HYPERION DEFI, INC. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation 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, 2026 and for the three and six months ended June 30, 2026 and 2025 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, 2025 (the “2025 Form 10-K”). Forward Looking Statements This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are 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”). Such forward-looking statements include our estimates regarding expenses, future revenue, capital requirements and our need for additional financing and other financial items; any statements regarding the viability of, and risks associated with, our cryptocurrency treasury strategy; any statements of the plans, strategies and objectives of management for future operations; statements about our ability to retain key personnel and hire necessary employees and appropriately staff our operations; statements related to future capital expenditures; statements related to future economic conditions or performance; and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “will,” “plan,” “project,” “seek,” “should,” “target,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections titled “Summary Risk Factors” and “Risk Factors” included in Item 1A of Part I of the 2025 Form 10-K, as filed with the SEC on March 30, 2026, and the risks discussed in this Quarterly Report on Form 10-Q as well as our other filings made with the Securities and Exchange Commission (the “SEC”). Furthermore, such forward-looking statements speak only as of the date of this report. 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. As used in this report, the terms “Hyperion DeFi, Inc.,” “Hyperion DeFi,” “Hyperion,” “Company,” “company,” “we,” “us,” and “our” mean Hyperion DeFi, Inc. and its subsidiaries unless the context indicates otherwise. Disclaimer Certain information contained in this Item 2 relate to or is 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. 31 Table of Contents Overview Hyperion DeFi, Inc. is the first U.S. publicly listed company building on Hyperliquid. Hyperion DeFi is working to provide its shareholders with simplified exposure to the Hyperliquid ecosystem, which we believe to be one of the highest revenue-generating blockchains in the world, according to information provided by various blockchain data tracking sources, including Artemis Analytics and DefiLlama. When we refer to HYPE tokens, we may also be referring to the HYPE liquid staking tokens described more fully herein. The Company has also historically conducted research and development activities related to its proprietary Optejet User Filled Device, designed to work with a variety of topical ophthalmic liquids, including artificial tears and lens rewetting products. Substantially all operations related to Optejet have been wound down as of June 30, 2026. In July 2026, the Company sold all its right, title, and interest to intellectual property associated with the Optejet and the Company’s pharmaceutical development program to Arctic Vision (Hong Kong) Limited in exchange for a $100,000 release of indebtedness. The Company does not anticipate any material proceeds or future economic benefit from the Optejet or the small number of associated ophthalmic technology assets held by the Company as of June 30, 2026. HYPE Treasury Hyperliquid is L1 blockchain engineered for transparent high-frequency finance. 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 such as perpetual futures trading platforms. Hyperliquid supports non-custodial trading via its performant HyperCore order books, with perpetual futures trading for a range of both digital assets and tokenized real-world assets such as Bitcoin (BTC), Ether (ETH), equities, and commodities driving its utilization.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. Hyperliquid utilizes a traditional order book system. This approach allows traders to place bids and asks for various assets, more akin to a centralized cryptocurrency exchange than other decentralized exchanges that rely on automated market makers to fulfill orders. The Hyperliquid blockchain is available to any potential user with a compatible cryptocurrency wallet such as MetaMask, Phantom, and Coinbase Wallet. However, Hyperliquid interface operators can choose to block persons in certain jurisdictions or sanctioned wallets as required via solutions such as geo-blocking and address screening. HYPE serves multiple purposes: users can stake HYPE to earn staking rewards, use staked HYPE inventory to reduce their trading fees, use HYPE to conduct transactions on the HyperEVM, and use HYPE as collateral on various decentralized finance (“DeFi”) applications. Our HAUS agreement with Silhouette is one such example, in which staked HYPE tokens can enable additional on-chain utility. HYPE is the native token of Hyperliquid. The initial total supply of HYPE was set at 1 billion, which has been subsequently reduced to approximately 954 million as of July 31, 2026, as further described below, with 31% of the initial total supply issued in November 2024, and 38.88% of the initial total supply reserved for future community emissions. Hyperliquid has a unique network mechanism that autonomously purchases and removes HYPE tokens from circulation and moves them into an assistance fund (the “Assistance Fund”). This is done by using the trading fees generated on the network’s order books to buy back available HYPE. Approximately 99% of daily fees are allocated to this mechanism, which creates consistent open market demand for the token. As of July 2026, approximately 46 million HYPE have been acquired by the Assistance Fund. In December 2025, the Hyperliquid Foundation initiated a network-wide validator governance vote to formally recognize all HYPE tokens held in the Assistance Fund system address as permanently burned. The validators approved (via a majority vote) that the tokens were mathematically irretrievable and must be treated as removed from both the circulating and total supply of HYPE. 32 Table of Contents The Hyperliquid L1 is a proof-of-stake blockchain, in which validators that have staked the threshold number of HYPE tokens 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. Any holder of HYPE can delegate HYPE to a validator to earn staking rewards, should the validator successfully participate in network consensus. Staked HYPE is locked until un-staked, and subject to a seven-day un-staking queue before HYPE is released back to the user. Staking also provides revenues to the Company in the form of staking yields; however, the required seven-day unlocking period may limit the Company’s liquidity while its HYPE remains staked. In addition, all HiHYPE, kHYPE, and kmHYPE owned by the Company, and other future liquid staked HYPE that may be potentially owned by the Company, will be subject to the same seven-day unlocking period. The Company anticipates that it will have sufficient cash and cash equivalents to cover its operating expenses and any debt obligations during these periods. The Company initialized the staking process on July 1, 2025, and as of June 30, 2026, it had approximately 634,379 HYPE native staked directly to the Kinetiq x Hyperion validator, described further below. Staking was the primary revenue generation strategy for the Company in the three and six months ended June 30, 2026. Key Metrics of Hyperliquid and HYPE as of July 31, 2026 ● Ranked #7 market cap among circulated cryptocurrencies (excluding stablecoins) ● Hyperliquid generates annual fees of approximately $650 million, based on an observed 30-day run-rate of $53 million ● Approximately 99% of Hyperliquid revenues are used by the Assistance Fund, which has cumulatively purchased and owns approximately 46 million HYPE tokens with a market value of $2.5 billion ● There have been approximately 1.6 million cumulative Hyperliquid marketplace users since inception ● The Hyperliquid token’s maximum supply is 954 million, of which the circulating supply is 253 million, corresponding to a market capitalization outstanding of approximately $14 billion ● Trading volume on Hyperliquid exceeded $195 billion in the thirty days ended July 31, 2026 ● Cumulative Hyperliquid fees have exceeded $1.4 billion since inception ● Cumulative cryptocurrency perpetuals trading volume on Hyperliquid has exceeded $4.9 trillion since inception Digital Assets Business Activities Since the Company first pivoted to its Hyperliquid DeFi strategy in June 2025, 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 its broader on-chain engagement strategy, on October 27, 2025 the Company entered into a Joint Validator Operator’s Agreement with Kinetiq and MAVAN, that established a co-branded Hyperliquid validator, referred to as “Kinetiq x Hyperion”. Validator operations are further supported by infrastructure provided by MAVAN, an institutional staking services provider. Under this agreement, staking commissions and other validator-level rewards are allocated among Hyperion (50%), Kinetiq (25%) and MAVAN (25%), subject to overrides including referred delegations. On April 6, 2026, the Company, Kinetiq, and MAVAN agreed to amend the revenue-sharing allocation solely for validator commissions earned on tokens delegated through Kinetiq’s front-end portal to the following allocation: Hyperion (25%), Kinetiq (50%), and MAVAN (25%). By running the joint validator, the Company can directly access HYPE staking yield in addition to supporting Hyperliquid’s network stability and security. Our Kinetiq x Hyperion validator has experienced rapid growth and has over approximately 7 million in delegated HYPE as of July 31, 2026, (including HYPE tokens owned by the Company), HYPE holdings are required to participate in ecosystem governance, and we aim to support the growth of the Hyperliquid ecosystem. 33 Table of Contents The Company currently stakes a majority of its HYPE tokens as part of its broader participation in the Hyperliquid ecosystem. Under its operational policy, the Company utilizes staked HYPE to serve as the foundation for certain income-generating strategies, including the Company’s proprietary HAUS product. These strategies are made possible through technical infrastructure unique to Hyperliquid, which can deploy staked HYPE across various utilities in the Hyperliquid ecosystem, such as significantly reduced trading fees and the ability to support new non-crypto markets on the Hyperliquid platform, both of which the Company has productized and offered to clients as services. In October 2025, the Hyperliquid network implemented the Hyperliquid Improvement Proposal 3 (“HIP-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. In July 2026, Hyperliquid Labs announced the Hyperliquid Improvement Proposal 4 (“HIP-4”) upgrade, which is expected to enable any user with 500,000 HYPE staked at a deployer address to launch custom on-chain outcome markets such as prediction markets, options, and other binary-resolution financial instruments. As of August 10, 2026, HIP-4 remains in a testing phase and is not yet launched to end-users. 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 Foundation (“Felix”) with the HYPE required to launch a perpetual futures market and received a share of the fees earned from trading activity through its HAUS agreement; in June 2026, the HAUS agreement was terminated and this perpetuals exchange was wound down. This perpetual futures market was operated and maintained by Felix outside the United States, and was not made available or marketed to U.S. persons. On July 15, 2026, Hyperion DeFi entered into a HAUS agreement with Skew, pursuant to which we supplied 500,000 HYPE tokens to support custom markets on Hyperliquid’s permissionless infrastructure. The Company will be entitled to earn a portion of the trading fees generated on these markets as income, plus 100% of staking rewards. On August 10, 2026, the Company entered into a HAUS Agreement with Bursa. The Company agreed to supply 500,000 HYPE tokens to support custom markets on Hyperliquid’s permissionless infrastructure. The Company will be entitled to earn fees from Bursa plus 100% of staking rewards. 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 institutional HYPE (“iHYPE”) product. This enabled the Company to earn staking yield on its HYPE while also gaining access to a unique liquid receipt token, HiHYPE, which is used for various on-chain and off-chain strategies. The Company has also earned kPoints, a participation-based incentive that qualified the Company to receive a portion of the airdrop of Kinetiq’s KNTQ token (the governance token of the Kinetiq liquid staking protocol). This reflects yet another DeFi strategy that translates into additional yield from and ownership of key products built on Hyperliquid. Anchorage Digital Bank National Association (“Anchorage Digital”), which has full support asset custody on HyperEVM, provides custody and trade execution services for HYPE. Anchorage Digital is a federally chartered cryptocurrency bank in the United States, serves as a custodian for digital assets, and is licensed and regulated by the Office of the Comptroller of the Currency. Anchorage Digital has institutional-grade security required by institutional investors and employs Hardware Security Module for a unique security model for secure digital assets. We believe that Anchorage Digital’s public support for Hyperliquid by prioritizing development of infrastructure uniquely for Hyperliquid is a testament to the future prospect of the Hyperliquid ecosystem. Because Anchorage Digital does not currently support the HyperCore infrastructure required for the Company’s strategy to stake HYPE and operate on-chain, HYPE used for those purposes must be held in self-custodied wallets. The Company holds its HYPE in self-custodied cold wallet addresses using infrastructure provided by regulated custodians, including Porto by Anchorage Digital, and hardware wallet providers such as Ledger. These arrangements provide the Company flexibility to reallocate HYPE among its wallet addresses, and holdings may be concentrated with a single infrastructure provider from time to time. To support security of its self-custodied cold wallets, the Company utilizes the Porto security infrastructure as well as additional protections such as a HyperCore-native multi-signature configuration that requires multiple Company-owned addresses as additional signers. The Company will periodically evaluate additional custody infrastructure providers to support operational flexibility as its HYPE strategy evolves. In addition to security infrastructure, Anchorage Digital, through which the Company maintains an account, provides certain enterprise-level insurance policies that apply to assets held in its custodial accounts, including crime insurance with a $100 million limit, general liability coverage with a $4 million limit, cyber and technology errors and omissions coverage with a $1 million limit, and other 34 Table of Contents standard liability coverages. Currently, the Company self-custodies all its digital assets, and digital assets that the Company self-custodies are not covered by these insurance policies. By prudently building and deploying a treasury of HYPE, the Company believes that it 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. Overview of the HYPE Token Lifecycle HYPE Creation The circulating supply of HYPE is approximately 253 million tokens as of July 31, 2026. The first token generation event occurred on November 29, 2024, with approximately 310 million tokens created and circulated. Approximately 389 million HYPE tokens were initially reserved for future community rewards and emissions. Approximately 238 million HYPE tokens are reported to be vesting to core contributors of the Hyperliquid blockchain beginning November 29, 2025 and continuing over a multi-year vesting schedule. The amounts reported to have been vested include approximately 1.75 million HYPE in November 2025, 1.2 million HYPE in December 2025, 140,000 HYPE in January 2026, 173,000 HYPE in February 2026, 333,000 HYPE in March 2026, 422,000 HYPE in April 2026, 534,000 HYPE in May 2026, 452,000 HYPE in June 2026, and 433,000 HYPE in July 2026. The initial total supply of HYPE was set at 1 billion, which has been subsequently reduced to approximately 954 million as of July 31, 2026 due to purchases by the Assistance Fund, which are deemed permanently burned. HYPE Acquisition and Sale Process Our management team continually reviews the Company’s short-term obligations and the excess cash available for dedication to our HYPE treasury strategy. When we determine that the Company has excess capital available to deploy, we work with institutional digital asset trading venues and counterparties to acquire HYPE from institutional sellers. Our HYPE acquisition process is designed to maximize the quantity of HYPE that we acquire with the capital that we have, while minimizing market impact and execution risks. While the Company plans to hold its digital assets (including its HYPE tokens) as part of a long-term treasury strategy, and deploy its assets for productive purposes, the Company’s management has the discretion and ability to sell its digital assets. From time to time the Company has sold, and may continue to sell, its digital assets based upon the Company’s liquidity needs, market conditions, and other factors. The Company only sells its digital assets to institutional counterparties and trading venues. HYPE Token Custody We hold our HYPE in self-custodied cold wallet addresses, including using infrastructure provided by Porto by Anchorage Digital Bank (a regulated custodian), as well as hardware wallet providers such as Ledger. In light of the significant amount of HYPE that we hold, we continually evaluate additional custody infrastructure providers (such as BitGo and Fireblocks) to potentially pursue a greater degree of diversification in the custody of our HYPE, as the extent of potential risk of loss depends, in part, on the degree of diversification. HyperEVM and Protocol Partnerships HyperEVM is a general-purpose Ethereum Virtual Machine (EVM) execution layer natively integrated into the Hyperliquid L1 blockchain. It provides a high-performance, Ethereum-compatible smart contract environment that operates directly alongside Hyperliquid’s on-chain trading engine, HyperCore, while sharing the same consensus and validator set. A defining feature of HyperEVM is its deep integration with HyperCore’s on-chain spot and perpetual order books, allowing dedicated smart contracts to access real-time exchange data and trading functionality natively. This architecture enables composable designs such as vaults, automated trading strategies, structured products, and other advanced DeFi systems that interact directly with live on-chain market primitives within a single unified blockchain. In February 2026, the Company launched in partnership with the Rysk protocol an Institutional Volatility Income Vault (“IVIV”). Rysk is an on-chain volatility income protocol that enables established options strategies such as covered calls and cash-secured puts to be executed fully on-chain, making volatility income more accessible and composable while potentially reducing counterparty risk versus OTC option execution. During the three and six months ended June 30, 2026, the Company executed options on the price of HYPE within the IVIV, and anticipates future third-party monetization opportunities from the partnership. 35 Table of Contents In March 2026, the Company launched a partnership with HyperLend, including a Private Pool Participation Agreement and a Revenue-Sharing Agreement. HyperLend is a privately held fintech company that develops a decentralized, blockchain-based money-market platform designed to facilitate the lending and borrowing of digital assets. Operating on an EVM blockchain, the company’s platform enables users to deposit crypto assets, earn interest, and obtain collateralized loans through smart contracts that emphasize real-time execution and on-chain transparency. HyperLend is venture-capital backed and positions itself as infrastructure for both retail and institutional participants seeking efficient, on-chain credit and liquidity solutions within the broader DeFi ecosystem. The Company believes HyperLend is a premier protocol for borrowing and lending digital assets on the HyperEVM. HYPE Native Staking & Validating On the Hyperliquid Network, staking rewards are determined by the protocol and are distributed to validators and their associated stakers based on the proportion of their stake relative to the total active HYPE staked in the network. The rewards come from Hyperliquid’s future emissions reserve. The staking reward rate formula is inspired by Ethereum’s model, where the reward rate is inversely proportional to the square root of total HYPE staked. As of July 31, 2026, the annual reward rate is approximately 2.1% per year (net rate after validator commission, which varies among individual validators). Rewards are accrued continuously (every minute) and are automatically distributed and compounded daily with automatic redelegation to the staked validator. This means that Hyperion DeFi’s staking balance grows automatically, without requiring manual intervention or claiming transactions. Hyperion DeFi operates a dedicated validator node on Hyperliquid in partnership with Kinetiq and MAVAN, under its Kinetiq x Hyperion Joint Validator Operator’s Agreement. Through the Kinetiq x Hyperion validator, Hyperion DeFi participates directly in Hyperliquid’s consensus and block production. The validator receives validator rewards proportional to its total delegated stake, generates validator commission income from HYPE stakers who delegate to it, and contributes to Hyperliquid Network decentralization by operating a professional validator node. As noted above, the Company currently stakes substantially all of its HYPE tokens. Staking provides revenues to the Company in the form of staking yields, but can create liquidity challenges given that staked tokens are not sellable until a seven-day un-staking queue is completed. The Company anticipates having sufficient cash and cash equivalents to cover its operating expenses and any debt payments. HYPE Liquid Staking Liquid staking allows Hyperion DeFi to earn staking rewards while maintaining liquidity and accessing additional yield opportunities. Through liquid staking, we deposit HYPE to a non-custodial liquid staking protocol and receive liquid staking tokens in return that represent our staked position and accrued rewards. These liquid staking tokens may be used throughout the HyperEVM ecosystem in decentralized finance applications, while the underlying HYPE remains staked and earning consensus-layer rewards. Hyperion DeFi participates in liquid staking through Kinetiq. When Hyperion DeFi deposits HYPE to Kinetiq for staking, we receive liquid staking tokens such as HiHYPE, kHYPE or kmHYPE, which represent a proportional claim on the underlying staked HYPE and accrued staking rewards, remains liquid and tradeable on HyperEVM’s decentralized exchanges, automatically accrues staking rewards with the token balance increasing daily, can be redeemed for HYPE at any time (subject to liquidity and redemption queue conditions), and can be held, traded, or deployed in DeFi strategies without unstaking the underlying HYPE. The Kinetiq protocol operates non-custodially, meaning Kinetiq does not take possession or control of user HYPE; instead, users retain cryptographic control and can verify that their HYPE is staked to designated validators on HyperCore at all times. The Company has received and may continue to receive additional digital assets from issuers and participants active in the Hyperliquid ecosystem. HYPE Asset Use Service (HAUS) Beyond core staking, Hyperion DeFi supplies HYPE inventory to third-party DeFi protocols through structured agreements known as HAUS. Under HAUS agreements, the Company’s partners use the HYPE inventory to enable unique on-chain utility, and the Company receives compensation in the form of fees on transaction volume, revenue share from protocol earnings, additional HYPE or other tokens as incentive payments, and potentially equity or governance tokens in the protocol. These arrangements are contractually documented and operate within specified risk parameters managed by Hyperion DeFi’s treasury and risk policies. 36 Table of Contents The Company entered its first HAUS agreement on September 12, 2025 with Credo Cayman. The Company linked 100,000 of its owned and staked HYPE tokens to the trading wallet of Credo Cayman, allowing Credo Cayman to receive reduced trading fees on the Hyperliquid decentralized exchange, and entitling the Company to earn a portion of those fee savings as income. The agreement was terminated in January 2026. On October 28, 2025, Hyperion DeFi entered into a HAUS agreement with Felix, pursuant to which we supplied 500,000 HYPE tokens to support custom markets on Hyperliquid’s permissionless infrastructure. The Company was entitled to earn a portion of the trading fees generated on these markets as income. The agreement was terminated in June 2026. On November 19, 2025, the Company entered into a Temporary Use Agreement with Native Markets. Under this agreement, 300,000 of the Company’s HYPE tokens were staked at a deployer address to meet certain requirements of the Hyperliquid blockchain which unlocked more favorable economics for the USDH stablecoin. In return, the Company received fees for the use of its tokens by Native Markets, Inc., and the Company was entitled to receive all staking rewards on the tokens. The agreement was terminated in June 2026. On March 18, 2026, Hyperion DeFi entered into a HAUS agreement with Silhouette. The Company linked 100,000 of its owned and staked HYPE tokens to the trading wallet of Silhouette, allowing Silhouette to receive reduced trading fees on the Hyperliquid decentralized exchange, and entitling the Company to earn a portion of those fee savings as income, plus 100% of staking rewards. On July 15, 2026, Hyperion DeFi entered into a HAUS agreement with Skew, pursuant to which we supplied 500,000 HYPE tokens to support custom markets on Hyperliquid’s permissionless infrastructure. The Company will be entitled to earn a portion of the trading fees generated on these markets as income, plus 100% of staking rewards. On August 10, 2026, the Company entered into a HAUS Agreement with Bursa. The Company agreed to supply 500,000 HYPE tokens to support custom markets on Hyperliquid’s permissionless infrastructure. The Company will be entitled to earn fees from Bursa plus 100% of staking rewards. Hyperliquid Governance Governance of the Hyperliquid protocol is conducted through a decentralized, token-based voting system. Holders of HYPE tokens can propose and vote on protocol upgrades, parameter changes, and treasury allocations. Governance decisions are executed on-chain via smart contracts, ensuring transparency and immutability. The governance framework is designed to align incentives among stakeholders and promote long-term protocol sustainability. The Optejet Through April 2026, Hyperion DeFi was also developing the proprietary Optejet User Filled Device (the “Optejet UFD”), which is designed to work with a variety of topical ophthalmic liquids, including artificial tears and lens rewetting products. Substantially all of the Company’s operations related to the Optejet have been wound down as of June 30, 2026. The company executed a non-binding letter of intent to monetize the Optejet UFD in the first quarter of 2026, which was subsequently terminated in April 2026. In July 2026, the Company sold all its right, title, and interest to intellectual property associated with the Optejet and the Company’s pharmaceutical development program to Arctic Vision (Hong Kong) Limited in exchange for a $100,000 release of indebtedness. The Company does not anticipate any material proceeds or future economic benefit from the Optejet or the small number of associated ophthalmic technology assets held by the Company as of June 30, 2026. The Private Placement On June 20, 2025, we raised approximately $50 million in gross proceeds in connection with the closing of a private placement (the “Private Placement”). Pursuant to the Securities Purchase Agreement, dated as of June 17, 2025, in the Private Placement, the purchasers purchased an aggregate of 5,128,205 shares of the Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”) and warrants to purchase up to 30,769,230 shares of common stock at an exercise price of $3.25 per share. We used the net proceeds from the Private Placement to build a reserve of HYPE. In connection with the Private Placement, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the purchasers, which provided that the Company would register the resale of the shares of common stock issuable 37 Table of Contents upon conversion of the Series A Preferred Stock and exercise of the warrants. The Company filed a registration statement with the SEC pursuant to the Registration Rights Agreement on July 18, 2025, which was declared effective by the SEC on January 9, 2026. Chardan acted as placement agent for us in connection with the Private Placement. 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 warrants to purchase up to 1,846,153 shares of common stock at an exercise price of $3.25 per share. At-The-Market Program On November 14, 2025, the Company entered into a Sales Agreement with Cantor Fitzgerald & Co. and Chardan with respect to the Company’s at-the-market offering program. The new agreement, among other things, increases the aggregate offering amount from $100 million to $500 million and increased the total fees payable to the two sales agents from 3.0% to 4.0%. During the three months ended June 30, 2026 and 2025, the Company received approximately $1.8 million and $2.6 million in proceeds, respectively, net of offering costs of $0.1 million and $0.1 million, respectively, from the sale of 492,783 and 1,323,389 shares of its common stock, respectively, under its at-the-market program. During the six months ended June 30, 2026 and 2025, the Company received approximately $8.5 million and $8.2 million in proceeds, respectively, net of offering costs of $0.4 million and $0.3 million, respectively, from the sale of 2,352,776 and 2,450,489 shares of its common stock, respectively, under its at-the-market program. May 2026 Public Equity Issuance On May 7, 2026, the Company closed a public offering of 2,777,778 common shares and received approximately $8.9 million in net proceeds. On May 13, 2026, the Company sold an additional 132,249 shares of the Company’s common stock, resulting in approximately $0.4 million in net proceeds to the Company. Fourth Amendment of the Avenue Loan On June 17, 2025, the Company and the Lenders (as defined below) entered into the Fourth Amendment (the “Fourth Amendment”) to the Avenue Loan with Avenue Venture Opportunities Fund, L.P., (“Avenue 1”) and Avenue Venture Opportunities Fund, L.P. II, (“Avenue 2”), (together “Avenue” or the “Lenders”). The Fourth Amendment, among other things, extended the maturity date of the Avenue Loan to July 1, 2028; 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; 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; and provided us with the option to prepay debt owed under the Loan and Security Agreement in part. In connection with the Fourth Amendment, we issued to the Lenders warrants to purchase an aggregate of 350,000 shares of common stock at an exercise price of $4.00 per share. Corporate Information We were organized as a corporation under the laws of the State of Florida on March 12, 2014 under the name “PGP Holdings V, Inc.” On May 5, 2014, we changed our name to Eyenovia, Inc. On October 6, 2014, we reincorporated in the State of Delaware by merging into Eyenovia, Inc., a Delaware corporation. On July 1, 2025, we changed our name to Hyperion DeFi, Inc. Our principal executive office is located at 3090 Nowitzki Way, Suite 300, Dallas, TX, 75219, and our telephone number is (833) 393-6684. We maintain a website at www.hyperiondefi.com, to which we regularly post copies of our press releases as well as additional information about us. The information contained on, or that can be accessed through, our website is not a part of this report. We have included our website address in this report solely as an inactive textual reference. Implications of Being a Smaller Reporting Company We are a “smaller reporting company” as defined under the Exchange Act. 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. 38 Table of Contents Financial Overview Revenue and Cost of Revenue Digital Assets 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. 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 validate blocks or transactions as determined by the protocol). The HYPE earned are non-cash consideration and therefore measured at fair value at the inception of each contract. The Company participates in Hyperliquid blockchain validation activities through its arrangements with third-party validator operators, Kinetiq and MAVAN. While we obtained unilateral control over the private keys beginning on December 15, 2025, the ongoing operation, maintenance, and performance of validator infrastructure, and the process of validation are conducted by our third-party validator operators. Given the Company does not perform the primary validating activities, the Company’s performance obligation is limited to delegating and arranging for validation services. Therefore, during the six months ended June 30, 2026, the Company has determined it acts as an agent under ASC 606. Revenue is recognized on a net basis, representing the portion of blockchain rewards retained by the Company after amounts owed to third-party validator operators and third-party token delegators. We also enter into arrangements with customers under which we provide the temporary use of our HYPE tokens in exchange for consideration. The Company’s obligation is to make the digital assets available for use over a defined period, which represents a single performance obligation that is satisfied over time as the counterparty simultaneously receives and consumes the benefits of use. In arrangements where control of the digital assets transfers to the customer, the Company records a receivable representing its right to receive the digital assets at the end of the contractual term, as well as provisions for credit losses against such receivables. Consideration is primarily based on transaction volume, trading activity, or other usage-based metrics generated during the contract term. The Company recognizes revenue in the amount to which it has the right to invoice for services performed, consistent with the application of the right-to-invoice practical expedient. Ophthalmic Technology Revenue was previously earned from the sale of our ophthalmological products. However, we have ceased our sales efforts with respect to our ophthalmological products and had no revenue from sales of such products during the six months ended June 30, 2026. Cost of sales consisted of the cost of the production of the ophthalmological products that were sold. Research and Development Expenses Ophthalmic Technology Research and development expenses consist 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. Substantially all of the Company’s assets related to Optejet have been written off and operations related to the Optejet have been wound down as of June 30, 2026. Selling, General and Administrative Expenses Selling, 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. Our selling, general and administrative expenses have decreased in the short term as requirements to support our research and development and commercial activities declined and in light of our decision to wind down our operations related to the Optejet, as well as a decline in our near term funding requirements following the closing of the Private Placement in June 2025 and subsequent establishment of our treasury strategy. 39 Table of Contents Gains and Losses in Connection with Digital Assets HYPE, KNTQ, and HPL 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 digital assets, the Company recognizes realized gains or losses in operating income (expense). Liquid staking tokens and other digital intangible 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 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). Results of Operations For the Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 2025 Revenue and Cost of Revenue Revenue for the three months ended June 30, 2026 totaled approximately $0.4 million, entirely from digital assets, driven mostly by the Company’s staking and validating activities. The Company earned no revenue in the three months ended June 30, 2025. Research and Development Expenses Research and development expenses for the three months ended June 30, 2026 totaled approximately $0.1 million, a decrease of approximately $0.6 million, or 91%, as compared to approximately $0.7 million recorded for the three months ended June 30, 2025. The decrease primarily resulted from decreases in salaries and benefits and non-cash stock-based compensation that was due to the layoffs that occurred after the termination of our CHAPERONE study and slowdown of our commercial operations relating to our ophthalmology product development. Substantially all of the Company’s operations related to Optejet have been wound down as of June 30, 2026. Selling, General and Administrative Expenses Selling, general and administrative expenses for the three months ended June 30, 2026 totaled approximately $3.9 million, a decrease of approximately $3.8 million, or 49%, as compared to $7.7 million recorded for the three months ended June 30, 2025. The decrease primarily resulted from professional fees and general and administrative compensation expenses incurred in the three months ended June 30, 2025 as new executives were hired and professional expenses were incurred in connection with the execution of our digital assets strategy. Impairment of Right of Use Assets In the three months ended June 30, 2026, the Company recognized a $57,773 impairment to its right of use assets in connection with its office located in Laguna Hills, California. The location was the primary nexus of operations related to the Optejet, and the impairment was in connection with the wind down of all Optejet-related activity in the three months ended June 30, 2026. The Company’s lease of the Laguna Hills, California office space is through July, 2027. There was no impairment to right of use assets in the three months ended June 30, 2025. Gains and Losses in Connection with Digital Assets In the three months ended June 30, 2026, unrealized gains on digital assets totaled approximately $16.9 million, primarily due to an increase in the price of HYPE. 40 Table of Contents In the three months ended June 30, 2026, realized gains on digital assets and digital assets receivable totaled approximately $17.9 million, primarily due to to derecognitions of HYPE digital assets and digital assets receivable above the Company’s basis. In the three months ended June 30, 2026, unrealized losses on digital intangible assets receivable totaled approximately $0.4 million, primarily due to a decrease in the price of HYPE following when the assets were recognized as receivables. In the three months ended June 30, 2026, impairment loss on digital intangible assets totaled approximately $0.8 million. There were no gains or losses in connection with digital assets for the three months ended June 30, 2025. Provision for Credit Losses and Allowance for Credit Loss On June 3, 2026, all outstanding digital assets receivable were returned to the Company, and the Company does not have any allowance for credit losses for digital assets receivable as of June 30, 2026. In the three months ended June 30, 2026, the Company recorded a full recovery of previous credit loss provisions of $586,774 related to its digital assets receivable held as of March 31, 2026. As of June 30, 2026, the Company does not have any OTC HYPE options or digital intangible assets receivable outstanding. In the three months ended June 30, 2026, the Company recorded a full recovery of previous credit loss provisions of $323,068 related to its digital intangible assets receivable held as of March 31, 2026. There were no credit losses recognized in the three months ended June 30, 2026. There was no provision for credit losses in the three months ended June 30, 2025 or allowance for credit loss as of June 30, 2025. Gains and Losses in Connection with OTC HYPE Options The Company operates an OTC options strategy on the price of HYPE to mitigate risk and enhance yield on its digital asset treasury. In the three months ended June 30, 2026, the Company executed out-of-the-money covered call option agreements that are sold against and collateralized by HYPE owned by the Company (including liquid staking tokens such as HiHYPE and kHYPE), as well as cash secured put agreements on the price of HYPE sold and secured by the Company’s cash, USDC, and, through May 2026, USDH. In the three months ended June 30, 2026, the Company’s Net gains on derivative instruments totaled approximately $0.1 million. As of June 30, 2026, there are no outstanding OTC HYPE options. There were no gains or losses in connection with OTC HYPE options for the three months ended June 30, 2025. Other Income (Expense) Total other expense for the three months ended June 30, 2026 was approximately $0.1 million, compared to total other expense of approximately $0.3 million for the three months ended June 30, 2025. Total other income for the three months ended June 30, 2026 primarily consisted of $0.2 million interest income (including approximately $0.1 million amortization of a nonrefundable upfront fee received in November 2025 in connection with the Company’s digital assets receivable), partially offset by $0.2 million interest expense primarily related to the Avenue Loan. 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. For the Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 2025 Revenue and Cost of Revenue Revenue for the six months ended June 30, 2026 totaled approximately $0.6 million, entirely from digital assets, driven mostly by the Company’s staking and validating activities. Revenue for the six months ended June 30, 2025 totaled $14,720, partially offset by cost of revenues of $48, all from the sales of our ophthalmological products. 41 Table of Contents Research and Development Expenses Research and development expenses for the six months ended June 30, 2026 totaled approximately $0.3 million, a decrease of approximately $1.0 million, or 74%, as compared to approximately $1.3 million recorded for the six months ended June 30, 2025. The decrease primarily resulted from decreases in salaries and benefits and non-cash stock-based compensation that was due to the layoffs that occurred after the termination of our CHAPERONE study and winding down of our commercial operations relating to our ophthalmology product development. Substantially all of the Company’s assets and operations related to the Optejet have been wound down as of June 30, 2026. Selling, General and Administrative Expenses Selling, general and administrative expenses for the six months ended June 30, 2026 totaled approximately $8.4 million, a decrease of approximately $1.6 million, or 16%, as compared to $10.1 million recorded for the six months ended June 30, 2025. The decrease primarily resulted from professional fees and general and administrative compensation expenses incurred in the six months ended June 30, 2025, as new executives were hired and professional expenses were incurred in connection with the execution of our digital assets strategy. Impairment of Right of Use Assets In the six months ended June 30, 2026, the Company recognized a $57,773 impairment to its right of use assets in connection with its office located in Laguna Hills, California. The location was the primary nexus of operations related to the Optejet, and the impairment was in connection with the wind down of all Optejet-related activity in the six months ended June 30, 2026. The Company’s lease of the Laguna Hills, California office space is through July, 2027. There was no impairment to right of use assets in the six months ended June 30, 2025. Gains and Losses in Connection with Digital Assets In the six months ended June 30, 2026, unrealized gains on digital assets totaled approximately $27.9 million, primarily due to an increase in the price of HYPE. In the six months ended June 30, 2026, realized gains on digital assets and digital assets receivable totaled approximately $21.5 million, primarily due to derecognitions of HYPE digital assets and digital assets receivable above the Company’s basis. In the six months ended June 30, 2026, impairment loss on digital intangible assets totaled approximately $2.0 million. There were no gains or losses in connection with digital assets for the six months ended June 30, 2025. Provision for Credit Losses and Allowance for Credit Loss On June 3, 2026, all outstanding digital assets receivable were returned to the Company, and the Company does not have any allowance for credit losses for digital assets receivable as of June 30, 2026. In the six months ended June 30, 2026, the Company recorded a full recovery of previous credit loss provisions of $405,331 related to its digital assets receivable held as of December 31, 2025. There were no realized credit losses in the six months ended June 30, 2026. There was no provision for credit losses in the six months ended June 30, 2025 or allowance for credit loss as of June 30, 2025. Gains and Losses in Connection with OTC HYPE Options The Company operates an OTC options strategy on the price of HYPE to mitigate risk and enhance yield on its digital asset treasury. In the six months ended June 30, 2026, the Company executed out-of-the-money covered call option agreements that are sold against and collateralized by HYPE owned by the Company (including liquid staking tokens such as HiHYPE and kHYPE), as well as 42 Table of Contents cash secured put agreements on the price of HYPE sold and secured by the Company’s cash, USDC, and, through May 2026, USDH. In the six months ended June 30, 2026, the Company’s net gains on derivative instruments totaled approximately $0.2 million. There were no gains or losses in connection with OTC HYPE Options for the six months ended June 30, 2025. Other Income (Expense) Total other income for the six months ended June 30, 2026 was approximately $0.1 million, compared to total other expense of approximately $0.8 million for the six months ended June 30, 2025. Total other income for the six months ended June 30, 2026 primarily consisted of $0.5 million interest income (including approximately $0.3 million amortization of a nonrefundable upfront fee received in November 2025 in connection with the Company’s digital assets receivable), partially offset by $0.5 million interest expense primarily related to the Avenue Loan and $0.1 million other income. 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. Liquidity and Capital Resources We measure our liquidity in a number of ways, including the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Cash and Cash Equivalents ​ $ 9,637,216 ​ $ 6,310,878 ​ ​ ​ ​ ​ ​ ​ Working Capital ​ $ 7,400,075 ​ $ 4,544,796 ​ ​ ​ ​ ​ ​ ​ Notes Payable (Gross) ​ $ 8,870,986 ​ $ 8,339,386 ​ Cash Flow Since inception, we have experienced negative cash flows from operations and our operations have primarily been funded by proceeds received in equity and debt financings. As of June 30, 2026, our accumulated deficit since inception was approximately $200.8 million. As of June 30, 2026, we had a cash and cash equivalents balance of approximately $9.6 million, working capital surplus of approximately $7.4 million and stockholders’ equity of approximately $102.0 million. As of June 30, 2026 and December 31, 2025, we had approximately $8.9 million and approximately $8.3 million, respectively, of principal payable on debt outstanding. During the six months ended June 30, 2026 and 2025, our sources and uses of cash were as follows: Net cash used in operating activities for the six months ended June 30, 2026 was approximately $7.1 million, which includes net income of $39.8 million, decreased by the $48.9 million net non-cash impact of digital asset and derivative instruments and $2.1 million of net cash used by changes in the levels of operating assets and liabilities, partially offset by $4.1 million of other non-cash expenses. 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 investing activities for the six months ended June 30, 2026 was approximately $7.0 million, which was related to $8.9 million in purchases of digital assets, $2.4 million in sales of digital assets, $2.5 million in purchases of USDC, and $2.0 million proceeds from sales of USDC. 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. Net cash provided by financing activities for the six months ended June 30, 2026 totaled approximately $17.4 million, of which $9.3 million was attributable to the May 2026 public equity issuance (net of $1.1 million issuance costs) and $8.5 million was attributable to net proceeds from the sale of common stock in our “at-the-market” program (net of $0.4 million issuance costs), partially offset by $0.2 million repayment of notes payable and $0.2 million in payments to taxing authorities in connection with shares directly withheld from employees. 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 (net of $0.6 million issuance costs), $8.2 million of net proceeds from the sale of common stock in our “at-the-market” 43 Table of Contents offering (net of $0.3 million issuance costs) and $3.0 million of net proceeds from the exercise of stock warrants partially offset by $1.5 million from the repayment of notes payable. We believe that our existing cash and cash equivalents as of June 30, 2026 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. Our financial condition is substantially dependent on the market price and liquidity of HYPE tokens, which are subject to extreme volatility and limited trading venues. Substantially all of our treasury assets are concentrated in HYPE tokens and HYPE LSTs. HYPE tokens have experienced significant price volatility, and our financial results and carrying value of our digital assets will fluctuate materially based on HYPE token price movements. We depend on the continued success and adoption of the Hyperliquid protocol for the value of our treasury holdings. We plan to continue to pursue additional capital through our at-the-market offering program in the future; however, such funding may not be available on terms acceptable to us or at all. Although we believe that such capital sources will continue to be available, there can be no assurances that financing will be available to us when needed, or if available, on terms acceptable to us. If we are unable to obtain adequate financing on terms that are satisfactory to us, our ability to continue to fund our operating expenses, to grow or support the business and to respond to business challenges could be significantly limited, which may adversely affect our business plans. We may require proceeds from sales of digital assets in order to fund ongoing operations, but we may be constrained in our ability to do so by unstaking queue protocols, illiquid trading platforms, or other factors. USDH USDH was Hyperliquid’s native stablecoin which powered gas-free payments and enabled noncustodial financial primitives. As part of its regular operations, the Company previously adopted USDH as a method of settling certain digital assets transactions as purchasing HYPE digital assets or receiving fees for its temporary HAUS agreements. USDH was accounted for as a financial instrument that could be redeemed one USDH for one U.S. dollar on demand from the issuer. The Company previously held $81,422 USDH on its balance sheet within prepaid expenses and other current assets as of December 31, 2025. On May 14, 2026, Native Markets announced plans to cease supporting the USDH stablecoin and encouraged all holders to convert into USDC stablecoin or cash. Native Markets has granted Coinbase, Inc. (“Coinbase”) the rights to USDH’s brand assets, and Coinbase announced its plan to become the official deployer of USDC as an aligned quote asset on Hyperliquid. In the three months ended June 30, 2026, the Company converted all its USDH into USDC stablecoin or cash, modified underlying USDH-referenced activity supported by the Company’s Hyperion Rysk Vault Shares to no longer have dependencies upon USDH, terminated its HAUS agreements with Felix and Native Markets (both of which were related to USDH activity), and no longer anticipates borrowing USDH pursuant to its a Private Pool Participation Agreement with HyperLend. The Company does not hold any USDH as of June 30, 2026, nor does it have any underlying USDH exposure in its digital asset activity. USDC USD Coin (“USDC”) is a U.S. dollar–denominated payment stablecoin issued by Circle Internet Group, Inc., which the Company uses to settle certain digital asset transactions, including purchases of HYPE, contracts under its OTC options strategy, and fees received under its temporary HAUS agreements. USDC is accounted for as a financial instrument that can be redeemed one USDC for one U.S. dollar on demand from the issuer and is not within the scope of ASC 350-60. The Company presents USDC within “Prepaid expenses and other current assets”. The Company held USDC of $2,121,483 as of June 30, 2026 and $132,589 as of December 31, 2025, none of which was pledged, locked or deployed. Contractual Obligations and Commitments During the next twelve months we have commitments to pay (a) $2.3 million to settle our June 30, 2026 accounts payable, and accrued expenses a; (b) $0.4 million relating to our non-cancelable operating lease commitments; and (c) $2.8 million in note payments. After the next twelve months we have commitments to pay (a) $0.1 million relating to our non-cancelable operating lease commitments and (b) $6.0 million relating to our notes payable. Risks and Uncertainties The continuing worldwide implications of the war between Russia and Ukraine and the conflicts in the Middle East remain difficult to predict at this time. These events, such as the interruption in telecommunications or internet services, cyber-related terrorist acts, civil disturbances, war or other catastrophes, could also negatively affect the digital asset economy in one or more jurisdictions. Moreover, foreign laws, regulations or directives may conflict with those of the United States and may negatively impact the acceptance 44 Table of Contents of one or more digital assets by users, merchants and service providers outside the United States and may therefore impede the growth or sustainability of the digital asset economy in the United States and globally. Off-Balance Sheet Arrangements There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. Critical Accounting Estimates As described in Item 7 – Critical Accounting Estimates in the 2025 Form 10-K, we prepare our financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. Therefore, management believes there were, or are, no critical accounting estimates to be included in the 2025 Form 10-K or in this Quarterly Report on Form 10-Q. Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, we are not required to provide the information required by this Item.