What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-12-11 · 284 added, 337 removed, 10 unchanged (98% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations .

References in this Item 2

to “we,” “us” or “Pubco” refer to the Company.

References to our “management” or our “management

team” refer to our officers and directors.

The following discussion and analysis of the Company’s financial condition and

results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere

in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements

that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (the “Quarterly Report”), and some of the

information incorporated herein by reference, contains “forward-looking statements” within the meaning of Section 27A of the

Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended

(“Exchange Act”).

All statements other than statements of historical facts contained in this Quarterly Report, including statements

regarding the financial position, business strategy and the plans and objectives of management for our future operations, are forward-looking

When used in this Quarterly Report, the words “believes,” “estimates,” “expects,” “projects,”

“forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,”

“anticipates” or “intends” and variations of these words or similar expressions (or the negative versions of such

words or expressions) are intended to identify forward looking statements.

forward-looking statements in this Quarterly Report are not guarantees of future performance, conditions or results, and involve a number

of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control,

that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

These forward-looking

statements speak only as of the date of this Quarterly Report and are subject to numerous risk, including, but are not limited to, the

● our ability to realize the benefits expected from the Business Combination;

● our limited operating history, which may make it difficult to successfully execute its strategic initiatives

and accurately evaluate future risks and challenges;

● our ability to maintain listing of the Company’s securities on Nasdaq;

● the price and volatility of Bitcoin;

● the potential impact of a prolonged government shutdown;

● our ability to implement our Bitcoin treasury strategy and its effects on our business;

● changes in applicable laws and regulations;

● our ability to manage growth;

● the nature and degree of our competition;

● the general volatility of the capital markets and the establishment of a market for our shares;

● our ability to raise additional capital is necessary to sustain our anticipated operations and implement

our business plan;

● the loss of one or more of the Company’s executive officers and other key employees;

● failure to hire and retain qualified employees;

● failure to comply with federal, state and local laws and regulations;

● risk related to global economic and societal disruptions from the impact of part 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.

forward-looking statements are subject to a number of risks, uncertainties and assumptions.

We operate in an evolving environment.

risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information,

future events or otherwise, except as required by law.

should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from

what we except.

We qualify all of our forward-looking statements by these cautionary statements.

The following discussion and

analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements

and the notes thereto included in this Quarterly Report under Item 1.

“Financial Statements”.

Pubco was incorporated on June 17, 2025, as a

Delaware corporation, solely for the purpose of effectuating the Business Combination as described herein.

Pubco has no material assets

and does not operate any business.

On June 17, 2025, Pubco issued one (1) share of common stock to Mr.

Anthony Pompliano for nominal consideration.

This share of common stock represents all shares in the capital of Pubco that are issued and outstanding as of September 30, 2025.

has two wholly owned subsidiaries, Crius SPAC Merger Sub, Inc., a Delaware corporation (“SPAC Merger Sub”) and Crius Merger

Sub, LLC, a Delaware limited liability company (“Company Merger Sub”).

Merger Sub was incorporated on June 18, 2025 solely for the purpose of effectuating the Business Combination (as described below).

Merger Sub has no material assets and does not operate any business.

Prior to the consummation of the Business Combination, the sole

director of SPAC Merger Sub is Mr.

Anthony Pompliano, and the sole stockholder of SPAC Merger Sub is Pubco.

Merger Sub was formed on June 17, 2025 solely for the purpose of effectuating the Business Combination.

Company Merger Sub owns no material

assets and does not operate any business.

Prior to the consummation of the Business Combination, the sole member of the board of managers

of Company Merger Sub is Mr.

Anthony Pompliano, and the sole member of Company Merger Sub is Pubco.

Business Combination and Recent Developments

Combination Agreement

June 23, 2025 (the “ Execution Date ”), Columbus Circle Capital Corp I, a Cayman Islands exempted company (“ CCCM ”),

Pubco, SPAC Merger Sub, Company Merger Sub, ProCap BTC, LLC, a Delaware limited liability company (“ ProCap ”) and Inflection

Points Inc d/b/a Professional Capital Management, a Delaware corporation (the “ Professional Capital Management ”), entered

into a business combination agreement (the “ Business Combination Agreement ” and, together with the Convertible Note

Financing (as defined below), the Preferred Equity Investment (as defined below) and other transactions contemplated by the Business

Combination Agreement, the “ Business Combination ”).

to the Business Combination Agreement, and subject to the terms and conditions set forth therein, (i) at least one business day prior

to the closing (the “ Closing ”) of the Business Combination, CCCM will de-register from the Register of Companies in

the Cayman Islands by way of continuation and re-register in the State of Delaware so as to become a Delaware corporation (the “ Conversion ”),

and (ii) upon the Closing, (x) SPAC Merger Sub will merge with and into CCCM, with CCCM continuing as the surviving entity (the “ SPAC

Merger ”), and each outstanding security of CCCM immediately prior to the effective time of the SPAC Merger will automatically

be cancelled in exchange for the right to receive substantially equivalent securities of Pubco, and (y) Company Merger Sub will merge

with and into ProCap, with ProCap continuing as the surviving entity (the “ Company Merger ”, and together with SPAC Merger,

the “ Mergers ”), and with the members of ProCap (the “ ProCap Holders ”) receiving, in exchange for their

membership interests in ProCap, shares of common stock, par value $0.0001 per share, of Pubco (“ Pubco Stock ”), including

certain adjustment shares of Pubco Stock as described below.

As a result of the Business Combination, CCCM and ProCap will become wholly-owned

subsidiaries of Pubco, and Pubco will become a publicly traded company, all in accordance with applicable law and upon the terms and

subject to the conditions set forth in the Business Combination Agreement.

consideration for the Company Merger, Professional Capital Management, which is the holder of all of the common units of ProCap (the

“ Common Units ”), will receive a number of shares of Pubco Stock equal to:

(i) 10,000,000, plus (ii) fifteen percent

(15%) of the Adjustment Shares (as defined below) (such shares, the “ Common Merger Consideration Shares ”).

consideration for the Company Merger, holders of the preferred units (the “ Preferred Units ”) of ProCap (the “ Preferred

Unit Holders ”) will receive an aggregate number of shares of Pubco Stock equal to:

(i) the product of (A) the number of Preferred

Units outstanding immediately prior to the Company Merger multiplied by (B) 1.25 plus (ii) eighty five percent (85%) of the Adjustment

Shares (the “ Preferred Merger Consideration Shares ” and together with the Common Merger Consideration Shares, the “ Merger

Consideration Shares ”).

Each Preferred Unit Holder shall receive its pro rata share of the Preferred Merger Consideration Shares,

based on the number of Preferred Units owned by such Preferred Unit Holder immediately prior to the Closing.

“ Adjustment Shares ” refer to a number of shares of Pubco Stock equal to (i) the product of (A) (I) the quotient obtained

by dividing (x) the price of one Bitcoin as determined by the average of the CME CF Bitcoin Reference Rate - New York Variant (the “ Reference

Rate ”) for the ten (10)-day period ending on the third (3rd) business day prior to the Closing Date (the “ Closing Bitcoin

Price ”), subject to a maximum price of $200,000 by (y) the time weighted average price for the period of time during which the

Purchased Bitcoin by ProCap using the proceeds from the Preferred Equity Investment (as defined below) was acquired (the “ Signing

Bitcoin Price ”) (II) minus 1, multiplied by (B) $516.5 million, divided by (ii) $10.00.

Equity Subscription Agreement

the Execution Date and in connection with the Business Combination Agreement, certain “qualified investors” (defined to include

“qualified institutional buyers” (“ QIBs ”), as defined in Rule 144A of the Securities Act, and institutional

“accredited investors”, as defined in Rule 501 of Regulation D) (the “ Preferred Equity Investors ”) each entered

into a Preferred Equity Subscription Agreement (collectively, the “ Preferred Equity Subscription Agreements ”) with CCCM,

Pubco and ProCap, pursuant to which the Preferred Equity Investors subscribed to purchase an aggregate of 51,650,000 non-voting preferred

units of ProCap (“Preferred Units”), at a purchase price of $10.00 per unit in a private placement, for an aggregate amount

of $516.5 million of such Preferred Units (the “ Preferred Equity Investment ”).

Additionally, each Preferred Equity Investor

executed a joinder agreement to that certain Limited Liability Company Operating Agreement of ProCap, dated as of June 22, 2025, by and

among ProCap and the members identified therein (the “ LLC Agreement ”), pursuant to which each Preferred Equity Investor

accepted the rights, duties and obligations set forth in the LLC Agreement and became a preferred member of ProCap (each, a “ Preferred

Unitholder ”).

used all of the proceeds from the Preferred Equity Investment to purchase Bitcoin (the “ Purchased Bitcoin ”), and such

Purchased Bitcoin is held in a custody account in accordance with a custody agreement by and between ProCap and Anchorage Digital Bank,

N.A., as custodian (“ Anchorage ”), until the Closing, upon which time it will be contributed to Pubco.

If the Closing

does not occur, the Preferred Equity Investors will have the right to receive their respective pro rata portion of the Purchased Bitcoin

or may elect to liquidate their pro rata portion of the Purchased Bitcoin for cash.

to the Preferred Equity Subscription Agreements, Procap agreed to use commercially reasonable efforts to register the offer and sale

of Pubco Stock, into which the Preferred Units will be converted pursuant to the Business Combination Agreement upon the Closing, on

the Registration Statement.

To the extent that any such shares of Pubco Stock are unable to be included in the Registration Statement,

Pubco agreed to certain customary resale registration rights, including that, within 45 calendar days after the Closing, Pubco will file

with the SEC (at Pubco’s sole cost and expense) a registration statement registering the offer and resale of such Pubco Stock (the “ Resale

Registration Statement ”), and Pubco shall use its commercially reasonable efforts to have the Resale Registration Statement

declared effective as soon as practicable after the filing thereof, but no later than 60 calendar days after the Closing, which may be

extended an additional 30 calendar days upon certain circumstances.

Capital Management and ProCap entered into an Investment Consulting and Marketing Services Agreement (the “ Services Agreement ”)

on the Execution Date.

Pursuant to the Services Agreement, Professional Capital Management agreed to provide certain services to ProCap,

with the services provided pursuant to statements of work.

The Services Agreement has a term of four (4) years following the Execution

Date and will automatically renew for a subsequent one (1) year terms, unless either party gives the other party at least sixty (60)

days’ prior written notice of non-renewal or otherwise terminates the Services Agreement or any statement of work as set forth therein.

In consideration for the services and work performed under the Services Agreement, ProCap BTC issued an aggregate of 10,000,000 Common

Units of ProCap (the “Common Units”) to Professional Capital Management.

Support Agreement

Contemporaneously

with the execution of the Business Combination Agreement, CCCM entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”)

with the Columbus Circle I Sponsor Corp LLC, a Delaware limited liability company (the “ Sponsor ”) and ProCap, pursuant

to which, among other things, the Sponsor agreed to (i) vote its Class A ordinary shares and Class B ordinary shares of CCCM (collectively,

the “ Ordinary Shares ”) in favor of the Business Combination Proposed Transactions and each of the CCCM Shareholder Approval

(ii) vote its Ordinary Shares against any alternative transactions;

(iii) vote against any merger, consolidation, combination,

sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by CCCM (other than the Business

Combination);

and (iv) comply with the restrictions imposed by the Insider Letter (as defined below), including the restrictions on transfer

and redeeming CCCM Ordinary Shares in connection with the Business Combination.

Further, the parties agreed that at the Closing, they

would enter into an amendment to the letter agreement, dated as of May 15, 2025 (the “Insider Letter”) by and among the Sponsor,

CCCM, and CCCM’s directors and officers, in order to add Pubco as a party.

Sponsor Support Agreement and certain of its provisions will terminate and be of no further force or effect upon the earlier to occur

of the Closing or if the Business Combination Agreement is terminated pursuant to its terms, all provisions of the Sponsor Support Agreement

will terminate and be of no further force or effect unless otherwise specified in the Sponsor Support Agreement.

connection with the execution and delivery of the Business Combination Agreement, Professional Capital Management entered into a Lock-Up

Agreement (the “Lock-Up Agreement”) with Pubco, pursuant to which Professional Capital Management agreed that the Merger Consideration

Shares received by Professional Capital Management will be locked-up and subject to transfer restrictions, as described below, subject

to certain exceptions.

The securities held by Professional Capital Management will be locked up until the earlier of (i) six (6) months

after the date of the Closing and (ii) the date on which Pubco consummates a liquidation, merger, capital stock exchange, reorganization

or other similar transaction after the Closing which results in all of Pubco’s stockholders having the right to exchange their shares

of Pubco Stock for cash, securities or other property.

Non-Competition

Contemporaneously

with the execution and delivery of the Business Combination Agreement, Pubco, CCCM, ProCap and Mr.

Anthony Pompliano entered into a Non-Competition

and Non-Solicitation Agreement, pursuant to which, until the earlier of (i) the date that is eighteen (18) months following the Closing

Date and (ii) the date that is six (6) months after such date as Mr.

Pompliano ceases to be a Control Person of ProCap or Pubco, Mr.

Pompliano will not, directly or indirectly, become a Control Person of a public company with a primary portion of its business comprised

of pursuing a Bitcoin treasury strategy program.

For purposes of the Non-Competition Agreement, “Control Person” shall mean

(x) the chairman of a board of directors, chief executive officer or president, or (y) the owner of such equity interests or right to

acquire equity interests of a Person which entitles the holder thereof to the ability to manage or control such Person.

Notes Subscription Agreement

connection with the execution of the Business Combination Agreement, certain qualified investors (the “ Convertible Note Investors ”)

each entered into a subscription agreement (collectively, the “ Convertible Note Subscription Agreements ”) with the ProCap,

Pubco and CCCM pursuant to which, upon the Closing (the “Issuance Date”), the Convertible Note Investors agreed to purchase

convertible notes issued by Pubco (“ Convertible Notes ”), in an aggregate principal amount of $235 million, for an aggregate

purchase price equal to 97% of the aggregate principal amount of the Convertible Notes (the “ Convertible Note Financing ”).

The Convertible Note Financing will be funded and contingent upon the Closing.

Convertible Notes will have a 130% conversion rate, zero interest rate, maturity of up to 36 months, and will be one (1) time collateralized

by cash, cash equivalents or two (2) times certain Bitcoin assets or a combination of both.

Bank National Trust, N.A.

as collateral agent and trustee with regard to the Convertible Notes and associated indenture and security arrangements.

Proceeds from

the Convertible Note Financing are expected to be utilized by Pubco for purposes of acquiring additional Bitcoin and for working capital

Prior to the Closing, the parties intend to take actions necessary for the Convertible Notes to have an associated 144A CUSIP

number to facilitate the possibility of future post-Closing trading amongst QIBS;

however, the Convertible Notes are not expected to

otherwise be registered or tradeable.

addition, Pubco and CCCM shall have the option to increase the number of Convertible Notes available (such notes, the “Upsize Notes”)

for purchase after the date set forth in the Convertible Note Subscription Agreement (the “Upsize Option”).

Pubco and CCCM

may elect to exercise the Upsize Option one time prior to the Closing.

If Pubco and CCCM exercise the Upsize Option, each Convertible

Note Investor shall have a right of first refusal to purchase its pro rata portion of the Upsize Notes.

Each Convertible Note Investor’s

pro rata portion will be calculated based on the Convertible Note Investor’s subscription amount relative to the aggregate subscription

amount of all of the initial Convertible Note Investors as of the Execution Date, on the same terms and conditions as those offered in

the Convertible Notes Subscription Agreement.

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

thousands, except share, per share data , Bitcoin, and per Bitcoin data )

the context otherwise requires, all references in this section to the “Company,” “ProCap,” “we,”

“us,” or “our” refer to ProCap Financial, Inc., a Delaware corporation, and its subsidiaries.

The following

discussion and analysis of the financial condition and results of operations of the Company should be read together with our

unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report for the

three months ended March 31, 2026 (the “Unaudited Condensed Consolidated Financial Statements”)the Annual Report on Form

10-K filed on February 18, 2026 (the “Annual Report”), and the Definitive Proxy Statement filed on March 2, 2026 and

Risk Factors contained therein.

This discussion contains forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section

21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements

on our current expectations and projections about future events.

These forward-looking statements are subject to known and unknown risks,

uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially

different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”

“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”

and “continue,” or the negative of such terms or other similar expressions.

Such statements include, but are not limited

to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements

of historical fact included in this Form 10-Q.

Factors that might cause or contribute to such a discrepancy include, but are not limited

to, those described in our other SEC filings.

Except as expressly required by applicable securities law, we disclaim any intention or

obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

in 2025, we are a U.S.-based, modern finance company.

Our mission is to help independent investors make money.

We initially launched

with Bitcoin-focused media products and Bitcoin holdings on our balance sheet.

We believe that Bitcoin represents a superior long-term

store of value and a viable alternative to traditional fiat-based reserve assets and that Bitcoin will play an increasingly important

role as a reserve asset for individuals, corporations, and governments worldwide.

A key objective of ours is to support the broader Bitcoin

information ecosystem, including through audio podcasts, video interviews, and text-based articles designed to help individuals and organizations

understand Bitcoin’s significance and utility of its mission.

To support our operations, we have initiated its plan to accumulate

and hold Bitcoin as a long-term treasury reserve asset.

Our business is also built upon a foundational belief that advances in

artificial intelligence (“AI”) may enable more scalable and efficient tools for portfolio analysis, financial planning, and

investor decision support.

Consistent with this approach, we expect to increasingly rely on software-based systems and automated processes

as part of our operating model.

2026, we added strategies related to the use of AI and automation to support the development and delivery of financial products and services,

including the launch of ProCap Insights and the acquisition of CFO Silvia, Inc, a Delaware corporation (“CFO Silvia”).

The Company launched ProCap Insights, the first

agentic research platform in finance, in April 2026.

Leveraging the latest AI technology, ProCap aims to deliver institutional-grade

research to help independent investors make more informed investment decisions.

Silvia has developed a consumer-facing AI platform that aggregates and organizes financial data to provide users with automated financial

education, tracking and analytical tools.

The CFO Silvia platform connects to financial account integrations, including brokerage accounts,

retirement accounts, crypto currency wallets, real estate valuation services, and alternative investment platforms, to deliver users

a consolidated, real-time view of their net worth, holdings and liabilities.

platform utilizes AI-driven analytical tools to perform portfolio tracking, concentration analysis, fee analysis, scenario modeling,

and informational financial summaries through a conversational interface accessible via chat, email, and voice.

The platform is designed

to surface potential portfolio risks, including sector or asset class overconcentration, elevated fee structures, and inefficient cash

The platform does not provide personalized investment advice within the meaning of the Investment Advisers Act of 1940 and

is not intended to serve as a registered investment adviser or replace the judgment of a qualified financial professional.

AI and Regulatory Uncertainty

The Company’s AI-related initiatives are subject to evolving regulatory, technological, and competitive conditions,

including uncertainty regarding data privacy, consumer protection, intellectual property, and the use of automated financial analysis

December 5, 2025, we completed a business combination with Columbus Circle Capital Corp I (“CCCM”), a special purpose acquisition

company, resulting in the Company becoming a publicly traded entity.

The transaction was accounted for as a reverse recapitalization

in accordance with U.S.

GAAP, with our company being deemed the accounting acquirer.

connection with the transaction:

ProCap equity holders received an aggregate of approximately 74.6 million shares of the Company’s common stock (after applying

the exchange ratio, including preferred unit conversion).

shareholders received approximately 10.6 million shares, after significant redemptions.

common shares outstanding immediately following the transaction were approximately 85.2 million.

proceeds from the transaction were approximately $12.2 million, after redemptions and transaction costs.

a result of the reverse recapitalization:

historical financial statements of ProCap became those of the Company.

prior-period equity amounts and share counts have been retroactively restated to reflect the exchange ratio established in the transaction.

Additionally, previously issued public and private

placement warrants of CCCM remained outstanding and became warrants of the Company.

We are an early-stage company with a limited operating history.

As a result, investors should consider the risks associated with

evaluating our Company with limited historical financial information and evolving operations, as described in Part I, Item 1A.

“ Risk Factors ” of our Annual Report.

of March 31, 2026, our material asset consists primarily of approximately 5,457 Bitcoin with a fair value of $372.3 million.

Notes Repurchase

February 9, 2026, we entered into privately negotiated note repurchase agreements (the “Repurchase Agreements”) with certain

holders (the “Noteholders”) of our outstanding 0.00% Convertible Senior Secured Notes due 2028 (the “Convertible Notes”)

under the Indenture, pursuant to which we agreed to repurchase approximately $135.4 million in aggregate principal amount of the Convertible

Notes held by the Noteholders for an aggregate of approximately $119.2 million in cash (the “Repurchase”).

Repurchase settled on or about February 10, 2026.

Upon settlement of the Repurchase, the aggregate principal amount of the Convertible

Notes outstanding was reduced to approximately $99.6 million.

Repurchase Program

December 9, 2025, the board of directors of the Company (the “Board”) approved a share repurchase program (the

“2025 Repurchase Program”) providing for the repurchase of up to $100 million of our outstanding shares of common stock,

par value $0.001 (“Common Stock”).

Under the 2025 Repurchase Program, we are authorized to repurchase shares of Common

Stock through open market purchases, privately-negotiated transactions, accelerated share repurchases, or otherwise in accordance

with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act.

2025 Repurchase Program does not obligate us to repurchase shares of Common Stock and the specific timing and amount of repurchases

will vary based on available capital resources and other financial and operational performance metrics, market conditions,

securities law limitations and other factors.

connection with the 2025 Repurchase Program, on December 12, 2025, we entered into an Open Market Share Repurchase Agreement (the “Repurchase

Agreement”) with TD Securities Inc.

(the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on

behalf of us to repurchase shares of Common Stock in the open market pursuant to Rule 10b5-1 and Rule 10b-18 of the Exchange Act.

Repurchase Agreement will continue in effect until terminated by either us or the Broker, with or without cause, upon written notice

to the other party.

We will pay the Broker a commission at a rate of $0.01 for each share of Common Stock repurchased pursuant to the

Repurchase Agreement.

the quarter ended March 31, 2026, we repurchased 2,667,056 shares of Common Stock in the open market for approximately $8.0 million including

commissions, at an average price of $3.00 per share.

$89 million remains under the approved 2025 Repurchase Program.

with CFO Silvia

April 6, 2026, we completed our previously announced acquisition of CFO Silvia pursuant to the Agreement and Plan of Merger dated February

9, 2026 (the “Merger”).

Following the closing, CFO Silvia became our wholly owned subsidiary.

The transaction was approved

by our stockholders on March 27, 2026.

merger consideration consisted of approximately 7.5 million shares of our Common Stock issued at closing, after adjustment for certain

unpaid liabilities, 0.9 million shares placed in escrow to secure indemnification obligations for a period of twelve months, and up to

9.0 million additional shares issuable as earnout consideration upon achievement of specified stock price-based performance conditions

during the five-year period following the closing date.

acquisition reflects our previously announced strategic focus on AI operations while continuing our Bitcoin treasury strategy.

in the second quarter of 2026, the results of CFO Silvia will be included in our consolidated financial statements.

The transaction resulted

in acquisition-related and integration costs and may result in additional dilution if the earnout conditions are achieved and the related

shares are issued.

connection with the transaction, we also entered into related ancillary agreements, including escrow, lock-up, registration rights and

restrictive covenant arrangements.

Additional information regarding the acquisition and related agreements is included in our Current

Report on Form 8-K filed on April 6, 2026.

of Operations

following table sets forth a summary of Pubco’s results of operations.

This information should be read together with Pubco’s consolidated

financial statements and related notes.

For the three

For the period

from June 17,

2025 (inception)

September 30,

Operating expenses

General and administrative

Loss from operations

The Company was incorporated on June 10, 2025 and therefore no comparable prior-year interim period exists for the

three months ended March 31, 2026.

following table sets forth a summary of our results of operations:

and administrative

from operations

income (expense):

in fair value of digital assets

in fair value of Convertible Notes conversion feature

in fair value of sold put option liability

on extinguishment of debt

and dividend income

loss before taxes

for the three months ended March 31, 2026, was $1 and not material to overall results.

The Company has not yet demonstrated an ability

to generate sustainable or predictable revenue, and there can be no assurance that it will do so in the future.

The Company has

not yet established material recurring revenue streams and expects operating results to depend on its ability to scale its AI and financial

technology platforms, increase user adoption, and develop monetization revenues or profitability.

and Administrative Expenses

and administrative expenses consist of various costs, such as professional fees.

For the period from June 17, 2025 (inception) through

September 30, 2025, there was $329,471 of general and administrative expenses and $319,048 for the three months ended September 30, 2025.

and administrative expenses consist primarily of personnel-related costs, professional fees, and other corporate overhead expenses.

the three months ended March 31, 2026, general and administrative expenses totaled $4,059.

Personnel-related costs included $730 of salary

and bonus expense.

Professional fees totaled $1,781 and were primarily attributable to legal, accounting and auditing, advisory, and

other professional services, incurred in part due to the acquisition of CFO Silvia, as well as costs associated with being a public company.

The remaining general and administrative expenses consisted of insurance, technology, facilities, and other corporate costs incurred

during the period.

Income (Expense)

income (expense) for the three months ended March 31, 2026, was a net expense of $99,968 primarily driven by changes in fair value of

digital assets, realized loss on put option liability, and interest expense, offset by change in fair value of Convertible Notes conversion

feature, a gain on extinguishment of debt, and interest and dividend income.

recognized an unrealized loss of $105,467 related to changes in the fair value of our digital asset holdings.

These losses were driven

by volatility in Bitcoin market prices during the period and reflect the Company’s strategy of holding Bitcoin as a primary treasury

reserve asset, which subjects results of operations to significant market price fluctuations.

Because unrealized gains and losses are recognized in earnings, the Company ’s

reported operating results may vary significantly between periods and may not be indicative of underlying operating performance or cash

income included $838 related to a gain on the change in the fair value of the conversion feature embedded in the Company’s Convertible

Notes and a gain on debt extinguishment of $5,933.

expenses included $914 related to a realized loss on the put option liability.

expense, totaled $1,100, primarily attributable to amortization of capitalized financing-related costs incurred and amortization of debt

discount during the three months ended March 31, 2026.

and dividend income during the period of $742 was primarily attributable to interest and dividends earned on cash balances.

and Capital Resources

the period from June 17, 2025 (inception) through September 30, 2025, Pubco has not generated revenue and reported a net loss of $329,471.

As of September 30, 2025, Pubco had no cash on hand and a net working capital deficit of $329,471.

On July 11, 2025, the Company entered into an

amended and restated promissory note, pursuant to which Pubco and ProCap BTC, LLC, a related party, will reimburse Inflection Points,

a company under common control, for a principal sum of up to $1,000,000.

The Promissory note shall bear no interest and is payable on

the earlier of May 31, 2026 or the date of which the companies consummate the business combination, as described in Note 5.

paid by Inflection Points were initially recorded as Due to related party prior to the execution of the promissory note agreement.

On July 11, 2025, the Company entered into the promissory note agreement, at which time the Due to related party balance was converted

to a promissory note payable.

On October 5, 2025, the Company entered into the

second amended and restated the promissory note, to increase the allowable principal draws to be up to $2,000,000.

As of September 30,

2025, the Company has borrowed a total of $209,097 under the Promissory Note, which includes $108,674 proceeds from related party promissory

note and $100,423 conversion of due to related party to related party promissory note.

Pubco assesses

its liquidity in terms of its ability to generate adequate amounts of cash to meet current and future needs.

Pubco’s expected primary

uses of cash on a short and long-term basis are for working capital requirements, Bitcoin acquisitions, and other liquidity needs.

management expects that future operating losses and negative operating cash flows may increase from current levels because of additional

costs and expenses related to the business operations and the development of market and strategic relationships with other businesses.

future capital requirements will depend on many factors, including the timing of the consummation of the Business Combination.

to finance these opportunities, Pubco will likely need to raise additional financing.

Until such time, if ever, that Pubco can generate

revenue sufficient to achieve profitability, Pubco intends to raise such capital through issuances of additional Pubco Stock and/or the

issuance of debt.

To the extent that Pubco raises additional capital through the sale of equity or convertible debt securities, the ownership

interest of Pubco’s stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that

adversely affect the rights of holders of Pubco Stock.

If additional financing is required from outside sources, Pubco may not be able

to raise such capital on terms acceptable to it or at all.

If Pubco is unable to raise additional capital when desired, Pubco’s business,

results of operations and financial condition would be materially and adversely affected.

a result of the above, in connection with Pubco’s assessment of going concern considerations in accordance with Financial Accounting

Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosures of Uncertainties about an Entity’s

Ability to Continue as a Going Concern , management has determined that Pubco’s liquidity condition raises substantial doubt about

its ability to continue as a going concern through twelve months from the date these financial statements are available to be issued.

Flows for the period from June 17, 2025 (inception) through September 30, 2025

following table summarizes Pubco’s cash flows from operating, investing and financing activities for period from June 17, 2025 (inception)

through September 30, 2025:

For the period

2025 (inception)

through September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

of March 31, 2026, we had cash and cash equivalents of approximately $25,964 and working capital of approximately $25,466.

the three months ended March 31, 2026, we reported a net loss of approximately $107,759.

This net loss was primarily driven by factors

that are inherently volatile and subject to market conditions, including:

losses related to Bitcoin holdings due to fluctuations in the market price of Bitcoin and;

and administrative expenses associated with operating as a public company and stock-based compensation expense.

digital assets and derivative instruments are measured at fair value, our results of operations may fluctuate significantly from period

to period, as discussed further in Note 8 to our Unaudited Condensed Consolidated Financial Statements for more information.

do not maintain any committed external sources of liquidity, including credit facilities or other financing arrangements.

Our liquidity

is derived primarily from cash on hand.

on the cash and cash equivalents balance of $25,964 and our Bitcoin holdings of 5,457 with a fair value of $372,277 as of March 31, 2026,

we have determined that our sources of liquidity will be sufficient to meet our needs for the one-year period from the issuance of the

Unaudited Condensed Consolidated Financial Statements.

However, our liquidity position may be materially impacted by volatility in the

market price of Bitcoin and other market conditions.

of March 31, 2026, we did not have any material commitments for capital expenditures.

Subsequent to quarter-end, we entered into an

employment agreement with Shain Noor, Chief Technology

Officer, that includes a one-time cash signing bonus of $5.0 million, payable within 90 days of commencement and subject to

continued employment.

This represents a contractual cash commitment that was funded from existing cash on hand in May 2026.

Additional information is included in our Current Report on Form 8-K filed with the SEC on April 6, 2026.

the short term, we expect to use cash primarily to fund working capital requirements and operating expenses.

Over the long term, cash

may be used to support expansion initiatives, technology investments, and potential strategic acquisitions.

The timing and extent of

such expenditures will depend on market conditions, business performance, and capital availability.

Although we believe existing cash and Bitcoin

holdings will be sufficient to meet anticipated operating requirements for at least the next twelve months, a significant decline in the

market value or liquidity of Bitcoin could adversely affect the Company’s financial flexibility and liquidity position.

Flows for the Three Months Ended March 31, 2026

following table summarizes our cash flows from operating, investing and financing activities for the three months ended March 31, 2026:

cash used in operating activities

cash used in investing activities

cash used in financing activities

Flows Used in Operating Activities

cash used in operating activities for the period from June 17, 2025 (inception) through September 30, 2025 was $108,674.

Flows Provided by Financing Activities

cash provided by financing activities for the period from June 17, 2025 (inception) through September 30, 2025 was $108,674.

cash used in operating activities for the three months ended March 31,2026, was $3,286.

Non-cash and working capital adjustments to

reconcile net loss to net cash used in operating activities was $104,473 and were primarily due to, an unrealized loss from the

change in fair value of Bitcoin of $105,467, stock-based compensation expense of $3,540, amortization of discount and debt issuance

costs on Convertible Notes of $1,100, realized loss on put option liability of $914, amortization of right-of use asset of $51, and

depreciation expense of $39, offset by gain on debt extinguishment of $5,933, change in fair value of the Convertible Notes

conversion feature of $838, and $133 changes in other operating assets and liabilities.

Flows Used in Investing Activities

cash used in investing activities for the three months ended March 31, 2026, was $36,108 and was driven by purchases of Bitcoin of $35,953

and the purchase of fixed assets of $155.

Flows Used in Financing Activities

cash used in financing activities for the three months ended March 31, 2026, was $129,503 and consisted of the payment of the Convertible

Notes of $119,152, purchase of derivative securities of $1,653, purchase of treasury stock of $7,998, settlement of derivative securities

of $578 and taxes paid on RSU vesting of $1,011, offset by proceeds from derivative securities of $889.

Accounting Policies and Estimates

Pubco’s consolidated financial statements

and the accompanying notes thereto included elsewhere in this Quarterly Report are prepared in accordance with U.S.

The preparation

of Pubco’s consolidated financial statements requires Pubco to make estimates and assumptions that affect the reported amounts of

assets, liabilities, costs and expenses, and related disclosure of contingent assets and liabilities.

Pubco has based its estimates on

various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities that are not readily apparent from other sources.

Pubco is subject to uncertainties

such as the impact of future events, economic and political factors, and changes in its business environment;

therefore actual results

could differ significantly from these estimates under different assumptions or conditions.

To the extent that there are differences between

Pubco’s estimates and actual results, its future consolidated financial statement presentation, financial condition, results of

operations, and cash flows will be affected.

Given its limited operating history, Pubco currently

does not have any critical accounting policies.

See “Summary of Significant Accounting Policies” described in Note 3 of Pubco’s

consolidated financial statements included elsewhere in this Quarterly Report for a description of Pubco’s significant accounting

Also, there were no significant estimates for the period from June 17, 2025 (inception) through September 30, 2025.

Unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included elsewhere in this Quarterly Report

are prepared in accordance with GAAP.

The preparation of our Unaudited Condensed Consolidated Financial Statements requires us to make

estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses, and related disclosure of contingent

assets and liabilities.

We have based our estimates on various assumptions that are believed to be reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent

from other sources.

We are subject to uncertainties such as the impact of future events, economic and political factors, and changes

in our business environment;

therefore, actual results could differ significantly from these estimates under different assumptions or

To the extent that there are differences between our estimates and actual results, our future unaudited condensed consolidated

financial statement presentation, financial condition, results of operations, and cash flows will be affected.

that the Company has no critical accounting estimates.

See “Summary of Significant Accounting Policies” described in Note

3 to our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for a description of our significant

accounting policies.

Sheet Arrangements

Other than as otherwise described in this Quarterly

Report, Pubco does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future

effect on its financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures

or capital resources.

than collateral arrangements associated with financing activities, we do not have any off-balance sheet arrangements that have, or are

reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues,

expenses, results of operations, liquidity, capital expenditures or capital resources.

Accounting Pronouncements

See “Recent Accounting Pronouncements”

described in Note 3 of Pubco’s consolidated financial statements included elsewhere in this Quarterly Report.

“Recent Accounting Pronouncements” described in Note 3 of our Unaudited Condensed Consolidated Financial Statements included

elsewhere in this Quarterly Report.

Growth Company Status

is expected to be an emerging growth company (“ EGC ”), as defined in the Jumpstart Our Business Startups (“ JOBS ”)

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment

of the JOBS Act, until such time as to those standards apply to private companies.

Pubco has elected to use this extended transition

period for complying with new or revised accounting standards that have different effective dates for public and private companies until

the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended

transition period provided in the JOBS Act.

As a result, these financial statements may not be comparable to companies that comply with

the new or revised accounting pronouncements as of public company effective dates.

addition, Pubco intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

Subject to certain

conditions set forth in the JOBS Act, if, as an EGC, Pubco intends to rely on such exemptions, it is not required to, among other things:

(i) provide an auditor’s attestation report on its system of internal controls over financial reporting pursuant to Section 404(b) of

the Sarbanes-Oxley Act;

are an emerging growth company (“EGC”), as defined in the JOBS Act.

Under the JOBS Act, emerging growth companies can delay

adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as to those standards

apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards

that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or

(ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these financial

statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective

addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions

set forth in the JOBS Act, if, as an EGC, the Company intends to rely on such exemptions, it is not required to, among other things:

(i) provide an auditor’s attestation report on its system of internal controls over financial reporting pursuant to Section 404(b)

of the Sarbanes-Oxley Act;

(ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies

under the Dodd-Frank Wall Street Reform and Consumer Protection Act;

(iii) comply with any requirement that may be adopted by the Public

Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional

information about the audit and the financial statements (auditor discussion and analysis);

and (iv) disclose certain executive compensation-related

items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation

under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

(iii) comply with any requirement that may be adopted by

the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about

the audit and the financial statements (auditor discussion and analysis);

and (iv) disclose certain executive compensation-related items

such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation

to median employee compensation.

will remain an EGC under the JOBS Act until the earliest of (i) the last date of its fiscal year in which it has total annual gross revenue

of at least $1.235 billion, (ii) the date on which it is deemed to be a “large accelerated filer” under the rules of the SEC

with at least $700.0 million of outstanding securities held by non-affiliates, or (iii) the date on which it has issued more than $1.0

billion in non-convertible debt securities during the previous three-years.

Quantitative and Qualitative Disclosures

About Market Risk.

We are a smaller reporting

company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

will remain an EGC until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the initial

public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large

accelerated filer, which means the market value of our shares of Common Stock that are held by non-affiliates exceeds $700 million as

of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three

Market Price Risk

Bitcoin investment is measured using observed prices from active exchanges and adjustments are recorded in net income through “other

income (expenses), net” on our unaudited condensed consolidated statement of operations.

The Bitcoin market price may fluctuate

significantly and a decline in the market price of Bitcoin could result in a material adverse effect on our financial results in future

See the risk factors included under the heading “ Risks Related to Our Business and Bitcoin Treasury Strategy ”

in our Annual Report for more information regarding the risks related to our Bitcoin holdings As of March 31, 2026 and December 31,2025,

the fair value of our Bitcoin investment included in digital assets was $372,277 and $441,791, respectively, and for the three months

ended March 31, 2026, an unrealized loss from the remeasurement of our Bitcoin investment of $105,467.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

reporting companies are not required to provide the information required by this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis