RUM Group Inc. (RUM)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with RUM Group Inc’s (“RUM” or the “Company”) unaudited condensed consolidated interim financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “1A. Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report and those discussed in our other filings with the SEC. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.

Overview

RUM Group Inc. (“RUM” or the “Company”) is a holding company that operates an online video platform and a cloud and AI infrastructure business. The Company’s video platform enables creators to manage, distribute, and monetize their content by connecting them with brands, publishers, and directly to their subscribers and followers. The Company’s cloud and AI infrastructure business provides compute, data center capacity, and related blockchain infrastructure services. Our registered office is 444 Gulf of Mexico Drive, Longboat Key, Florida, 34228. Our shares of Class A common stock and warrants are traded on The Nasdaq Global Market (“Nasdaq”) under the symbols “RUM” and “RUMBW”, respectively.

Significant Events and Transactions

On February 7, 2025, Tether, the largest company in the digital assets industry and the most widely used dollar stablecoin across the world, purchased 103,333,333 shares of the Company’s Class A Common Stock at a price per share of $7.50, totaling $775 million in gross proceeds to the Company. As part of the closing of this transaction, the Company completed a tender offer to purchase 70,000,000 shares of its Class A Common Stock at a price of $7.50 per share for a total of $525 million, excluding fees and expenses related to the tender offer.

On November 10, 2025, the Company announced a $100 million advertising commitment from Tether, representing $50 million advertising commitment per year over a two-year period beginning in the first quarter of 2026.

On June 4, 2026, the Company announced that it had entered into a multi-year agreement under which Together AI will purchase dedicated GPU cloud capacity powered by NVIDIA HGX B300 systems.

On June 17, 2026, the Company announced the closing of the acquisition of Northern Data, a leading provider of AI and high-performance computing (HPC) infrastructure. Following the closing of this acquisition, the Company acquired approximately 85% of Northern Data’s outstanding shares. Refer to Note 3, Business Combinations, to our condensed consolidated interim financial statements included elsewhere in this Quarterly Report.

Given favorable market conditions and Northern Data’s reported near capacity GPU utilization, the Company and Tether mutually agreed not to enter into the customer agreement originally contemplated by the Tether transaction support agreement, dated November 10, 2025, by and between the Company and Tether, which would have provided for the purchase by Tether of GPU services in an amount up to $75 million per year over a two-year initial term at a fixed price per GPU hour, which price would have represented a significant discount to current prevailing GPU rates.

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Revenues

We generate revenues from Audience Monetization and Other Initiatives.

Audience Monetization includes advertising fees on the Rumble platform; subscription fees earned primarily from consumer product offerings such as Rumble Premium; Locals and badges; revenues generated from content that is licensed by third parties; pay-per-view; and fees from tipping and platform hosting fees. Advertising fees are generated by delivering digital video and display advertisements as well as cost-per-message-read advertisements.

Other Initiatives includes digital advertisements that are placed on the Company’s network of third-party publisher websites or mobile applications; and cloud. Cloud includes cloud computing and infrastructure services, including colocation services, together with professional services and license agreements related to Rumble Player.

Refer to Note 2, Summary of Significant Accounting Policies, to the Company’s condensed consolidated interim financial statements included in the Quarterly Report and annual consolidated financial statements for the year ended December 31, 2025 (the “Annual Financial Statements”).

Expenses

Expenses primarily include cost of services, general and administrative, research and development, sales and marketing, acquisition-related transaction costs, amortization and depreciation, and change in fair value of digital assets. The most significant components of our expenses on an ongoing basis are programming and content, service provider costs, and staffing-related costs.

We expect to continue to invest substantial resources to support our growth and anticipate that each of the following categories of expenses will increase in absolute dollar amounts for the foreseeable future.

Cost of Services (Exclusive of Amortization and Depreciation)

Cost of services consists of costs related to obtaining, supporting and hosting the Company’s product offerings. These costs primarily include:

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our executives and certain other employees. General and administrative expenses also include legal and professional fees, business insurance costs, operating lease costs and other costs. As a public company, we expect to continue to incur material costs related to compliance with applicable laws and regulations, including audit and accounting fees, legal, insurance, investor relations and other costs.

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Research and Development Expenses

Research and development expenses consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees on our engineering and development teams. Research and development expenses also include consultant fees related to our development activities to originate, develop and enhance our platforms.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees associated with our sales and marketing functions. Sales and marketing expenses also include consultant fees and direct marketing costs related to the promotion of our platforms and solutions. We expect our sales and marketing expenses to increase over time as we promote our platform and brand, increase marketing activities, and grow domestic and international operations.

Acquisition-related Transaction Costs

Acquisition-related transaction costs consist of professional fees and other expenses incurred in connection with acquisition-related initiatives.

Amortization and Depreciation

Amortization and depreciation represent the recognition of costs of assets used in operations, including property and equipment and intangible assets, over their estimated service lives.

Change in Fair Value of Digital Assets

Changes in fair value of digital assets reflect gains or losses arising from the remeasurement of our bitcoin investment.

Non-Operating Income and Other Items

Interest Income (Expense)

Interest income consists of interest earned on our cash and cash equivalents, which we invest in highly liquid instruments such as money market funds, treasury bills and term deposits, together with interest from other investment arrangements. Interest expense primarily relates to our note payable and other borrowing arrangements.

Other Income (Expense)

Other income (expense) consists of miscellaneous income earned and expenses incurred outside of the normal course of business as well as foreign exchange gains and losses on transactions denominated in currencies other than the respective entities’ functional currencies.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration reflects gains or losses arising from the periodic remeasurement of the contingent consideration receivable recognized in connection with the acquisition of Northern Data.

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Change in Fair Value of Warrant Liability

We account for our outstanding warrants in accordance with ASC 815-40, under which the warrants issued in connection with the Business Combination do not meet the criteria for equity classification, and must be recorded as liabilities. As these warrants meet the definition of a liability under ASC 815, they are measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, with any subsequent changes in fair value recognized in the consolidated statement of operations in the applicable period of change.

Change in Fair Value of Derivative

The forward purchase contracts, as well as the embedded derivatives in both the notes payable and the funding arrangement, do not meet the criteria for equity classification and must be recorded as liabilities in accordance with guidance contained in ASC 815-40, Derivatives and Hedging Contracts in Entity’s Own Equity (“ASC 815-40”). Because these derivatives meets the definition of a liability under ASC 815, Derivatives and Hedging (“ASC 815”), they are measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, Fair Value Measurement (“ASC 820”), with any subsequent changes in fair value recognized in the consolidated statement of operations in the applicable period of change.

Income Tax (Expense) Benefit

Income tax (expense) benefit consists of the estimated federal, state, and foreign income taxes incurred in the U.S. and other jurisdictions in which we operate.

Deferred Tax (Expense) Benefit

Deferred tax (expense) benefit represents the net change in our deferred tax assets and liabilities. It arises from temporary differences between the financial reporting bases and tax bases of assets and liabilities, as well as from net operating loss carryforwards and other tax attributes.

Key Business Metrics

To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we have historically used the key business metrics described below. See “Transition of Key Business Metrics” below for further information relating to our reporting of these metrics in future periods.

Monthly Active Users (“MAUs”)

We use MAUs as a measure of audience engagement to help us understand the vo

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Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations

The following “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the “Business”
section and Rumble Inc.’s (“Rumble” or the “Company”) consolidated financial statements as of and for the
years ended December 31, 2025 and 2024 (“consolidated financial statements”) and other information included elsewhere in this
Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ
materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited
to, those identified below and those discussed in the sections titled “1A. Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” included elsewhere in this Annual Report and those discussed in our other filings with the SEC. Additionally,
our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented
in U.S. dollars.

Overview

We are a high growth, video
sharing and cloud services provider platform designed to help content creators manage, distribute, and monetize their content by connecting
them with brands, publishers, and directly to their subscribers and followers. Our registered office is 444 Gulf of Mexico Drive, Longboat
Key, Florida, 34228. Our shares of Class A common stock and warrants are traded on Nasdaq under the symbols “RUM” and “RUMBW”,
respectively.

Significant Events and Transactions

On February 7, 2025, Tether,
the largest company in the digital assets industry and the most widely used dollar stablecoin across the world, purchased 103,333,333
shares of Class A Common Stock at a price per share of $7.50, totaling $775 million in gross proceeds to Rumble. As part of the closing
of the transaction, the Company completed a tender offer to purchase 70,000,000 shares of its Class A Common Stock at a price of $7.50
per share for a total of $525 million, excluding fees and expenses related to the tender offer.

On November 10, 2025, the
Company entered into the ND Business Combination Agreement. Subject to the satisfaction or waiver of the terms and conditions of the ND
Business Combination Agreement, the Company will submit the Exchange Offer to all shareholders of Northern Data to
acquire each Northern Data Share in exchange for certain shares of Class A Common Stock. Each Northern Data Share that is validly
tendered and accepted for exchange will be exchanged for 2.0281 newly
issued shares of our Class A Common Stock (with customary settlement mechanisms for fractional shares), subject
to the satisfaction or waiver of the conditions to the Exchange Offer.

Tether, along with an affiliate
of Northern Data’s current co-CEO (Aroosh Thillainathan) and another significant shareholder, collectively holding approximately
70% of the outstanding Northern Data Shares, have entered into the Transaction Support Agreements pursuant to which they will exchange
their Northern Data Shares at the same Exchange Ratio contemporaneously with the closing of the Exchange Offer.

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The launch of the Exchange
Offer is expected to occur during the second quarter of 2026. The ND Business Combination is expected to close in the second quarter of
2026, subject to satisfaction of closing conditions and regulatory approvals.

Additionally, the Company
has entered into a significant agreement with Tether, which includes an initial commitment by Tether to purchase up to $150 million of
GPU services over a two-year period following the closing of the ND Business Combination.

The Company also announced
a $100 million advertising commitment from Tether, representing $50 million per year over a two-year period beginning in the first quarter
of 2026. This commitment is not contingent upon the completion of the ND Business Combination.

Revenues

We generate revenues from
Audience Monetization and Other Initiatives.

Audience Monetization includes
advertising fees on the Rumble platform; subscription fees earned primarily from consumer product offerings such as Rumble Premium; Locals
and badges; revenues generated from content that is licensed by third-parties; and fees from tipping and platform hosting fees. Advertising
fees are generated by delivering digital video and display advertisements as well as cost-per-message-read advertisements.

Other Initiatives includes
digital advertisements that are placed on Rumble’s network of third-party publisher websites or mobile applications; and cloud.
Cloud includes consumption-based fees, subscriptions for infrastructure and professional services, and license agreements related to Rumble
Player.

Refer to Note 2, Summary
of Significant Accounting Policies, under “Item 8. Financial Statements and Supplementary Data.”

Expenses

Expenses primarily include
cost of services, general and administrative, research and development, sales and marketing, acquisition-related transaction costs, amortization
and depreciation, change in fair value of digital assets, and change in fair value of contingent consideration. The most significant components
of our expenses on an ongoing basis are programming and content, service provider costs, and staffing-related costs.

We expect to continue to invest
substantial resources to support our growth and anticipate that each of the following categories of expenses will increase in absolute
dollar amounts for the foreseeable future.

Cost of Services (Exclusive of Amortization
and Depreciation)

Cost of services consists
of costs related to obtaining, supporting and hosting the Company’s product offerings. These costs primarily include:

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General and Administrative Expenses

General and administrative
expenses consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our executives and
certain other employees. General and administrative expenses also include legal and professional fees, business insurance costs, operating
lease costs and other costs. As a public company, we expect to continue to incur material costs related to compliance with applicable
laws and regulations, including audit and accounting fees, legal, insurance, investor relations and other costs.

Research and Development Expenses

Research and development expenses
consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees on our engineering
and development teams. Research and development expenses also include consultant fees related to our development activities to originate,
develop and enhance our platforms.

Sales and Marketing Expenses

Sales and marketing expenses
consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees associated with
our sales and marketing functions. Sales and marketing expenses also include consultant fees and direct marketing costs related to the
promotion of our platforms and solutions. We expect our sales and marketing expenses to increase over time as we promote our platform
and brand, increase marketing activities, and grow domestic and international operations.

Acquisition-Related Transaction Costs

Acquisition-related transaction
costs consist of professional fees and other expenses incurred in connection with acquisition-related initiatives.

Amortization and Depreciation

Amortization and depreciation
represent the recognition of costs of assets used in operations, including property and equipment and intangible assets, over their estimated
service lives.

Change in Fair Value of Digital Assets

Change in fair value of digital
assets reflects gains or losses arising from the remeasurement of our bitcoin investment.

Change in Fair Value of Contingent Consideration

Certain contingent consideration
associated with the Callin acquisition does not meet the criteria for equity classification, and must be recorded as a liability in accordance
with guidance contained in ASC 815-40, Derivatives and Hedging Contracts in Entity’s Own Equity (“ASC 815-40”).
Because the contingent consideration meets the definition of a liability under ASC 815, Derivatives and Hedging (“ASC 815”),
it is measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, Fair Value Measurement
(“ASC 820”), with any subsequent changes in fair value recognized in the consolidated statements of operations in the
applicable period of change.

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Non-Operating Income and Other Items

Interest Income

Interest income consists of
interest earned on our cash and cash equivalents. We invest in highly liquid securities such as money market funds, treasury bills and
term deposits.

Other Income (Expense)

Other income (expense) consists
of miscellaneous income earned and expenses incurred outside of the normal course of business as well as foreign exchange gains and losses
on transactions denominated in currencies other than the U.S. dollar.

Change in Fair Value of Warrant Liability

We account for our outstanding
warrants in accordance with ASC 815-40, under which the warrants issued in connection with the ND Business Combination do not meet the
criteria for equity classification, and must be recorded as liabilities. As these warrants meet the definition of a liability under ASC
815, they are measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, with any subsequent
changes in fair value recognized in the consolidated statements of operations in the applicable period of change.

Change in Fair Value of Derivative

The forward purchase contracts
in connection with the Tether transaction do not meet the criteria for equity classification, and must be recorded as a liability in accordance
with guidance contained in ASC 815-40. Because the derivative meets the definition of a liability under ASC 815, it is measured at fair
value at inception and at each reporting date in accordance with the guidance in ASC 820, with any subsequent changes in fair value recognized
in the consolidated statements of operations in the applicable period of change.

Income Tax Benefit (Expense)

Income tax benefit (expense)
consists of the estimated federal, state, and foreign income taxes incurred in the U.S. and other jurisdictions in which we operate.

Key Business Metrics

To analyze our business performance,
determine financial forecasts and help develop long-term strategic plans, we review the key business metrics described below.

Monthly Active Users

We use MAUs as a measure of
audience engagement to help us understand the volume of users engaged with our content on a monthly basis. MAUs represent the total web,
mobile app, and connected TV users of Rumble for each month, which allows us to measure our total user base calculated from data provided
by Google, a third-party analytics provider. Google defines “active users” as the “[n]umber of distinct users who visited
your website or application.” We have used the Google analytics systems since we first began publicly reporting MAU statistics,
and the resulting data have

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