COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 15. COMMITMENTS AND CONTINGENCIES

The Company, from time to time, might have claims against it incidental to the Company’s business including but not limited to tax demands and penalties. While the outcome of any of these matters cannot be predicted with certainty, management does not believe that the outcome will have a material adverse effect on the accompanying consolidated financial statements.

Employee Bonuses

The Company has accrued $2.1 million and $2.1 million as of September 30, 2025 and December 31, 2024, respectively, of bonuses to employees and management of the Company and were included in accounts payable and accrued expenses. The bonuses are based on the Company’s performance objectives that were achieved during the respective years. The bonuses for the year ended December 31, 2024, were paid on March 14, 2025. Performance bonuses are based on management’s periodic review and the amounts are accrued monthly.

Legal Matters

On October 9, 2023, Arley Lozano-Jaramillo (“Lozano”), an individual, commenced proceedings against the Company by filing a complaint with the 11th Judicial Circuit Court for Miami-Dade County, Florida (the “Court”) which named the Company as the defendant. Lozano, either individually or through the entities controlled by him (XPay, Vakano Industries) entered into certain non-binding letters of intent on July 13, 2021 and as of September 2021 (the second letter of intent was a draft and not signed by the parties) pursuant to which Lozano was a seller of certain assets and technology related to XPay Wallet, intellectual property regarding the AthenaPay POS System, XPay POS System and related technology (the “XPay Assets”) for the proposed purchase price of $3.0 million and 270,000,000 shares of common stock of the Company (valued at $0.10 per share). The acquisition of the XPay Assets was subject to the execution of a definitive acquisition agreement. No such agreement was finalized nor entered into by the parties. The Company made payments to Lozano for a total amount of approximately $1,600 and Lozano transferred the ownership of XPay Assets to the Company. Lozano alleges breach of contract, promissory estoppel, unjust enrichment, fraud in the inducement and conversion. He asserts the claim for failure to compensate Lozano pursuant to the terms of the purchase price provided in the non-binding letter of intent (and the unsigned draft letter of intent), which includes the remaining amount of the purchase price ($1.4 million) and 270,000,000 shares of the Company’s common stock. Lozano did not offer any evidence of a signed and binding acquisition agreement. The claim also seeks an award for legal and other costs relating to the proceeding.

The Company disputes the allegations and continues to vigorously defend against them. Accordingly, the Company filed with the Court on February 9, 2024, a motion to dismiss Lozano’s complaint. The Court granted the Company’s motion in part and denied in part, dismissing two of the five causes of action. The Company proceeded to file its counter-complaint against Plaintiff who presented his answer on October 6, 2024. The potential loss related to the identified claim is between $0 and $1.4 million and the issuance of 270,000,000 shares of common stock valued at $27.0 million, the amount of damages that Lozano is seeking in the lawsuit. The additional costs mentioned in the claim are not able to be estimated at this time. The Company does not believe that it is probable that a liability has been incurred September 30, 2025 and December 31, 2024, related to this lawsuit. The case is currently in the discovery phase and trial is scheduled for March 2, 2026.

On June 21, 2024, Digital Access, LLC, a Michigan limited liability company (“Digital Access”) and two additional co-defendants, filed a complaint against Athena before the US District Court for the Eastern District of Michigan. The complaint alleges tortious interference with business relationships and business expectancy, statutory and common law conversions, and trespass to chattels and seeks injunctive relief. The case was removed to the U.S. District Court for the Northern District of Indiana. Although the Company did not believe that there was any merit to the allegations against it, a mutually acceptable settlement was reached by the parties that concluded the case. The parties completed the agreement and its requirements. The corresponding court entered an Order of Dismissal on March 25, 2025.

On August 20, 2024, Keon Jackson (“Jackson”), an individual, commenced what was entitled as a “Class Action Complaint” against Athena, filed at the US District Court for the Northern District of Florida (the “Court”). The complaint alleges receipt of unwanted telemarketing text messages in contravention to Federal and State statutes while seeking class certification status. The claim by Jackson is for the award of the statutory amounts as established in the corresponding statutes. On June 18, 2025, the Court issued an Order Granting Motion for Class Certification. Additionally, on July 16, 2025, the Court entered an Order granting in part and denying in part Jackson’s motion for summary judgment. The Court did grant Jackson’s summary judgment under the Florida Telephone Solicitation Act (“FTSA”), in 4,512 instances and where this statute establishes a penalty of $500 per instance. The Court did not adjudicate at that time if violations occurred under the federal Telephone Consumer Protection Act of 1991 (“TCPA”), and such question will be decided in a trial on the merits. The Company continues its attempts to engage in new discussions to entertain a settlement with Jackson. Discovery between the parties has concluded, and the trial on the remaining issues is scheduled to commence on January 20, 2026, with an estimated time of two weeks.

On September 9, 2024, S.M. on behalf of herself and all others (“S.M.”), an individual, filed a complaint that includes class action allegations, against Athena, Genesis Coin, Inc., and two other defendants, filed at the Common Pleas Court at Cuyahoga County, Ohio. The complaint against Company alleges negligence and violations to the Ohio Products Liability Act because of alleged elder financial scams involving cryptocurrency and the operation of kiosks. S.M. alleges the need for implementing effective and sufficient checks and procedures both at the kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what the Company already has in place. The claim by S.M. against Athena is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. On October 25, 2024, S.M. filed its First Amended Class Action Complaint. But the case has been removed to the US District Court for the Northern District of Ohio, Eastern Division, where a motion to dismiss remains pending a decision from the court.

The motion to dismiss filed by Athena continues to be pending, and the parties await for this decision from the Court. There have been no new filings in the case made by S.M. pertaining to any additional amendment to her complaint.

On November 25, 2024, Karen Carew on behalf of herself and all others (“Carew”), an individual, filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Monmouth County (the “State Court”). The complaint against Athena alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. Carew alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what already Athena has in place. The claim by Carew against Athena is for an undetermined amount of compensation (which cannot exceed $5,000,000 under the Class Action Fairness Act of 2005) as well as injunctive relief.

After removing the case to Federal Court, the case got remanded back to State Court as Carew filed an amended complaint removing all class action allegations, and becoming a sole plaintiff. Caren then filed a second amended complaint on July 16, 2025 at the State Court where she is still the sole plaintiff. A motion to dismiss filed by Athena is pending resolution from the State Court.

The Company disputes the claims and believes that the allegations are based on flawed legal theories and incorrect factual assumptions, and the Company intends to vigorously defend itself against these claims and allegations. Although the outcome of any litigation is inherently uncertain and may be materially adverse, based on current information, our management does not expect this litigation to have a material adverse effect on our financial condition and results of operations.

On January 21, 2025, Girma Yilma on behalf of himself and all others (“Yilma”), an individual, filed a complaint that includes class action allegations, against Athena, and two other retail establishments as defendants, filed at Colorado’s Arapahoe County District Court. The complaint against the Company alleges negligence and violations to various Colorado statutes such as its consumer protection act, civil theft, unjust enrichment, negligence and negligent design. As in the previous two cases filed by the same plaintiff’s law firm, it alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond to what the Company already has in place. The claim by Yilma against the Company is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable.

Athena filed a motion to compel arbitration on March 21, 2025. After the Court was fully briefed, the case was administratively closed and referred to obligatory arbitration on August 13, 2025. Yilma initiated the arbitration proceedings under JAMS as established in Athena’s Terms of Service.

On January 31, 2025, Zamareeh Odoms (“Odoms”), an individual, through counsel sent an extrajudicial claim for $500 thousand against Athena. The claim alleges lack of proper due diligence when recruiting or supervising an employee, agent or representative that caused damages to his person for alleged insults and verbal aggressions made while in the common areas of the office building. However, the individual involved that caused the alleged claims by Odoms is not an employee, agent or representative of the Company, the alleged actions were not within the scope of any duties for Athena and Athena had no control over his employment, actions, or behavior because there is no employment relationship. Therefore, the Company’s assessment of this case at this time is there is no liability by Athena.

No actions have been served upon Athena pertaining to any lawsuit that may have been filed by Odoms. However, the statute of limitation for a tort action in the State of Florida is 2 years, if not properly tolled. Thus, Odoms still has at least a year to file any judicial claims against Athena.

On February 6, 2025, Diane Reynolds on behalf of herself and all others (“Reynolds”), an individual, filed a complaint that includes class action allegations, against Athena and another codefendant, filed at the Circuit County Court of Montgomery in Maryland. The complaint was served upon Athena on March 24, 2025. The complaint against Athena alleges violations to Maryland’s Safe Act, negligence, product liability because of defective design, and violation of the State’s Consumer Protection Act. Similar to the previous akin cases, (i.e., the cases above of S.M. filed on September 9, 2024 and Girma Yilma filed on January 21, 2025) but using a different law firm this time, Reynolds alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what already Athena has in place. The claim by Reynolds against Athena is for an undetermined amount of compensation (which cannot exceed $5.0 million under the Class Action Fairness Act of 2005) as well as injunctive relief.

On February 26, 2025, the State of Iowa through its Attorney General (“Iowa”), filed separate complaints against Athena competitors Lux Vending, LLC, Bitcoin Depot Operating, LLC (both “Bitcoin Depot”), and GPD Holdings LLC d/b/a CoinFlip (“CoinFlip”) (all collectively “Competitors”). Iowa alleges violations to the State’s Consumer Fraud Act by the Competitors. Also, Iowa further advises that they had subpoenaed fourteen (14) companies and that “[t]he investigation into crypto ATM companies is ongoing.”

In the complaints against Competitors, it is requested by Iowa for civil penalties of up to $40 thousand per violation of the Consumer Fraud Act because of any misrepresentation, deception or unfair practices. Additionally, it demands the reimbursement of funds of the full transaction to defrauded victims, and a penalty of $5.0 million for each violation committed against an older individual. Although Athena believes that its operations can be clearly distinguished, Athena has received multiple requests for information from Iowa in matters substantially similar to those related to the complaints against Competitors. There is no money or invoices owed by the Company to the undersigned for this matter.

Despite the pair of requests for information and production of documents, Athena has not been served with, nor is it aware of any, civil action filed against it by Iowa similar to those of the Competitors.

On May 30, 2025, Rachael Gnadinger, Madeline McCausland, and Joanne Nebus-Horning, on behalf of themselves and others similarly situated (collectively, “Gnadinger”), filed a complaint that includes class action allegations, against Athena, its Chief Executive Officer, and other defendants, filed at the Superior Court of New Jersey Law Division, Middlesex County. The complaint against Athena alleges negligence and violations to various New Jersey statutes such as possession of stolen property, Racketeer Influenced and Corrupt Organizations, negligence and consumer fraud. Gnadinger alleges the need for implementing effective and sufficient checks and procedures both at the Bitcoin ATM kiosks and other internal procedures in order to intervene, prevent, mitigate, or deter the use of the kiosks in elderly scams, beyond what Athena already has in place. The claim by Gnadinger against Athena is for an undetermined amount of compensation (which cannot exceed $5,000,000 under the Class Action Fairness Act of 2005) as well as injunctive relief. The additional costs mentioned in the claim are not able to be estimated at this time, if any would be applicable. Athena has requested the removal of the case to the US District Court for the District of New Jersey. However, Gnadinger has moved to request the case be remanded back to the State Court in a September 15, 2025 filing. Therefore, at this time, the parties continue to await the Federal Court’s decision to remand or not the case to the State Court. Once the decision is made, remanded or not, Athena will then move to request that two of the claimants be compelled to arbitrate in accordance to the Terms of Service in effect at the time of their transactions.

On September 8, 2025, the District of Columbia (the “District”), through the Office of the Attorney General, filed a complaint against Athena in the Superior Court of the District of Columbia Civil Division. Pursuant to the complaint, the District alleged that Athena failed to disclose excessive fees and to protect consumers in violation of the District’s Consumer Protection Procedures Act (“CPPA”) and Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act (the “Financial Exploitation Act”). Specific causes of action include allegations of (1) deceptive trade practices in violation of the CCPA; (2) unfair trade practices in violation of the CCPA; and (3) violations of the Financial Exploitation Act. The lawsuit seeks a declaratory judgment that Athena violated the CPPA and Financial Exploitation Act; a permanent injunction enjoining Athena from violating the Financial Exploitation Act and CPPA, and requiring Athena to (a) remove unconscionable contract terms, including its no-refunds policy, its cap on refunds, and its liability limitation clauses; (b) fully disclose all transaction fees, including the actual percentage markup above the market rate, at the point of sale before consumers insert cash; and (c) institute and implement adequate fraud prevention measures, including appropriate daily and monthly transaction limits and effective fraud detection protocols; enjoin Athena from engaging in money transmissions in the District of Columbia until Athena has required licenses; order Athena to pay damages and restitution for the entire transaction amounts it is alleged to have collected in violation of the CPPA and Financial Exploitation Act; order Athena to pay damages and restitution, for all undisclosed fees it collected within the District in violation of the CPPA and Financial Exploitation Act; award civil penalties of $10,000 for each violation of the Financial Exploitation Act; award civil penalties of $5,000 for each violation of the CPPA; and award the District the costs of the action and reasonable attorneys’ fees. On October 31, 2025, ABI filed a motion to dismiss and is currently awaiting the District’s opposition, after which ABI will have an opportunity to reply.

On September 23, 2025, AML Software, Inc. (“AML”) filed a complaint against Athena, Taproot, PSBC, and Jordan Mirch, an individual, in the United States District Court for the Southern District of Florida (Case 1:25-cv-24378). The complaint alleges, among other things, that Athena and the other defendants misappropriated AML’s proprietary Bitcoin kiosk software source code. The claims asserted include copyright infringement (against all defendants), contributory and vicarious infringement (against Taproot, PSBC and Mr. Mirch), vicarious copyright infringement (against Mr. Mirch), misappropriation of trade secrets under the Defend Trade Secrets Act (against all defendants), unfair competition (against Athena, Taproot and PSBC), and conversion (against all defendants). AML seeks injunctive relief, return or destruction of all versions of the software code, damages including actual, statutory, and exemplary damages, disgorgement of profits, attorneys’ fees, and costs. The complaint alleges that Athena knowingly obtained and used AML’s copyrighted source code through transactions with other defendants and used it on approximately 2,800 Bitcoin kiosks. AML contends that Athena entered into agreements with related entities and ultimately paid approximately $9 million for the kiosks and associated software, which AML claims improperly included its proprietary source code.

At this stage, Athena is unable to predict the outcome of this litigation or reasonably estimate the potential loss or range of loss, if any. The Company intends to vigorously defend itself against these claims and allegations. As the case has just commenced, Athena is in the process of securing counsel, and as of this date it is yet to be served with or answer the complaint.

On November 6, 2025, plaintiff Chris Vaughan filed a putative nationwide class action complaint against ABI in the United States District Court for the Southern District of Florida. The complaint names only ABI as defendant and asserts claims under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. §§ 501.201 et seq., and what plaintiff terms the “Florida Financial Exploitation of Vulnerable Adults Act,” Fla. Stat. § 825.103. Plaintiff alleges that ABI operates Bitcoin ATMs (“Kiosks”) nationwide and has imposed excessive and insufficiently disclosed fees through fee-inclusive exchange rates, misleading or incomplete disclosures, and unfair refund practices, including with respect to scam victims and vulnerable consumers. The putative class consists of all persons in the United States who, during the applicable statute of limitations, used an Athena kiosk to purchase cryptocurrency and were charged a “Kiosk Fee.” Plaintiff seeks injunctive relief, restitution, disgorgement, damages, civil penalties, and attorneys’ fees and costs. As of the date of this letter, ABI has only recently become aware of the lawsuit, does not concede the accuracy of the allegations, intends to vigorously defend against the action, and is evaluating available defenses. At this early stage, ABI is unable to predict the outcome or reasonably estimate the potential loss or range of loss, if any.

We believe we have strong arguments against these open claims and litigation matters and plan to defend ourselves vigorously in these matters.

In addition to the above, from time to time, we are subject to allegations from various U.S. states that our activities constitute those of a money transmitter, and allegations that we failed to register as a money transmitter in those states. To date we have agreed to various consent orders and settlements with such states, none of which represent material amounts of penalties, assessments or fees, to settle such claims. The outcome of such ongoing and future allegations, complaints, claims and litigation cannot be predicted.

Occasionally we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters arising, for the most part, in the ordinary course of business. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings, to which we are a party, and we record a loss contingency when it is probable a liability has been incurred, and the amount of the loss can be reasonably estimated. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates.

Operating Leases

The Company has entered into certain leases primarily for ATM retail spaces and ATM machines. Operating lease expense is recognized in continuing operations by amortizing the amount recorded as an asset on a straight-line basis over the lease term. The operating lease expense is presented consistently with cost of revenues in the condensed consolidated statements of operations and comprehensive income (loss). In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

Balance sheet information related to operating right-of-use assets and lease liabilities consisted of the following (in thousands): 

	September 30, 2025		December 31, 2024
Right-of-use assets – operating leases	$	33,651	$	33,613
Operating lease liabilities, current portion		10,753		9,627
Operating lease liabilities, net of current portion		22,898		23,986
Total operating lease liabilities	$	33,651	$	33,613

Other supplemental information related to operating leases was as follows: 

	For the three months ended				For the nine months ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Weighted-average remaining lease term (in years)		3.34		2.80		3.34		2.80
Weighted-average discount rate		15%		15%		15%		15%
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)		4,123		2,892		11,290		8,150

The discount rates used in measuring the lease liabilities was based on the Company’s incremental borrowing rate.

As of September 30, 2025, the Company's operating leases have remaining lease terms of up to 5 years, some of which include optional renewals or terminations, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. Any variable payments related to the lease will be recorded as lease expense when and as incurred. Variable payments are not based on an index or rate and relate to common area maintenance or ATM relocation expenses. As of September 30, 2025, the operating leases that have been contracted for but have not yet commenced are immaterial.

The components of operating lease cost recognized in the condensed consolidated financial statements were as follows (in thousands): 

	For the three months ended				For the nine months ended
(in thousands)	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Operating lease cost	$	4,123	$	2,892	$	11,290	$	8,150
Short term lease cost		65		505		216		1,201
Variable lease cost		162		114		2,090		341
Total lease cost	$	4,350	$	3,511	$	13,596	$	9,692

The reconciliation of future lessee lease payments under noncancelable operating leases in which the Company has a lease liability, reflected in the Company’s condensed consolidated balance sheets as of September 30, 2025 is presented in the table below (in thousands): 

	Operating Leases
2025	$	3,733
2026		13,826
2027		11,698
2028		8,792
2029		3,767
hereafter		1,135
Total lease payments	$	42,951
Less: Imputed interest		(9,300	)
Present value of lease liabilities	$	33,651

Finance Leases

On November 2, 2023, the Company entered into a finance lease with Taproot, in which the Company agreed to lease certain Bitcoin ATMs over a three-year term, with the expectation that the Company will take title of the Bitcoin ATMs prior to the end of the term. As a result of the anticipated transfer of ownership, this meets the definition of a Finance Lease under ASC 842.

Financing lease expense is comprised of both interest expense, which will be recognized using the effective interest method, and amortization of the right-of-use assets. These finance lease expenses are presented consistently with other interest expense and amortization or depreciation of similar assets. In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

The discount rates used in measuring the lease liabilities was based on the Company’s incremental borrowing rate.

The components of finance lease cost recognized in the condensed consolidated financial statements were as follows (in thousands): 

	For the three months ended				For the nine months ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Amortization of right-of-use-assets	$	–	$	87	$	–	$	262
Interest on lease liabilities		–		29		–		110
Total finance lease expense	$	–	$	116	$	–	$	372