What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-13 · 174 added, 91 removed, 180 unchanged (60% of the section changed)

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The following discussion and analysis of the results of operations and financial condition of Hyperion DeFi, Inc.

(“Hyperion DeFi” the “Company,” “we,” “us” and “our”) as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included in this Quarterly Report on Form 10-Q as well as our financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”), as amended by Amendment No.

(“Hyperion DeFi” the “Company,” “we,” “us” and “our”) as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included in this Quarterly Report on Form 10-Q as well as our financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”), as amended by Amendment No.

1 to the 2024 Form 10- K (the “2024 Form 10-K Amendment”).

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Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Hyperion DeFi, Inc.

(“Hyperion DeFi” or the “Company”), formerly known as Eyenovia, Inc., is the first U.S.

publicly listed company building a long-term strategic treasury of HYPE as well as a pioneering digital ophthalmic technology company.

Hyperion DeFi is working to provide its shareholders with simplified exposure to the Hyperliquid ecosystem, which we believe to be one of the fastest-growing, highest revenue-generating blockchains in the world.

At the same time, we continue to execute on our planned completion of development and registration of its Optejet ophthalmic liquid delivery device.

Certain information contained in this Item 2 relate to or are based on studies, publications, surveys and other data obtained from third-party sources and Hyperion DeFi’s own internal estimates and research.

While Hyperion DeFi believes these third-party studies, publications, surveys and other data to be reliable as of the date of this report, it has not independently verified, and makes no representation as to, the adequacy, fairness, accuracy or completeness of any information obtained from third-party sources.

In addition, no independent source has evaluated the reasonableness or accuracy of Hyperion DeFi’s internal estimates or research and no reliance should be made on any information or statements made in this report relating to or based on such internal estimates and research.

You should conduct your own investigation and analysis of Hyperion DeFi, its business, prospects, results of operations and financial condition.

In furnishing this information, Hyperion DeFi does not undertake any obligation to provide you with access to any additional information (including forward-looking information and any projections contained herein) or to update or correct the information, except as may be required by law.

Hyperion DeFi, Inc., formerly known as Eyenovia, Inc., is the first U.S.

publicly listed company building a long-term strategic treasury of HYPE in addition to being a pioneering digital ophthalmic technology company.

We are working to provide our shareholders with simplified exposure to the Hyperliquid ecosystem, which we believe to be one of the highest revenue-generating blockchains in the world.

At the same time, we continue to execute on our planned completion of development and registration of our Optejet ophthalmic liquid delivery device.

HYPE Treasury

Hyperliquid is a layer one (L1) blockchain engineered for transparent high-frequency finance.

The blockchain hosts fully onchain perpetual futures and spot order books, with every order, cancel, trade and liquidation occurring within 70 millisecond block times and offering up to 200,000 transactions per second, resulting in near-instant trade settlement.

The blockchain hosts fully on-chain perpetual futures and spot order books, with every order, cancel, trade and liquidation occurring within 70 millisecond block times and offering up to 200,000 transactions per second, resulting in near-instant trade settlement.

The Hyperliquid blockchain also hosts the HyperEVM, a general-purpose smart contract platform that, like Ethereum, supports permissionless decentralized financial applications.

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Perpetual futures are a type of cryptocurrency derivative contract that allows traders to speculate on the price of an asset without owning the underlying asset itself.

Unlike traditional futures contracts, perpetual futures have no expiration date, allowing traders to hold positions indefinitely,

as long as they meet margin requirements.

Unlike traditional futures contracts, perpetual futures have no expiration date, allowing traders to hold positions indefinitely, as long as they meet margin requirements.

Hyperliquid utilizes a traditional order book system.

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approximately 99% of daily fees are allocated to this mechanism, which serves as a consistent “marginal buyer” for the token.

As of June 2025, more than 25 million HYPE have been removed from circulation and the token has become the 12th-largest cryptocurrency by market capitalization.

Additionally, HYPE has certain governance rights with respect to the Hyperliquid blockchain.

The Hyperliquid L1 is a proof-of-stake blockchain, wherein validators that have staked the threshold number of HYPE are selected to produce blocks and will receive rewards when they successfully validate blocks.

As of October 2025, more than 30 million HYPE have been removed from circulation.

The Hyperliquid L1 is a proof-of-stake blockchain, in which validators that have staked the threshold number of HYPE are selected to produce blocks, and will receive rewards when they successfully validate blocks.

Holders of HYPE can delegate to validators who then are able to vote on certain decisions regarding the platform, such as the listing and de-listing of new markets.

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Staked HYPE is locked until un-staked, subject to a seven-day un-staking queue before HYPE is released back to the user.

As of June 30, 2025, none of our HYPE holdings were staked.

As part of its broader onchain engagement strategy, we recently announced a co-branded Hyperliquid validator referred to as Kinetiq x Hyperion, with Kinetiq, a liquid staking protocol built natively for the Hyperliquid ecosystem.

The Company initialized the staking process on July 1, 2025, and as of September 30, 2025, it had approximately 834,050.16 HYPE staked directly to the Kinetiq x Hyperion validator, described further below.

Key Metrics of Hyperliquid and HYPE as of October 31, 2025

● One of the highest revenue generating blockchain cryptocurrencies;

ranked #11 market cap (excluding stablecoins)

● Hyperliquid generates annual revenue of approximately $1.3 billion, based on an October 2025 observed run-rate of $3-$3.5 million per day.

In addition, platforms built on Hyperliquid earn approximately $2 million in fees per day, bringing the total to $5 million per day across the blockchain and platforms

● Approximately 99% of Hyperliquid revenues are used by the Hyperliquid Assistance Fund, which has cumulatively purchased and owns 34.25 million HYPE tokens with a market value of $1.45 billion

● There have been over 800,000 cumulative Hyperliquid marketplace users since inception

● The Hyperliquid Token’s maximum supply is 1 billion, of which the circulating supply is 337 million, corresponding to a market capitalization outstanding of approximately $14.3 billion

● Daily trading volume on Hyperliquid exceeds $12 billion

● Cumulative Hyperliquid fees have exceeded $700 million since inception

● Cumulative cryptocurrency perpetuals trading volume on Hyperliquid has exceeded $3 trillion since inception

Digital Assets Business Activities

Since the Company first pivoted to its Hyperliquid DeFi strategy, we have continued to emphasize that our business is “more than just HYPE”.

The accumulation of HYPE is the first step in a broader DeFi monetization roadmap that continues to accelerate.

As part of our broader on-chain engagement strategy, we announced a co-branded Hyperliquid validator referred to as “Kinetiq x Hyperion”, with Kinetiq, a liquid staking protocol built natively for the Hyperliquid ecosystem.

Validator operations are further supported by infrastructure provided by Pier Two, an institutional staking services provider.

While the partnership details remain under discussion, we expect to pay a percentage of validator commissions to each of Kinetiq and Pier Two, which provides staking services for the validator.

Under our Joint Validator Operators Agreement, we pay a percentage of validator commissions to each of Kinetiq and Pier Two, both of which provide supporting services for the validator.

By running our own validator, we can directly access HYPE staking yield in addition to supporting Hyperliquid’s network stability and security.

Staked HYPE can be delegated to user accounts which reduces their trading fees or increases the revenue share from referring new users, both of which could serve as revenue opportunities for the Company.

With the rapid growth of our Kinetiq x Hyperion validator, which has over 13 million in delegated HYPE as of October 31, 2025, we play a meaningful role in stewarding the future growth of the Hyperliquid ecosystem, given that HYPE is required to participate in ecosystem governance.

In addition to our validator operations, staked HYPE can be deployed to access various utilities in the Hyperliquid ecosystem.

For example, HYPE staked in user accounts reduces their trading fees or increases the revenue share from referring new users, both of which could serve as revenue opportunities for the Company.

Specifically, the validator potentially enables us to create unique financial products built around the demand for these network benefits from those who do not have access to HYPE.

HYPE can also be deployed into the HyperEVM for various strategies such as lending and liquidity provisioning.

This is expected to enable the Company to support various applications built on Hyperliquid and in return, potentially earn yield that can be compounded into its overall HYPE acquisition strategy.

With this opportunity identified, we developed and launched the HYPE Asset Use Service product (HAUS), a first-of-its-kind on-chain service, and announced our first deal with proprietary trading firm Credo.

Through this HAUS Credo arrangement, we provided the use of staked HYPE to Credo, enabling them to access substantial fee reductions when trading on Hyperliquid, and a share of the resulting net fee savings return to us as revenues.

More importantly, we believe that this arrangement will encourage trading firms and broader market participants that trade on other venues to migrate additional trading volume and activity to Hyperliquid.

More recently, the Hyperliquid network implemented the HIP-3 (Hyperliquid Improvement Proposal 3) upgrade, which enables any user with 500,000 HYPE staked at a deployer address to launch a custom on-chain perpetual futures market for non-crypto assets such as equities, commodities and indices.

These network upgrades expand both Hyperliquid’s product suite and its potential user base, further establishing it as a premier on-chain destination for financial activity.

To support HIP-3, the Company provided Felix, one of the earliest HyperEVM protocols, with the HYPE required to launch a perpetuals future market and will earn a share of the fees earned from trading activity.

Beyond engaging with Hyperliquid’s flagship exchange product, users can also deploy HYPE into the HyperEVM for various strategies such as lending and liquidity provisioning.

The Company is the first public company on HyperEVM, staking a significant portion of its native HYPE into Kinetiq’s uniquely designed iHYPE (institutional HYPE) product.

This enabled the Company to earn staking yield on its HYPE while also gaining access to a unique liquid receipt token, HiHYPE (Hyperion iHYPE), which is used for various on-chain and off-chain strategies.

The Company has also earned kPoints, a participation-based incentive that qualifies the Company to receive a portion of the upcoming airdrop of Kinetiq’s KNTQ token.

This reflects yet another DeFi strategy that translates into additional yield from and ownership of key products built on Hyperliquid.

By prudently building and deploying a treasury of HYPE, we believe that we can rapidly accelerate the growth of the Hyperliquid ecosystem and further its adoption, potentially creating a powerful flywheel effect that may drive platform usage, increase protocol value and strengthen the long-term position of both the Hyperliquid ecosystem and the Company.

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The precise delivery of a low-volume columnar spray by the Optejet UFD helps ensure instillation success while minimizing contamination risk with a non-protruding nozzle and self-closing shutter.

In clinical trials, the Optejet UFD has demonstrated that its targeted delivery achieves a high rate of successful administration, with 98% of sprays being accurately delivered upon first attempt compared to the established rate reported with traditional eye drops of approximately 50%.

In clinical trials, the Optejet UFD has demonstrated that its targeted delivery achieves a high rate of successful

administration, with 98% of sprays being accurately delivered upon first attempt compared to the established rate reported with traditional eye drops of approximately 50%.

A more physiologically appropriate volume of medication in the range of seven to ten microliters is delivered by the Optejet UFD, which is approximately one-fifth of the 35 to 50 microliter dose typically delivered in a single eye drop.

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The Notice had no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market.

In accordance with the Nasdaq Listing Rules, the Company had 45 calendar days, or until June 13, 2025, to submit a plan to regain compliance with the Minimum Equity Requirement.

The Company has submitted a plan to regain compliance with the Nasdaq Listing Rules, which we believe should be acceptable to Nasdaq, although no assurance can be given.

If the plan is accepted, Nasdaq may grant an extension of up to 180 calendar days from the date of the Notice for the Company to regain compliance, or until October 26, 2025.

If the Staff does not accept our plan, we will have the opportunity to appeal that decision to a Hearings Panel.

It is further noted that the Company reported total stockholders’ equity of $37.4 million as of June 30 2025 which we believe demonstrates that we have regained compliance.

The Company submitted a plan to regain compliance with the Nasdaq Listing Rules.

On September 2, 2025, we received notice from the Staff of Nasdaq that the Company was now in compliance with the Nasdaq Listing Rules and that the matter was closed.

The Private Placement

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Pursuant to the Engagement Letter, dated as of June 17, 2025, as compensation for its services, we issued to Chardan 307,692 shares of Series A Preferred Stock (convertible into up to 923,076 shares of common stock) and Placement Agent Warrants to purchase up to 1,846,153 shares of common stock at an exercise price of $3.25 per share.

At-The-Market Offering

On September 24, 2025, we entered into Amendment No.

1 (the “Amendment”) to the Amended and Restated Sales Agreement (the “A&R Sales Agreement”) with Chardan Capital Markets, LLC, with respect to our existing at-the-market offering program.

The Amendment increases the aggregate offering amount under the A&R Sales Agreement from $50 million to $100 million.

During the three and nine months ended September 30, 2025, we received approximately $21.8 million and $30.0 million, respectively, in net proceeds from the sale of 1,929,207 and 4,379,696 shares of its common stock pursuant to the sales agreement with Chardan Capital Markets, LLC in its “at-the-market” offering.

Fourth Amendment of the Avenue Loan

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provided for an interest-only period from July 1, 2025 until January 31, 2027;

reduced the interest rate on the loans from 12.0% to 8.0%, payable half in cash and half in kind;

the interest rate on the loans from 12.0% to 8.0%, payable half in cash and half in kind;

eliminated the option of the Lenders to convert an aggregate amount of up to $10.0 million of the loans outstanding into shares of common stock;

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We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million, regardless of our annual revenue, as of the end of that year’s second fiscal quarter.

Our net losses were $12.2 million and $22.0 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had a working capital deficit and an accumulated deficit of approximately $0.9 million and $207.5 million, respectively.

Our net losses were $5.5 million and $29.9 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had working capital and an accumulated deficit of approximately $5.0 million and $200.9 million, respectively.

Financial Overview

Revenue and Cost of Revenue

Digital Assets

HYPE digital assets are initially recorded at cost and then subsequently remeasured at fair value as of the balance sheet date with changes in fair value recognized as unrealized gains or losses in operating income (expense).

Upon derecognition of HYPE, the Company recognizes realized gains or losses in operating income (expense), based upon its fair value at the date of derecognition.

HiHYPE tokens and other digital assets are intangible assets with indefinite lives;

they are not amortized but are subject to impairment.

These assets are presented as digital intangible assets in the Condensed Consolidated Balance Sheets at cost, net of any recognized impairments.

The Company tests digital intangible assets for impairment quarterly and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts.

Should market prices fall below carrying value, the resulting difference is recognized as an impairment charge.

Such impairment charges are presented as impairment of digital intangible assets in operating income (expense).

We jointly operate a validator node on the Hyperliquid blockchain network and earn HYPE as rewards and commission income for validating transactions and maintaining network security.

These activities include both self-staking (using our own tokens) and providing validation services to third-party delegators.

The provision of services related to transaction validation on the Hyperliquid blockchain network (through both staking rewards and commission income) is an output of our ordinary activities.

We recognize revenue by applying the guidance in ASC 606, Revenue from Contracts with Customers (“ASC 606”).

HYPE earned from validator operations, in the form of staking rewards and commission income, are recognized as revenue when we satisfy our performance obligations (i.e., successfully validates blocks or transactions as determined by the protocol) ratably over the contract term, which is the length of an epoch.

The HYPE earned are noncash consideration and therefore measured at fair value at the inception of each contract.

Because we do not unilaterally control the validator, we are not the principal to the validation service.

As such, we present staking rewards and commission income as revenue on a net basis, reflecting only the portion of protocol rewards and commission to which we are entitled.

Ophthalmic Technology

Revenue is earned from the sale of our ophthalmological products.

However, we have ceased our sales efforts with respect to our products and have no revenue from sales of such products during the current period.

However, we have ceased our sales efforts with respect to our ophthalmological products and had limited revenue from sales of such products during the three and nine months ended September 30, 2025.

Cost of sales consisted of the cost of the production of the ophthalmological products that were sold.

Research and Development Expenses

During the 2025 periods presented in this report, our research and development expenses consisted primarily of internal salaries, benefits and non-cash stock-based compensation expenses incurred in connection with the research and development of our Optejet UFD device which we anticipate registering with the FDA this year.We anticipate that our research and development expenses will decline after the Opteject UFD device is registered.

Ophthalmic Technology

We anticipate that our research and development expenses will decline after the Optejet UFD device is registered.

During the 2024 periods presented in this report, prior to the termination of our CHAPERONE study, our research and development expenses were incurred in connection with the research and development of our prior Optejet microdose therapeutics and consisted primarily of contract service expenses.

We did not separately track research and development expenses by project.

Our research and development expenses consisted of:

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Selling, General and Administrative Expenses

Digital Assets

Upon derecognition of HYPE, the Company recognizes realized gains or losses in operating income (expense).

HiHYPE tokens and Other Digital Assets are intangible assets with indefinite lives;

they are not amortized but are subject to impairment.

These assets are presented as digital intangible assets in the Condensed Consolidated Balance Sheets at cost, net of any recognized impairments.

The Company tests digital intangible assets for impairment quarterly and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts.

Should market prices fall below carrying value, the resulting difference is recognized as an impairment charge.

Such impairment charges are presented as impairment of digital intangible assets in operating income (expense).

Ophthalmic Technology

General and administrative expenses consist primarily of payroll and related expenses, legal and other professional services, insurance expense, and non-cash stock-based compensation expense.

We anticipate that our general and administrative expenses will decrease in the short term as requirements to support our continued research and development and commercial activities decline and after the conclusion of our review of strategic options, as well as a decline in our near term funding requirements following the closing of the Private Placement in June 2025 (see Note 11 – June 2025 Series A Preferred Stock Securities Purchase Agreements) and subsequent establishment of our treasury strategy.

We anticipate that our general and administrative expenses will decrease in the short term as requirements to support our continued research and development and commercial activities decline and in light of the conclusion of our review of strategic options, as well as a decline in our near term funding requirements following the closing of the Private Placement in June 2025 (see Note 10 – June 2025 Series A Preferred Stock Securities Purchase Agreements) and subsequent establishment of our treasury strategy.

Results of Operations

Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024

Revenue and Cost of Revenue

There was no revenue or cost of revenue for the three months ended June 30, 2025.

Revenue for the three months ended June 30, 2024 totaled $22,625, which was offset by cost of revenues of $490,361.

Write- down of inventories to net realizable value for the three months ended June 30, 2024 totaled approximately $0.5 million, which represented the write-down of short-dated inventory to net realizable value.

Revenue for the three months ended September 30, 2025 totaled $302,506, which was net staking revenue.

As noted above, we present staking rewards and commission income as revenue on a net basis.

Thus, there was no cost of revenue for the three months ended September 30, 2025.

Revenue for the three months ended September 30, 2024 totaled $1,625, which was offset by cost of revenues of $132,522.

Cost of revenues primarily consisted of the write-down of inventories to net realizable value.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2025 totaled $0.7 million, a decrease of $3.9 million, or 85%, compared to $4.6 million recorded for the three months ended June 30, 2024.

Research and development expenses for the three months ended September 30, 2025 totaled $0.4 million, a decrease of $3.1 million, or 89%, compared to $3.5 million recorded for the three months ended September 30, 2024.

Research and development expenses consisted of the following:

For the Three Months Ended

September 30,

Salaries and benefits

Non-cash stock based compensation expenses

Facilities expenses

Direct clinical and non-clinical expenses

Facilities expenses

Non-cash stock based compensation expenses

Supplies and materials

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The decrease in salaries and benefits and non-cash stock-based compensation was primarily due to the layoffs that occurred in the fourth quarter of 2024 after the termination of our CHAPERONE study and commercial operations in November 2024.

The decrease in facilities expense was primarily due to the impairment of right-of-use (ROU) assets in the fourth quarter of 2024, which lowered non-cash rent expense and cost savings from the reduction in facilities usage as we consolidated our focus to the development of the Optejet UFD to our Laguna Hills, CA facility.

The decrease in facilities expense was primarily due to the phase out of our Redwood City, CA and Reno, NV R&D and manufacturing locations during 2025, as we consolidated our focus to the development of the Optejet UFD to our Laguna Hills, CA facility.

The reduction in direct clinical and non-clinical expenses and supplies and materials expense was primarily due to the termination of our CHAPERONE study.

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Selling General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2025 totaled $7.7 million, an increase of $3.9 million, or 106%, compared to $3.8 million recorded for the three months ended June 30, 2024.

General and administrative expenses for the three months ended September 30, 2025 totaled $2.6 million, a decrease of $1.1 million, or 30%, compared to $3.7 million recorded for the three months ended September 30, 2024.

General and administrative expenses consisted of the following:

For the Three Months Ended June 30,

Non-cash stock based compensation

For the Three Months Ended September 30,

Professional fees

Salaries and benefits

Non-cash stock based compensation

Insurance expense

Investor relations

Director fees and expense

Other expenses

Director fees and expense

Facilities expense

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Total general and administrative expenses

The decrease in salaries and benefits was primarily due to the layoffs that occurred in the fourth quarter of 2024 after the termination of our CHAPERONE study and commercial operations in November 2024.

The increase in non-cash stock-based compensation reflects a commitment to issue a fully vested inducement grant to a newly appointed executive.

The increase in professional fees was primarily due to increased legal fees, consulting and other fees related to our evaluation of strategic alternatives during the second quarter of 2025 which evaluation concluded with the closing of the Private Placement in June 2025 (see Note 11 – June 2025 Series A Preferred Stock Securities Purchase Agreement) and subsequent initiation of our treasury strategy.

The decrease in salaries and benefits was primarily due to the layoffs that occurred in the fourth quarter of 2024 after the termination of our CHAPERONE study and the slowing of commercial operations relating to our ophthalmology business in November 2024.

The Company agreed to grant a fully vested RSU award to a senior executive upon his hire date in June 2025, which was subject to stockholder approval of an increase in the shares available for issuance under the Company’s equity compensation plan.

Accordingly, the service inception date of the award preceded the grant date.

The full fair value of the award was expensed in June and accrued at that time, but it was not formally granted until August 2025, at which time the Company was required to adjust the fair value to the new current fair value.

Because the fair value of the award was lower at the grant date than the service inception date, there was a reversal of compensation expense in the third quarter.

The increase in professional fees was primarily due to increased legal fees, consulting and other fees related to our treasury strategy, shareholder meeting and other corporate activities during the third quarter of 2025 which evaluation concluded with the initiation of our treasury strategy.

The decrease in facilities expense was primarily due to the impairment of ROU assets in the fourth quarter of 2024, which lowered non-cash rent expense.

The decrease in sales and marketing, and travel, lodging and meals was primarily due to our termination of commercial operations in the fourth quarter of 2024.

Reacquisition of License Rights

Reacquisition of license rights for the three months ended June 30, 2025 totaled $0, compared to $2.9 million for the three months ended June 30, 2024.

The $2.9 million amount is comprised of the $3.0 million settled in common stock to Bausch + Lomb in the second quarter 2024 in connection with the reacquisition of a license (which we are recording as an operating expense), partially offset by $0.1 million of the purchase price allocated to the repurchase of equipment.

The decrease in sales and marketing, and travel, lodging and meals was primarily due to our slowdown of commercial operations relating to our ophthalmology business in the fourth quarter of 2024.

Digital Assets

Upon derecognition of HYPE, the Company recognizes realized gains or losses in operating income (expense).

For the three months ended September 30, 2025, realized gains on HYPE digital tokens was $6.9 million, resulting from the conversion of HYPE to HiHYPE.

Unrealized gains on HYPE digital tokens was $6.4 million, resulting from the fair value remeasurement of HYPE at September 30, 2025.

Impairment loss on digital intangible assets was $6.3 million, resulting from the market price of HiHYPE falling below the carrying value.

There was no digital asset activity for the three months ended September 30, 2024.

Other Income (Expense)

Other income (expense) for the three months ended June 30, 2025 totaled approximately $0.3 million of net other expense, a decrease of $0.9 million, compared to $0.6 million of net other income for the three months ended June 30, 2024.

Net other expense for the three months ended June 30, 2025 primarily consisted of approximately $0.5 million of interest expense, partially offset by $0.2 million of net other income.

Net other income for the three months ended June 30, 2024 primarily consisted of approximately $1.2 million for the change in fair value of equity consideration payable, partially offset by $0.7 million of interest expense.

Other income (expense) for the three months ended September 30, 2025 totaled approximately $2.2 million of net other income, an increase of $2.8 million, compared to $0.6 million of net other expense for the three months ended September 30, 2024.

Net other income for the three months ended September 30, 2025 primarily resulted from the extinguishment of a liability that was payable to Formosa.

Net other expense for the three months ended September 30, 2024 primarily consisted of interest expense.

Results of Operations

Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024

Revenue and Cost of Revenue

Revenue for the six months ended June 30, 2025 totaled $14,720, partially offset by cost of revenues of $48.

Revenue for the six months ended June 30, 2024 totaled $27,618, partially offset by cost of revenues of $693,388.

Write-down of inventories to net realizable value for the six months ended June 30, 2024 totaled approximately $0.7 million.

The $0.7 million was

comprised of the adjustment to bring the inventory to list price for the first quarter of 2024 and the write-down of short-dated inventory to net realizable value for the second quarter of 2024.

Revenue for the nine months ended September 30, 2025 totaled $317,226, partially offset by cost of revenues of $48.

Revenues included $302,506, which was net staking revenue.

As noted above, we present staking rewards and commission income as revenue on a net basis.

Revenue from the ophthalmic business was $14,720.

Revenue for the nine months ended September 30, 2024 totaled $29,243, offset by cost of revenues of $825,910.

Write-down of inventories to net realizable value for the nine months ended September 30, 2024 totaled approximately $0.7 million.

The $0.7 million was comprised primarily of a write-down of short-dated inventory to net realizable value during the nine month period.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2025 totaled $1.3 million, a decrease of $7.7 million, or 86%, compared to $9.0 million recorded for the six months ended June 30, 2024.

Research and development expenses for the nine months ended September 30, 2025 totaled $1.7 million, a decrease of $10.8 million, or 86%, compared to $12.5 million recorded for the nine months ended September 30, 2024.

Research and development expenses consisted of the following:

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Salaries and benefits

Non-cash stock based compensation expenses

Facilities expenses

Direct clinical and non-clinical expenses

Other expenses

Facilities expenses

Non-cash stock based compensation expenses

Supplies and materials

Other expenses

Depreciation expense

Total research and development expenses

The decrease in direct clinical and non-clinical expenses and supplies and materials was primarily due to the termination of our CHAPERONE study.

The decrease in facilities expense was primarily due to the impairment of right-of-use (ROU) assets in the fourth quarter of 2024, which lowered non-cash rent expense and cost savings from reduction in facilities usage as we consolidated our focus to the development of the Optejet UFD to our Laguna Hills, CA facility.

The decrease in facilities expense was primarily due the phase out of our Redwood City CA, and Reno NV, R&D and manufacturing locations over 2025, as we consolidated our focus to the development of the Optejet UFD to our Laguna Hills, CA facility and the impairment of right-of-use (ROU) assets in the fourth quarter of 2024, which lowered non-cash rent expense.

The decrease in depreciation expense was primarily due to the full impairment of fixed assets that occurred in the fourth quarter of 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2025 totaled $10.1 million, an increase of $2.7 million, or 36%, compared to $7.4 million recorded for the six months ended June 30, 2024.

Selling, general and administrative expenses for the nine months ended September 30, 2025 totaled $12.6 million, an increase of $1.5 million, or 14%, compared to $11.1 million recorded for the nine months ended September 30, 2024.

General and administrative expenses consisted of the following:

For the Six Months Ended June 30,

Non-cash stock based compensation

For the Nine Months Ended September 30,

Professional fees

Salaries and benefits

Non-cash stock based compensation

Insurance expense

Investor relations

Director fees and expense

Other expenses

Director fees and expense

Facilities expense

FDA PDUFA fees

Sales and marketing

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Total general and administrative expenses

The increase in non-cash stock-based compensation reflects a commitment to issue a fully vested inducement grant to a newly appointed executive.

The increase in professional fees was primarily due to increased legal fees, consulting and other fees related to our evaluation of strategic alternatives during the first half of 2025 which evaluation concluded with the closing of the Private Placement in June 2025 (see Note 11 – June 2025 Series A Preferred Stock Securities Purchase Agreement) and subsequent initiation of our treasury strategy.

The decrease in salaries and benefits was primarily due to the layoffs that occurred in the fourth quarter of 2024 after the termination of our CHAPERONE study and slowdown of commercial operations relating to our ophthalmology business in November 2024.

The increase in non-cash stock-based compensation primarily related to a fully vested inducement grant to a newly appointed executive.

The increase in professional fees was primarily due to increased legal fees, consulting and other fees related to our evaluation of strategic alternatives, including the initiation of our treasury strategy.

The decrease in facilities expense was primarily due to the impairment of ROU assets in the fourth quarter of 2024, which lowered non-cash rent expense.

The decrease in sales and marketing, and travel, lodging and meals was primarily due to our termination of commercial operations in the fourth quarter of 2024 prior to the initiation of our treasury strategy in June.

Digital Assets

Upon derecognition of HYPE, the Company recognizes realized gains or losses in operating income (expense).

For the nine months ended September 30, 2025, realized gains on HYPE digital tokens was $6.9 million, resulting from the conversion of HYPE to HiHYPE.

Unrealized gains on HYPE digital tokens was $6.4 million, resulting from the fair value remeasurement of HYPE at September 30, 2025.

Impairment loss on digital intangible assets was $6.3 million, resulting from the market price of HiHYPE falling below the carrying value.

There was no digital asset activity for the nine months ended September 30, 2024.

Reacquisition of License Rights

Reacquisition of license rights for the six months ended June 30, 2025 totaled $0, compared to $4.9 million for the six months ended June 30, 2024.

Reacquisition of license rights for the nine months ended September 30, 2025 totaled $0, compared to $4.9 million for the nine months ended September 30, 2024.

The $4.9 million is comprised of the aggregate $5.0 million of payments ($2.0 million of cash and $3.0 million settled in common stock) to Bausch + Lomb in connection with the reacquisition of a license (which we are recording as an operating expense), partially offset by $0.1 million related to the repurchase of equipment.

Other Income (Expense)

Other income (expense) for the six months ended June 30, 2025 totaled approximately $0.8 million of net other expense compared to $20,632 of net other expense for the six months ended June 30, 2024.

Net other expense for the six months ended June 30, 2025 primarily consisted of approximately $1.1 million of interest expense, partially offset by $0.2 million of other income and a $0.1 million gain on debt extinguishment.

Net other expense for the six months ended June 30, 2024 primarily consisted of approximately $1.4 million of interest expense related to the Avenue loan offset by $1.2 million of changes in fair value of equity consideration (the equity payable for the Bausch + Lomb and Formosa transactions) and $0.2 million of interest income, primarily from Treasury bills.

Other income (expense) for the nine months ended September 30, 2025 totaled approximately $1.4 million of net other income compared to $0.6 million of net other expense for the nine months ended September 30, 2024.

Net other income for the nine months ended September 30, 2025 primarily consisted of approximately $2.2 million from the extinguishment of a liability due to Formosa, partially offset by $1.3 million of interest expense.

Net other expense for the nine months ended September 30, 2024 primarily consisted of approximately $2.0 million of interest expense related to the Avenue loan, partially offset by $1.2 million of changes in fair value of equity consideration (the equity payable for the Bausch + Lomb and Formosa transactions) and $0.2 million of interest income, primarily from Treasury bills.

Liquidity and Going Concern

We measure our liquidity in a number of ways, including the following:

September 30,

Cash and Cash Equivalents

Working (Deficit) Capital

Working Capital (Deficit)

Notes Payable (Gross)

Since inception, we have experienced negative cash flows from operations and our operations have primarily been funded by proceeds from equity and debt financings.

Our net losses were $12.2 million and $22.0 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of approximately $207.5 million.

As of June 30, 2025, we had a cash and cash equivalents balance of $7.5 million, HYPE digital tokens with a fair value of $45.5 million, a working capital deficit of $0.9 million and stockholders’ equity of $37.4 million.

As of June 30, 2025 and December 31, 2024, we had $8.2 million and $10.7 million, respectively, of gross notes payable outstanding.

During the six months ended June 30, 2025 and 2024, our sources and uses of cash were as follows:

Net cash used in operating activities for the six months ended June 30, 2025 was approximately $7.9 million, which includes cash used to fund a net loss of $12.2 million, reduced by $6.8 million of net non-cash expenses, plus $2.5 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in operating activities for the six months ended June 30, 2024 was approximately $18.1 million, which includes cash used to fund a net loss of $22.0 million, reduced by $4.6 million of net non-cash expenses, plus $0.7 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in investing activities for the six months ended June 30, 2025 was approximately $45.5 million, which was primarily related to the purchase of HYPE digital tokens.

Cash used in investing activities for the six months ended June 30, 2024 was $0.2 million, which was related to purchases of property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2025 totaled approximately $58.8 million, which was primarily attributable to $49.4 million of net proceeds from the sale of Series A Preferred Stock and warrants in the Private Placement, $8.2 million of net proceeds from the sale of common stock in our “at-the-market” offering and $2.9 million of net proceeds from the exercise of stock warrants partially offset by $1.5 million from the repayment of notes payable.

Net cash provided by financing activities for the six months ended June 30, 2024 totaled approximately $5.7 million, which was primarily attributable to $1.9 million of net proceeds from the sale of common stock and warrants in a registered direct offering and $4.9 million of net proceeds from the sale of common stock in our “at-the-market” offering pursuant to the Sales Agreement with Leerink Partners, LLC, which we replaced with our current “at-the-market” program in December 2024, partially offset by $1.1 million from the repayment of notes payable.

Our net losses were $5.5 million and $29.9 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of approximately $200.9 million.

As of September 30, 2025, we had a cash and cash equivalents balance of $8.2 million, HYPE digital assets with a fair value of $38.0 million, digital intangible assets with a carrying value of $35.0 million, working capital of $5.0 million and stockholders’ equity of $70.8 million.

As of September 30, 2025 and December 31, 2024, we had $8.3 million and $10.7 million, respectively, of gross notes payable outstanding.

During the nine months ended September 30, 2025 and 2024, our sources and uses of cash were as follows:

Net cash used in operating activities for the nine months ended September 30, 2025 was approximately $10.7 million, which includes cash used to fund a net loss of $5.5 million, plus $4.0 million of net non-cash items, plus $1.2 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2024 was approximately $24.0 million, which includes cash used to fund a net loss of $29.9 million, reduced by $5.8 million of net non-cash expenses and $0.1 million of net cash used by changes in the levels of operating assets and liabilities.

Net cash used in investing activities for the nine months ended September 30, 2025 was approximately $65.6 million, which was related to the purchase of HYPE digital assets.

Cash used in investing activities for the nine months ended September 30, 2024 was $0.2 million, which was related to purchases of property and equipment.

Net cash provided by financing activities for the nine months ended September 30, 2025 totaled approximately $82.4 million, which was primarily attributable to $49.4 million of net proceeds from the sale of Series A Preferred Stock and warrants in the Private Placement, $30.0 million of net proceeds from the sale of common stock in our “at-the-market” offering and $4.8 million of net proceeds from the exercise of stock warrants partially offset by $1.5 million from the repayment of notes payable.

Net cash provided by financing activities for the nine months ended September 30, 2024 totaled approximately $16.5 million, which was primarily attributable to $14.2 million of net proceeds from the sale of common stock and warrants in a registered direct offering and $6.0 million of net proceeds from the sale of common stock in our “at-the-market” offering, partially offset by $3.8 million from the repayment of notes payable.

Contractual Obligations and Commitments

During the next twelve months we have commitments to pay (a) $4.6 million to settle our June 30, 2025 accounts payable, accrued expenses and other current liabilities, and (b) $0.5 million relating to our non-cancelable operating lease commitments.

During the next twelve months we have commitments to pay (a) $3.5 million to settle our September 30, 2025 accounts payable, accrued expenses and other current liabilities, and (b) $0.5 million relating to our non-cancelable operating lease commitments.

After twelve months we have commitments to pay an additional $0.3 million relating to our non-cancelable operating lease commitments and $8.3 million of gross principal payments on the Avenue loan.

Risks and Uncertainties

The continuing worldwide implications of the war between Russia and Ukraine and the conflict in the Middle East and between India and Pakistan remain difficult to predict at this time.

Our digital asset treasury reserve business is subject to a variety of risks as outlined in this report.

In addition, the continuing worldwide implications of the war between Russia and Ukraine and the conflict in the Middle East and between India and Pakistan remain difficult to predict at this time.

The imposition of sanctions on Russia by the United States and other countries and counter sanctions by Russia, and the resulting economic impacts on oil prices and other materials and goods, could affect the price of materials used in the manufacture of our product platform.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis