitcoin treasury strategy began on May 12, 2025, through its proposed merger with Nakamoto HoldingsInc. (“Nakamoto”), a Bitcoin-native holding company.
RecentDevelopments
NakamotoHoldings, Inc. Merger Agreement
OnMay 12, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company,the Company’s newly formed, wholly-owned subsidiary Kindly Holdco Corp., a Delaware corporation (“Merger Sub”),Nakamoto Holdings Inc., a Delaware corporation (“Merger Partner” or “Nakamoto”), and Wade Rivers, LLC, a Wyominglimited liability company (“Wade Rivers”).
Pursuantto the Merger Agreement, Merger Sub will be merged with and into Nakamoto, with Nakamoto surviving as a wholly owned subsidiary (the“Surviving Corporation”) of KindlyMD (the “Merger”). Upon consummation of the Merger on the terms and subjectto the conditions set forth in the Merger Agreement, the holders of Nakamoto Class A and Class B common stock (other than sharesheld in treasury or by dissenting stockholders) will receive an aggregate 22.3 million shares of the outstanding common stock, parvalue $0.001 per share (the “Company Common Stock”), based on a price per share of $1.12. Shares of Merger Sub’s commonstock will be converted into shares of common stock of the Surviving Corporation. No fractional shares will be issued; instead, cashwill be paid in lieu of fractional shares.
Concurrentlywith the execution of the Merger Agreement, the Company entered into subscription agreements (collectively, the “Initial SubscriptionAgreements”) with certain investors (the “Initial Subscribers”) in an aggregate amount of approximately $511.7 million,pursuant to which the Company agreed to issue, and the Subscribers agreed to purchase, shares of Company Common Stock at a purchase priceof $1.12 per share and/or pre-funded warrants to purchase shares of Company Common Stock (the “Pre-Funded Warrants”),in a private placement (the “Initial PIPE Financing”). The PIPE Financing will be issued in a private placement in relianceupon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgatedthereunder. Additionally, the Company entered into a Secured Convertible Debenture Purchase Agreement (the “Debenture PurchaseAgreement”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors (the “Convert Investor”), underwhich the Company agreed to sell and issue to the Convert Investor a secured convertible debenture (the “Convertible Debenture”)in aggregate principal amount of $200.0 million (the “Principal Amount”) in exchange for cash or bitcoin equal to 96%of the Principal Amount (the “Debt Financing”). The Company expects to close the Debt Financing in connection with the Merger,subject to customary closing conditions. The Convertible Debenture will be issued in a private placement in reliance upon an exemptionfrom registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Additionally,on June 19, 2025, the Company subsequently entered into additional subscription agreements, (the “Additional SubscriptionAgreements” and, together with the Initial Subscription Agreements, the “Subscription Agreements”), with certain newand/or existing investors (the “Additional Subscribers” and, together with the Initial Subscribers, the “Subscribers”)in an aggregate amount of $51.5 million. Under these Additional Subscription Agreements, the Company agreed to issue and sell tothe Additional Subscribers shares of Company Common Stock at a purchase price of $5.00 per share in a private placement on substantiallysimilar terms as the Initial Subscription Agreements (the “Additional PIPE Financing” and, together with the Initial PIPEFinancing, the “PIPE Financings”). The Additional PIPE Financing will each be issued in a private placement in reliance uponan exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
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TheMerger Agreement and the transactions contemplated by the Merger Agreement, along with the PIPE Financing and the Debt Financing, arecollectively referred to herein as the “Transactions”. The board of directors of the Company (the “Board”) onMay 12, 2025, has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement,including the Merger, are fair to and in the best interests of the Company and its stockholders, (ii) determined that the PIPE Financingand the Debt Financing are fair to and in the best interests of the Company and its stockholders (iii) approved and declared advisablethe Merger Agreement and the Transactions, including the Merger, (iii) authorized and approved the execution, delivery and performanceby the Company of the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement and the consummation of theTransactions, including the Merger, the PIPE Financing and the Debt Financing, upon the terms and subject to the conditions set forthin the Merger Agreement, the Subscription Agreements and the Debenture Purchase Agreement, respectively, (iv) recommended the adoptionof the Merger Agreement by the stockholders of the Company, (v) recommended the adoption of the issuance of the Company Common Stockpursuant to the Subscription Agreements and Debenture Purchase Agreement by the stockholders of the Company and (vi) recommendedeach of the adoption of the Governance Proposal, The New Equity Incentive Plan Proposal, the Convertible Share Issuance Proposal andthe Marketing Agreement Share Issuance Proposal (each as defined herein). On May 18, 2025, holders of a majority of the issued andoutstanding shares of Company Common Stock delivered to the Company a written shareholder consent in connection with the Merger Agreement,in accordance with Section 16-10a-704 of the Utah Revised Business Corporations Act and the Company’s Amended and RestatedArticles of Incorporation and Amended and Restated Bylaws, to adopt and approve the following Proposals:
(1) TheMerger Proposal — to approve and adopt the Merger Agreement and the transactions contemplated thereby, pursuantto which Merger Sub will merge with and into Nakamoto, with Nakamoto continuing as the surviving entity and awholly-owned subsidiary of the Company (the “Merger Proposal”);
(2)The PIPE Proposal — to approve and adopt the Subscription Agreements with the Subscribers in anaggregate amount of approximately $511.7 million, pursuant to which the Company agreed to (A) issue, and such Subscribersagreed to purchase, shares of Company Common Stock at a purchase price of $1.12 per share and/or pre-funded warrants topurchase shares of Company Common Stock, in a private placement (the “PIPE Shares”) and (B) use commerciallyreasonable efforts to register the resale of PIPE Shares with the Securities and Exchange Commission (the “SEC”) within30 days after closing of the Merger Agreement, seek effectiveness as soon as practicable, and maintain effectiveness until theearlier of (i) the Subscribers no longer holding the PIPE Shares, (ii) all PIPE Shares being freely tradable, or(iii) three years from effectiveness (the “PIPE Proposal”);
(3)The Share Issuance Proposal — to approve and adopt the issuance of an aggregate of477,678,286 shares of Company Common Stock at a price per share of $1.12 per share of Company Common Stock, of which22,321,143 shares of Company Common Stock will be issued to the stockholders of Nakamoto and 455,357,143 shares of CompanyCommon Stock will be issued to the Subscribers to comply with: (A) Section 5635(a) of the Nasdaq Rules;(B) Section 5635(b) of the Nasdaq Rules; and (C) Section 5635(d) of the Nasdaq Rules (the “ShareIssuance Proposal”);
(4) TheGovernance Proposal — to approve and adopt (A) the Second Amended and Restated Articles of Incorporation ofthe Company (the “Amended Articles”) to, among other things, (i) increase the number of authorized shares ofCompany Common Stock to 10,000,000,000, (ii) classify the Board so that there are three classes of directors, designated asClass I, Class II, and Class III, with each class consisting, as nearly as may be practicable, of one-third ofthe total members of the Board, with each class serving staggered 3-year terms, (iii) prohibit actions by written consentof the shareholders of the Company, (iv) permit the Board to change the name of the Company in its sole discretion, and(v) provide that the sole and exclusive forum for certain actions relating to the Company shall be the United StatesDistrict Court for the District of Utah and any Utah State court sitting in Salt Lake County, State of Utah of theUnited States of America and (B) the Second Amended and Restated Corporate Bylaws of the Company (the “AmendedBylaws”) to, among other things, (i) remove the provisions prohibiting classes of directors with staggered terms,(ii) state that directors will be elected to serve three-year terms, (iii) impose a minimum and maximum number ofdirectors who may serve on the Board, (iv) establish advance notice requirements relating to business to be brought before theannual meeting of the shareholders of the Company, including director nominees, (v) establish requirements relating to callingspecial meetings and the conduct at such special meetings by the shareholders of the Company, and (vi) prohibit actions bywritten consent of the shareholders of the Company (the “Governance Proposal”);
(5) TheNew Equity Incentive Plan Proposal — to approve and adopt the Company’s 2025 Equity Incentive Plan and thematerial terms thereunder (the “New Equity Incentive Plan”) that will be go into effect immediately prior to the closingof the Merger Agreement and related transactions to comply with Section 5635(c) of the Nasdaq Rules, which requiresstockholder approval for the issuance of securities when a stock option or purchase plan is to be established, pursuant to whichstock may be acquired by officers, directors, employees, or consultants (the “New Equity Incentive PlanProposal”);
(6) TheConvertible Debt Issuance Proposal — to approve and adopt the issuance of shares of Company Common Stock toYA II PN, Ltd., a Cayman Islands exempted limited company (the “Convert Investor”) pursuant to the terms of thatcertain Debenture Purchase Agreement, to comply with Nasdaq Rule 5635(d) (the “Convertible Debt IssuanceProposal”); and
(7)The Marketing Agreement Share Issuance Proposal — to approve and adopt the issuance of up to anaggregate of 600,000,000 shares of Company Common Stock at a price per share of $1.12 per share of Company Common Stock, inaccordance with the Master Marketing Services Agreement, dated May 12, 2025 (the “Marketing Agreement”) by andbetween Nakamoto and BTC, Inc., a Delaware corporation (“BTC Inc”), which will be assigned to and assumed by KindlyMDfrom Nakamoto at the closing of the Merger Agreement pursuant to the Assignment and Assumption Agreement with Novation by andbetween KindlyMD, Nakamoto, and BTC (the “Assignment Agreement”), to comply with Nasdaq Rules 5635(a), 5635(b), and5635(d) (the “Marketing Agreement Share Issuance Proposal”).
TheBoard on June 19, 2025, unanimously (i) determined that the Additional PIPE Financing is fair to and in the best interests of theCompany and its stockholders, (ii) approved and declared advisable the Additional PIPE Financing, (iii) authorized and approved the execution,delivery and performance by the Company of the Additional Subscription Agreements, upon the terms and subject to the conditions set forthin the Additional Subscription Agreements, and (iv) recommended the adoption of the issuance of the Company Common Stock pursuant tothe Additional Subscription Agreements. On June 19, 2025, holders of a majority of the issued and outstanding shares of CompanyCommon Stock delivered to the Company a written shareholder consent, in accordance with Section 16-10a-704 of the Utah Revised BusinessCorporations Act and the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, to adopt andapprove the following proposals (the “June Proposals”):
(1) TheAdditional PIPE Proposal — to approve and adopt the Additional Subscription Agreements with the AdditionalSubscribers in an aggregate amount of approximately $51.5 million, pursuant to which the Company agreed to (A) issue, and suchAdditional Subscribers agreed to purchase, shares of Company Common Stock at a purchase price of $5.00 per share in a privateplacement (the “Additional PIPE Shares”) and (B) use commercially reasonable efforts to register the resale ofAdditional PIPE Shares with the SEC within 30 days after closing of the Merger Agreement, seek effectiveness as soon as practicable,and maintain effectiveness until the earlier of (i) the Additional Subscribers no longer holding the Additional PIPE Shares, (ii)all additional PIPE Shares being freely tradable, or (iii) three years from effectiveness (the “Additional PIPEProposal”); and
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(2) TheAdditional Share Issuance Proposal — to approve and adopt the issuance of an aggregate of 10,300,000 shares ofCompany Common Stock at a price per share of $5.00 per share of Company Common Stock to the Additional Subscribers to comply with:(A) Section 5635(a) of The Nasdaq Stock Market’s Listing Rules (the “Nasdaq Rules”); (B) Section 5635(b) of theNasdaq Rules, as applicable ; and (C) Section 5635(d) of the Nasdaq Rules (the “Additional Share IssuanceProposal”).
Theadoption of the May Proposals and approval of the Merger and related Transactions by the Company’s stockholders required the affirmativevote or consent by the holders of a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote thereon.On May 18, 2025, holders of approximately 50.76% of the outstanding voting power of the Company, which collectively on May 18,2025 held of record and beneficially owned 3,708,163 shares of Company Common Stock (the “May 18 Majority Stockholders”),delivered a written consent approving and adopting in all respects the Proposals (the “Written Consent”). As a result, nofurther action by any stockholder of the Company is required under applicable law or the Merger Agreement (or otherwise) to adopt theMerger Agreement or approve the Merger and related Transactions, or adopt and approve any of the Proposals, and the Company will notbe soliciting your vote for or consent to the Proposals and will not call a stockholders’ meeting for purposes of voting on theadoption of the Proposals, including the Merger Agreement and the approval of the transactions contemplated by the Merger Agreement.
Theadoption of the June Proposals and approval of the Additional PIPE Issuance and related transactions by the Company’s stockholdersrequired the affirmative vote or consent by the holders of a majority of the voting power of the outstanding shares of Company CommonStock entitled to vote thereon. On June 19, 2025, stockholders which collectively on June 19, 2025 held of record and beneficiallyowned 3,813,927 shares of Company Common Stock representing approximately 50.14% of the aggregate voting power of the then-issued andoutstanding shares of Company Common Stock (the “June 19 Majority Stockholders”), delivered a written consent approving andadopting in all respects the June Proposals (the “June Written Consent”).
TheMerger Agreement contains certain termination rights for the parties, including (i) by mutual written consent; (ii) by either party ifthe Merger shall not have been consummated by November 14, 2025; (iii) by either party if a permanent injunction has been issued or otherlaw has been enacted prohibiting or making illegal the Merger; (iv) by either party if the required Kindly stockholder approval is notobtained within seven business days after signing; (v) by Kindly if (A) Nakamoto has breached its representations or covenants in a waythat causes a condition to closing to fail or, (B) if prior to receipt of Nakamoto stockholder approval, Nakamoto effected a Merger PartnerBoard Recommendation Change; (vi) by Nakamoto if (A) Kindly has breached its representations or covenants in a way that causes a conditionto closing to fail or, (B) if prior to receipt of Kindly stockholder approval, Kindly effected a Public Company Board RecommendationChange; (vii) by either party upon certain material breaches of the other party; (viii) by either party upon receipt of a Superior Proposalprior to receipt of the applicable stockholder approval and subject to certain obligations; and (ix) by Nakamoto if Kindly enters intobankruptcy, receivership or other similar proceedings. The Merger Agreement further provides that, upon termination of the Merger Agreementunder certain circumstances, Kindly may be required to pay Nakamoto a termination fee of $2.5 million, plus the aggregate amount of proceedsreceived by Kindly in respect of any exercises of any Public Company Warrants. Nakamoto may be required to pay Kindly a termination feeof $2.5 million.
OnJuly 22, 2025, the Company has filed a Notice of Stockholder Action by Written Consent and Information Statement on Schedule 14C (the“Information Statement”) with the Securities and Exchange Commission that contains more detailed information on the proposedMerger, the Merger Agreement and the Ancillary Agreements. The foregoing description of the Merger Agreement, as well as the InitialSubscription Agreements, Additional Subscription Agreements, Debenture Purchase Agreement, and other Ancillary Agreements, do not purportto be complete and are qualified in their entirety by reference to the full text of the agreements, copies of which are filed as Annexesto the Information Statement that has been mailed to all shareholders of record.
WarrantExercises
Since May 12, 2025 through the close of businesson August 4, 2025, the Company has issued 1,511,320 shares of its common stock pursuant to the exercise of warrants by warrant holders(with 18 of those shares being issued after July 1, 2025). Through the close of business on August 4, 2025, the Company has received atotal of $9,216,534 from the exercise of these warrants.
Resultsof Operations
Comparisonof the Three Months Ended June 30, 2025 and 2024
Thefollowing table sets forth key components of our results of operations during the three months ended June 30, 2025 and 2024, both indollars and as a percentage of our revenues:
For the Three Months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of Revenues | Amount | % of Revenues | |||||||||||||
| Net Revenues | $ | 408,527 | 100.0 | % | $ | 639,057 | 100.0 | % | ||||||||
| Operating Expenses | ||||||||||||||||
| Cost of revenues | 7,552 | 1.8 | % | 61,947 | 9.7 | % | ||||||||||
| Salaries and wages | 1,656,288 | 405.4 | % | 802,287 | 125.5 | % | ||||||||||
| General and administrative | 1,121,482 | 274.5 | % | 443,969 | 69.5 | % | ||||||||||
| Research and development | 4 | 0.0 | % | 342,314 | 53.6 | % | ||||||||||
| Depreciation | 14,692 | 3.6 | % | 25,733 | 4.0 | % | ||||||||||
| Total Operating Expenses | 2,800,018 | 283.4 | % | 1,676,250 | 114.2 | % | ||||||||||
| Loss from Operations | (2,391,491 | ) | (242.0 | )% | (1,037,193 | ) | (70.6 | )% | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Other income | 26,825 | 6.6 | % | 13,828 | 2.2 | % | ||||||||||
| Interest expense | (3,668 | ) | (0.9 | )% | (318,450 | ) | (49.8 | )% | ||||||||
| Unrealized loss on digital assets | (39,019 | ) | (9.6 | )% | - | - | ||||||||||
| Loss on disposal of property and equipment | (6,434 | ) | (1.6 | )% | - | - | ||||||||||
| Loss on extinguishment of debt | - | - | (38,889 | ) | (6.1 | )% | ||||||||||
| Gain on change in fair value of derivative liabilities | - | - | 61,051 | 9.6 | % | |||||||||||
| Total Other Expense | (22,296 | ) | (2.3 | )% | (282,460 | ) | (19.2 | )% | ||||||||
| Net Loss Before Income Taxes | (2,413,787 | ) | (244.3 | )% | (1,319,653 | ) | (89.9 | )% | ||||||||
| Provision for income taxes | - | - | ||||||||||||||
| Net Loss | $ | (2,413,787 | ) | (244.3 | )% | $ | (1,319,653 | ) | (89.9 | )% | ||||||
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Revenues
TheCompany earned $231,726 in reimbursements from insurance payers during the three months ended June 30, 2025, representing a 153.1%increase compared to the $91,553 earned during the three months ended June 30, 2024.
Revenuesdecreased by $230,530, or 36.1%, to $408,527 for the three months ended June 30, 2025, from $639,057 for the three months ended June30, 2024. The decrease in revenues is primarily attributed to a decrease in cash-pay patient care service pricing and the closing of ourBountiful location.
OperatingExpenses
Operatingexpenses increased by $1,123,768 or 67.0%, to $2,800,018 for the three months ended June 30, 2025, from $1,676,250 for the three monthsended June 30, 2024. The increase in operating expenses is primarily attributable to the following:
| 1. | Salaries and wages increased by $854,001, or 106.4%, to $1,656,288 for the three months ended June 30, 2025, from $802,287 for the three months ended June 30, 2024. The increase in salaries and wages is primarily attributed to stock as compensation and additional contracting labor as we expand our operations in medical services after our IPO, additional support as a public company. | |
| 2. | General and administrative expenses increased by $677,513, or 152.6%, to $1,121,482 for the three months ended June 30, 2025, from $443,969 for the three months ended June 30, 2024. The increase in general and administrative expenses is primarily attributed to increased legal fees, investor and public relations, increased insurance for directors and officers as a publicly traded company and marketing and advertising costs. | |
| 3. | Research and development decreased by $342,310, or 100.0%, to $4 for the three months ended June 30, 2025, from $342,314for the three months ended June 30, 2024. The decrease in research and development is primarily attributed to a decrease inthe enterprise data management project as the Company focuses resources on the upcoming merger. |
OtherExpense
Netother expense decreased by $260,164, or 92.1%, to $22,296 for the three months ended June 30, 2025, from $282,460 for the three monthsended June 30, 2024. The decrease in net other expense is primarily attributable to the following:
| 1. | Other income increased by $12,997, or 94.0%, to $26,825 for the three months ended June 30, 2025, from $13,828 for the three months ended June 30, 2024. This increase is primarily attributable to interest income from the exercise of warrant funds and subsequent increase in cash. | |
| 2. | Interest expense decreased by $314,782, or 98.8%, to $3,668 for the three months ended June 30, 2025 from $318,450 for the three months ended June 30, 2024. This decrease in interest expense is primarily attributed to a reduction of notes payable and amortization of debt discounts. | |
| 3. | Unrealized loss on digital assets was $39,019 for the three months ended June 30, 2025 representing a 100% increase from $0 for the three months ended June 30, 2024. This increase in unrealized digital assets is attributed to the purchase of 21 bitcoin during the three months ended June 30, 2025. | |
| 4. | Loss on extinguishment of debt decreased by $38,889, or 100.0%, to $0 for the three months ended June 30, 2025 from$38,889 for the three months ended June 30, 2024. The decrease in the loss on extinguishment of debt is primarily attributed to the notespayable from the prior year that the Company repaid in full Consequently,the corresponding derivative liability was extinguished and the Company recognized a loss on extinguishment of debt. | |
| 5. | The fair value of derivative liability decreased by $61,051, or 100.0%, to $0 for the three monthsended June 30, 2025 from $61,051 for the three months ended June 30, 2024. This elimination in fair value of derivativeliability is primarily attributed to the repayment and settlement of notes payable in connection with our IPO. |
NetLoss
Asa result of the cumulative effect of the factors described above, our net loss was $2,413,787 for the three months ended June 30, 2025,compared to a net loss of $1,319,653 for the three months ended June 30, 2024.
Net loss per share increased by $0.09, or 34.6%, to $(0.35) for the threemonths ended June 30, 2025, compared to $(0.26) for the three months ended June 30, 2024. KindlyMD management strives to look for opportunitiesto optimize revenue by increasing sales, improving margins, and controlling ongoing operating expenses.
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Comparisonof the Six Months Ended June 30, 2025 and 2024
Thefollowing table sets forth key components of our results of operations during the six months ended June 30, 2025 and 2024, both in dollarsand as a percentage of our revenues:
For the Six Months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Amount | % of Revenues | Amount | % of Revenues | |||||||||||||
| Net Revenues | $ | 988,182 | 100.0 | % | $ | 1,468,086 | 100.0 | % | ||||||||
| Operating Expenses | ||||||||||||||||
| Cost of revenues | 15,466 | 1.6 | % | 69,691 | 4.7 | % | ||||||||||
| Salaries and wages | 2,659,465 | 269.1 | % | 1,510,253 | 102.9 | % | ||||||||||
| General and administrative | 1,713,919 | 173.4 | % | 734,097 | 50.0 | % | ||||||||||
| Research and development | 101 | 0.0 | % | 377,731 | 25.7 | % | ||||||||||
| Depreciation | 32,463 | 3.3 | % | 50,634 | 3.4 | % | ||||||||||
| Total Operating Expenses | 4,421,414 | 447.4 | % | 2,742,406 | 186.8 | % | ||||||||||
| Loss from Operations | (3,433,232 | ) | (347.4 | )% | (1,274,320 | ) | (86.8 | )% | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Other income | 36,885 | 3.7 | % | 25,868 | 1.8 | % | ||||||||||
| Interest expense | (9,998 | ) | (1.0 | )% | (375,689 | ) | (25.6 | )% | ||||||||
| Unrealized loss on digital assets | (39,019 | ) | (3.9 | )% | - | - | ||||||||||
| Loss on disposal of property and equipment | (6,434 | ) | (0.7 | )% | - | - | ||||||||||
| Loss on extinguishment of debt | - | - | (38,889 | ) | (2.6 | )% | ||||||||||
| Gain on change in fair value of derivative liabilities | - | - | 61,051 | 4.2 | % | |||||||||||
| Total Other Expense | (18,566 | ) | (1.9 | )% | (327,659 | ) | (22.3 | )% | ||||||||
| Net Loss Before Income Taxes | (3,451,798 | ) | (349.3 | )% | (1,601,979 | ) | (109.1 | )% | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net Loss | $ | (3,451,798 | ) | (349.3 | )% | $ | (1,601,979 | ) | (109.1 | )% | ||||||
Revenues
The Company earned $316,999 in reimbursements from insurance payers duringthe six months ended June 30, 2025, representing a 150.9% increase compared to the $126,325 earned during the six months ended June 30,2024.
Revenuesdecreased by $479,904, or 32.7%, to $988,182 for the six months ended June 30, 2025, from $1,468,086 for the six months ended June30, 2024. The decrease in revenues is primarily attributed to a decrease in cash-pay patient care services and the closing of our Bountiful location. KindlyMD continuesincrease our medical services and shift toward insurance billing with commercial and governmental payers including Medicare,Medicaid, Select Health, Blue Cross Blue Shield, Cigna, and other commercial payers as we expand our service line.
OperatingExpenses
Operatingexpenses increased by $1,679,008 or 61.2%, to $4,421,414 for the six months ended June 30, 2025, from $2,742,406 for the six months endedJune 30, 2024. The increase in operating expenses is primarily attributable to the following:
| 1. | Salaries and wages increased by $1,149,212, or 76.1%, to $2,659,465 for the six months ended June 30, 2025, from $1,510,253 for the six months ended June 30, 2024. The increase in salaries and wages is primarily attributed to stock as compensation and additional contracting labor as we expand our operations in medical services, additional support as a public company, and increased labor for marketing awareness as KindlyMD shifts to insurance billing with commercial and governmental payers. |
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| 2. | General and administrative expenses increased by $979,822, or 133.5%, to $1,713,919 for the six months ended June 30, 2025, from $734,097 for the six months ended June 30, 2024. The increase in general and administrative expenses is primarily attributed to increased legal fees, professional fees such as investor public relations, increased insurance for directors and officers as a publicly traded company and marketing and advertising. | |
| 3. | Research and development decreased by $377,630, or 100.0%, to $101 for the six months ended June 30, 2025, from $377,731for the six months ended June 30, 2024. The decrease in research and development is primarily attributed to a decrease inthe enterprise data management project. |
OtherExpense
Netother expense decreased by $309,093, or 94.3%, to $18,566 for the six months ended June 30, 2025, from $327,659 for the six months endedJune 30, 2024. The decrease in net other expense is primarily attributable to the following:
| 1. | Other income increased by $11,017, or 42.6%, to $36,885 for the six months ended June 30, 2025, from $25,868 for the six months ended June 30, 2024. This increase is primarily attributable to interest income from the exercising of warrant funds upon merger announcement. | |
| 2. | Interest expense decreased by $365,691, or 97.3%, to $9,998 for the six months ended June 30, 2025 from $375,689 for the six months ended June 30, 2024. This decrease in interest expense is primarily attributed to a reduction of notes payable and amortization of debt discounts. | |
| 3. | Unrealized loss on digital assets increased by $39,019, or 100.0%, to $39,019 for the six months ended June 30, 2025from $0 for the six months ended June 30, 2024. This increase in unrealized digital assets is primarily attributed to thepurchase of 21 bitcoin during the three month ended June 30, 2025. | |
| 4. | Loss on extinguishment of debt decreased by $38,889, or 100.0%, to $0 for the six months ended June 30, 2025 from$38,889 for the six months ended June 30, 2024. This decrease in the loss on extinguishment of debt is primarily attributed to the notespayable from the prior year that the Company repaid and issued each note holder common stock equal to the principal amount of the notesat the IPO price of $5.50, totaling 80,808 shares of restricted common stock, with a fair value of $214,949 or $2.66 per share. Consequently,the corresponding derivative liability was extinguished and the Company recognized a loss on extinguishment of debt. | |
| 5. | Gain on the change in fair value of derivative liability decreased by $61,051, or 100.0%, to $0 for the six monthsended June 30, 2025 from $61,051 for the six months ended June 30, 2024. This decrease in loss on the change in fair value of derivativeliability is primarily attributed to the repayment and issuance of common shares upon settlement of notes payable in connection with apublic offering IPO. |
NetLoss
Asa result of the cumulative effect of the factors described above, our net loss was $3,451,798 for the six months ended June 30, 2025,compared to a net loss of $1,601,979 for the six months ended June 30, 2024.
Net loss per share decreased by $0.21, or 63.6%, to $(0.54) for the sixmonths ended June 30, 2025, compared to $(0.33) for the six months ended June 30, 2024. KindlyMD management strives to optimize revenue by increasing sales, improving margins, and controlling ongoing operating expenses.
Liquidityand Capital Resources
Asof June 30, 2025, we had cash and cash equivalents of $6,024,604 and total working capital of $5,881,838. For the six months ended June30, 2025, the Company incurred an operating loss of $3,451,798 and used cash flows in operating activities of $2,776,302.
Todate, we have financed our operations primarily through revenues generated from operations and cash proceeds from financing activities.On May 12, 2025, the Company announced its intent to merge with Nakamoto Holdings,Inc., a bitcoin treasury company, and simultaneously exercised warrants previously issued from the IPO on June 3, 2024. Exercising thesewarrants have provided us with the liquidity and cash reserves necessary to meet our obligations for at least the 12-month period followingthe date of this report, and to assist us in implementing our strategic operational business plans to create sustained cash flow generationthereafter. Management acknowledges the decrease in working capital and is focused on increasing cash reserves and liquidity in the nearterm through strategic transactions.
Summaryof Cash Flow
Thefollowing table sets forth key components of our results of cash flow activities during the six months ended June 30, 2025 and 2024:
For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (2,776,302 | ) | $ | (1,126,976 | ) | ||
| Net cash used in investing activities | (2,521,108 | ) | (11,182 | ) | ||||
| Net cash provided by financing activities | 9,048,390 | 5,352,664 | ||||||
| Net change in cash and cash equivalents | 3,750,980 | 4,214,506 | ||||||
| Cash and cash equivalents at the beginning of period | 2,273,624 | 525,500 | ||||||
| Cash and cash equivalents at the end of period | $ | 6,024,604 | $ | 4,740,006 | ||||
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Operating Activities
Netcash used in operating activities was $2,776,302 for the six months ended June 30, 2025, which was primarily due to a netloss of $3,451,798 and an increase in prepaid expenses and other current assets of $148,222, which was partially offset by non-cashexpenses of $836,157 and an increase in accounts payable and accrued expenses of $40,476.
Net cash used in operating activities was $1,126,976for the six months ended June 30, 2024, which was primarily due to a net loss of $1,601,979 and an increase in prepaid expenses and othercurrent assets of $305,430, which was partially offset by non-cash expenses of $452,940 and an increase in accounts payable and accruedexpenses of $298,939.
Investing Activities
Net cash used in investing activities was $2,521,108for the six months ended June 30, 2025, which was the result of the purchase of digital assets of $2,289,585 and an increase in capitalizedsoftware additions of $231,523.
Net cash used in investing activities was $11,182for the six months ended June 30, 2024, which was the result of the purchase of property and equipment.
Financing Activities
Net cash provided by financing activities was $9,048,390for the six months June 30, 2025, which was primarily due to $9,216,420 in proceeds from the exercise of warrants.
Net cash provided by financing activitieswas $5,352,664 for the six months ended June 30, 2024, which was primarily due to $5,860,650 of net proceeds from the issuance of commonstock and warrants in connection with our IPO. This was partially offset by $552,655 in repayments of notes payable.
Asa result of these cash flow activities, our net cash increased by $3,750,980, or 165.0%, from $2,273,624 as of December 31, 2024, to$6,024,604 as of June 30, 2025.
Off-BalanceSheet Arrangements
Wehave no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
CriticalAccounting Policies and Estimates
For a description, of our critical accounting policies and estimates, referto “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies”in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025. There have been no materialchanges to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2024.
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ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Asa smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide theinformation under this item.
ITEM4. CONTROLS AND PROCEDURES
Evaluationof Disclosure Controls and Procedures
Under the supervision and with the participation ofmanagement, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectivenessof our disclosure controls and procedures as of June 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the SecuritiesExchange Act of 1934 (the “Exchange Act”). As a result of this evaluation, our principal executive officer and principal financialofficer have concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective due to the material weaknessesin internal control over financial reporting described below. Notwithstanding the identified material weaknesses, management, includingour principal executive officer and principal financial officer, believes the condensed consolidated financial statements included inthis report fairly represent, in all material respects, our financial condition, results of operations and cash flows as of and for theperiods presented in accordance with GAAP.
Disclosure controls and proceduresare designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act isrecorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such informationis accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriateto allow timely decisions regarding required disclosure.
Changesin Internal Control over Financial Reporting
Therewere no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)during the period covered by this report that have materially affected or are reasonably likely to materially affect, our internal controlover financial reporting. Please refer our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed, with the SECon March 28, 2025.
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PARTII
PARTII—OTHER INFORMATION
ITEM1. LEGAL PROCEEDINGS
Fromtime to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to timethat may harm our business. We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in anyproceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates,or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
ITEM1A. RISK FACTORS
Inaddition to other information set forth in this report, readers should carefully consider the factors discussed in Part I, Item 1A. “RiskFactors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 28, 2025, beforemaking an investment decision. Our business, financial condition, and results of operations can be affected by any of these factors,whether they are currently known or unknown, in whole or in part, could materially and adversely affect our business, financial condition,results of operations, and stock price.
ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuance of Common Stock
The Company has claimed exemptionfrom registration under the Securities Act for the sales and issuances of securities in the following transactions under Section 4(a)(2)of the Securities Act and/or Regulation D promulgated thereunder, in that such sales and issuances did not involve a public offering,or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plansor pursuant to a written contract relating to compensation, as provided by Rule 701.
On April 1, 2025, the Companyissued shares of its common stock to several of its employees and consultants in exchange for services rendered prior to that date andpursuant to existing, written employment agreements or other compensation agreements. These issuances included the issuance of 28,780shares to Tim Pickett, 1,838 shares to Amy Powell, 1,838 shares to Christian Robinson, 1,838 shares to Gary Seelhorst, 8,577 shares toJeremy Joyal, 15,000 shares to Jeffrey Dunetz and 15,000 shares to Camilo Basto. These shares were valued at the closing price of theCompany’s common stock on April 2, 2025, at $1.61 per share.
Purchasesof Equity Securities by the Issuer and Affiliated Purchasers
OnOctober 15, 2024, the members of the Board of Directors of the Company approved the adoption of a Stock Repurchase Program through whichthe Company may purchase up to $500,000 worth of shares of its common stock from time to time, as market conditions warrant. The Company’srepurchases may be made in the open market, in privately negotiated transactions, pursuant to a Rule 10b5-1 trading plan or otherwisein accordance with applicable securities laws and other requirements. The amount and timing of any repurchases will be determined atmanagement’s discretion and depend on a variety of factors, including business, economic and market conditions, regulatory requirements,prevailing stock prices and other considerations. The share repurchase program has no time limit, does not obligate the Company to repurchaseany dollar amount or number of shares of common stock, and may be amended, suspended or discontinued at any time. As of the three monthsending June 30, 2025, the Company retired 28,000 shares of common stock in Treasury.
| Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||||||
| January 1, 2025 - June 30, 2025 | 7,500 | $ | 1.27 | 28,000 | $ | 490,443 | ||||||||||
ITEM3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM4. MINE SAFETY DISCLOSURES
Notapplicable.
ITEM5. OTHER INFORMATION
OnMay 6, 2025, the Company entered into the First Addendum to Warrant Agent Agreement with VStock Transfer, LLC (the “Warrant Agent”)through which it modified a sentence in Section 3.3.7(b) of the Warrant Agent Agreement to clarify an ambiguity in the language and tomatch the language included in the warrants for which the Warrant Agent serves as agent. The addendum confirms that the warrants shallbe exercised for cash if an effective registration statement is in place.
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ITEM6. EXHIBITS
| * | Filed herewith. |
| + | Executive compensation plan or arrangement. |
| ** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| 26 |
SIGNATURES
Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.
| KINDLY MD, INC. | ||
| (Registrant) | ||
| Date: August 4, 2025 | By: | /s/ Tim Pickett |
| Tim Pickett | ||
| Chief Executive Officer | ||
| Date: August 4, 2025 | By: | /s/ Jared Barrera |
| Jared Barrera | ||
| Chief Financial Officer |
| 27 |
Exhibit 10.20
FIRST ADDENDUM TO WARRANT AGENT AGREEMENT
This First Addendum (“Addendum”)to that certain Warrant Agent Agreement dated effective as of June 3, 2024 (the “Agreement”), entered into byand between among KINDLY MD, INC., a Utah corporation (“Company”) and VSTOCK TRANSFER, LLC, aCalifornia limited liability company (“Warrant Agent”) shall read as follows:
1. The capitalized terms usedin this Addendum shall have the same meaning as given in the Agreement unless otherwise changed or altered herein.
2. The Company and the WarrantAgent agree to amend in writing Section 3.3.7(b) of the Agreement to clarify an ambiguity in the language and to match the language includedin the Agreement to the original Company Warrants.
3. The Company and Warrant Agentconfirm that they approve the following language to replace the first sentence in Section 3.3.7(b) of the Agreement:
(b) If a Restrictive Legend Event hasoccurred, and is continuing as of the date of exercise of the Warrant, the Warrant shall only be exercisable on a cashless basis.
4. In all other respects wherenot in conflict herewith the terms and provisions of the Agreement shall remain in full force and effect.
5. This Addendum may be executedin one or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together,constitute and be one and the same instrument; and, facsimile or electronically submitted signatures of the authorized representativesof the parties hereto shall be considered original signatures for all intents and purposes.
[Signatures appear on the next page]
INWITNESS WHEREOF, the parties have executed this Addendum as of the day and year stated below.
| COMPANY | ||
| KINDLY MD, INC., | ||
| a Utah corporation | ||
| By: | /s/ Tim Pickett | |
| Name: | Tim Pickett | |
| Title: | CEO | |
| August 4, 2025 | ||
| WARRANT AGENT | ||
| VSTOCK TRANSFER, LLC | ||
| By: | /s/ Young Kim | |
| Name: | Young Kim | |
| August 4, 2025 | ||
EXHIBIT31.1
CERTIFICATIONOF PRINCIPAL EXECUTIVE OFFICER
REQUIREDBY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,
ASADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,Tim Pickett, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Kindly MD, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 4, 2025 | By: | /s/ Tim Pickett |
| Tim Pickett | ||
| Chief Executive Officer (Principal Executive Officer) |
EXHIBIT31.2
CERTIFICATIONOF PRINCIPAL ACCOUNTING OFFICER
REQUIREDBY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,
ASADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,Jared Barrera, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Kindly MD, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 4, 2025 | By: | /s/ Jared Barrera |
| Jared Barrera | ||
| Chief Financial Officer (Principal Accounting Officer) |
EXHIBIT32.1
CERTIFICATIONOF
PRINCIPALEXECUTIVE OFFICER
PURSUANTTO 18 U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO SECTION 906 OF
THESARBANES-OXLEY ACT OF 2002
I,Tim Pickett, Chief Executive Officer of Kindly MD, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350 adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 4, 2025 | By: | /s/ Tim Pickett |
| Tim Pickett | ||
| Chief Executive Officer (Principal Executive Officer) |
EXHIBIT32.2
CERTIFICATIONOF
PRINCIPALACCOUNTING OFFICER
PURSUANTTO 18 U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO SECTION 906 OF
THESARBANES-OXLEY ACT OF 2002
I,Jared Barrera, Chief Financial Officer of Kindly MD, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350 adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 4, 2025 | By: | /s/ Jared Barrera |
| Jared Barrera | ||
| Chief Financial Officer (Principal Accounting Officer) |