Strive, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes to those consolidated financial statements included in Item 1. of this Quarterly Report on Form 10-Q. References to "we", "us", "our", or "the Company" refer to Strive, Inc. and its consolidated subsidiaries unless specifically stated otherwise. Cautionary Statement Regarding Forward-Looking Information This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Such statements are often characterized by the use of qualified words (and their derivatives) such as “may,” “will,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “predict,” “potential,” “assume,” “forecast,” “target,” “budget,” “outlook,” “trend,” “guidance,” “objective,” “goal,” “strategy,” “opportunity,” and “intend,” as well as words of similar meaning or other statements concerning opinions or judgment of the Company or its management about future events. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results of Company will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found under the “Risk Factors” heading in Company’s Annual Report on Form 10-K and the risks that can be found in Company’s other documents filed with the SEC. The actual results anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Company. Investors are cautioned not to rely too heavily on any such forward-looking statements. Forward-looking statements contained in this Quarterly Report speak only as of the date hereof, and Company undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. 1:20 Reverse Stock Split On February 6, 2026, we completed a 1:20 reverse stock split of our Class A and Class B Common Stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, all applicable share and per share information of the Successor presented within this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. Concurrent with the effectiveness of the Reverse Stock Split, the number of shares of Class A Common Stock available to purchase and the related shares underlying outstanding warrants were adjusted pro-rata to give effect to the Reverse Stock Split. Overview Strive is a structured finance company and institutional asset manager focused on disciplined capital allocation and long term value creation. We have strategically adopted bitcoin as our hurdle rate for capital deployment because of our fiduciary duty to maximize long-term value for stockholders, and compounding purchasing power over time. Relative to a traditional depreciating fiat-denominated benchmark, implementing a bitcoin hurdle rate establishes a higher level of accountability and strategic investment discipline, since our decisions are measured against an asset we believe will appreciate over time. Strive’s operating business generates stockholder value through disciplined balance sheet management and the growth of our bitcoin holdings. Our SATA Stock exemplifies this approach, a publicly traded security that aims to provide investors with consistent cash flows and minimal volatility, while enabling Strive to capture the spread between SATA Stock’s financing cost and the potential long term return of bitcoin. Beyond balance sheet strategy, Strive is focused on advancing innovation within the capital markets by modernizing established financing structures. The Company has developed our SATA Stock, our perpetual preferred equity instrument, that incorporates an at‑the‑market (“ATM”) program, creating a flexible and continuous capital formation mechanism. This approach transforms a historically static capital structure into a dynamic and adaptive capital funding platform. Through these innovations, Strive seeks to combine legacy market frameworks with modern assets, positioning the Company at the intersection of institutional finance and a bitcoin‑based reserve strategy. 21 As of March 31, 2026, the Company manages over $2.5 billion in AUM. These activities provide recurring, fee-based revenue streams which increase with AUM. Our Bitcoin Strategy Our bitcoin strategy generally involves, from time to time, subject to market conditions and the need for cash and cash equivalents to meet short-term working capital requirements, (i) acquiring bitcoin through open market purchases using available cash, which may be raised from our operating activities as well as capital raising initiatives, such as issuing equity and fixed income offerings, among other capital raise strategies (collectively, "beta" initiatives) and (ii) acquiring bitcoin through alpha strategies, such as acquiring bitcoin through strategic M&A activity or other transactions, resulting in the acquisition of bitcoin at a discount relative to market value, which are intended to deliver returns above and beyond what beta initiatives may deliver alone. As of March 31, 2026, our digital assets, at fair value totaled approximately $929.4 million within our consolidated statement of financial condition, consisting of approximately 13,628 bitcoin. We also held $95.1 million in cash and cash equivalents and STRC Stock with a fair value of $50.5 million, putting us in a position to strategically deploy capital to bolster our treasury. As of May 12, 2026, our cash and cash equivalents totaled $87.6 million, while our position in the STRC Stock had a fair value of $50.5 million. Our bitcoin treasury totaled 15,009 bitcoin as of May 12, 2026. Available Information Our website is located at www.strive.com. We make available free of charge, on or through the Investor Relations section of our website (https://investors.strive.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing or furnishing such reports with the SEC. Information found on our website is not part of this Quarterly Report or any other report filed with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, including us, that file or furnish electronically with the SEC at www.sec.gov. We also maintain a dashboard on our website (https://treasury.strive.com/) as a disclosure channel for providing broad, non-exclusionary distribution of information regarding the Company to the public, including information regarding market prices of our outstanding securities, bitcoin purchases and holdings, certain KPI metrics and other supplemental information, and as one means of disclosing non-public information in compliance with our disclosure obligations under Regulation FD. Investors and others are encouraged to regularly review the information that we make public via the website dashboard. Recent Developments Change to Daily Dividend Payments on Variable Rate Series A Perpetual Preferred Stock Pursuant to an Amended and Restated SATA Certificate of Designation filed with the Nevada Secretary of State on May 13, 2026, the frequency of regular dividend payments on SATA Stock shall be changed from a monthly basis to a per-Business Day basis. Daily dividends will begin on June 16, 2026 and be paid if and when declared by the board of directors of the Company. Capital Markets Activity On January 27, 2026, the Company issued 1,320,000 shares of SATA Stock in a public follow-on offering registered under the Securities Act (the "Follow-On Offering"). The Company received approximately $109.3 million of net proceeds, after deducting the underwriting discounts and commissions and offering expenses, from the issuance of SATA Stock in the Follow-On Offering. Business combination with Semler Scientific, Inc. On September 22, 2025, the Company entered into the Semler Scientific Merger Agreement with Semler Scientific. On January 16, 2026, pursuant to the Semler Scientific Merger Agreement, Strive Merger Sub, Inc., a wholly owned subsidiary of Strive merged with and into Semler Scientific, with Semler Scientific continuing as the surviving corporation and a wholly owned subsidiary of Strive. As part of the closing of the Semler Scientific Merger, the Company acquired the assets held by Semler Scientific, including 5,048 bitcoin held by Semler Scientific, which includes certain bitcoin held as collateral by a third party as collateral for an outstanding loan, and assumed Semler Scientific's outstanding liabilities. Partial Retirement of 4.25% Convertible Senior Notes due 2030 On January 16, 2026, in connection with the Semler Scientific Merger, we assumed $100.0 million of the 4.25% Convertible Senior Notes due 2030 (the “Semler Convertible Notes”) from Semler Scientific. Upon the completion of the Semler Scientific Merger, Semler Scientific, Strive and U.S Bank Trust Company, National Association, as trustee, entered into a supplemental indenture, dated January 16, 2026 (the “Supplemental Indenture”), to that certain indenture, dated as of January 28, 2025 (such indenture as so amended, supplemented and modified from time to time, the “Convertible Notes Indenture”), pursuant to which Semler Scientific issued its outstanding 4.25% Convertible Senior Notes due 2030 (the “Semler Convertible Notes”). The 22 Supplemental Indenture provides that, as of the effective time of the Semler Scientific Merger (the “Effective Time”), the right of the holders of the Semler Convertible Notes that were outstanding as of the Effective Time to convert each $1,000 principal amount of such Semler Convertible Notes into shares of common stock of Semler Scientific (“Semler Common Stock”) became a right to convert such principal amount of Semler Convertible Notes into the number of shares of Class A Common Stock, that a holder of such number of shares of Semler Common Stock equal to the Conversion Rate (as defined in the Convertible Notes Indenture) immediately prior to the Effective Time would have been entitled to receive upon the completion of the Semler Scientific Merger; provided, however, that at and after the Effective Time (A) Semler Scientific will continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of the Semler Convertible Notes in accordance with the terms of the Convertible Notes Indenture, (B) any amount payable in cash upon conversion of the Semler Convertible Notes in accordance with the terms of the Convertible Notes Indenture will continue to be payable in cash and (C) the Daily VWAP (as defined in the Convertible Notes Indenture) will be calculated (in a manner determined by Semler Scientific in good faith) based on the value of a share of our Class A Common Stock. Upon completion of the Semler Scientific Merger, each then-outstanding share of Semler Common Stock was converted into the right to receive 21.05 shares of Class A Common Stock, resulting in an adjusted initial Conversion Rate of 275.3887 shares of Class A Common Stock per $1,000 principal amount of Semler Convertible Notes, which was further adjusted to an initial Conversion Rate of 13.7694 shares of Class A Common Stock per $1,000 principal amount of Semler Convertible Notes after giving effect to the Reverse Stock Split. In addition, the Supplemental Indenture provides for a guarantee of the Semler Convertible Notes by Strive. As amended by the terms of the Supplemental Indenture, the Semler Convertible Notes are general senior, unsecured obligations of Semler Scientific, guaranteed by Strive, and will mature on August 1, 2030, unless earlier converted, redeemed or repurchased. The Semler Convertible Notes bear interest at a rate of 4.25% per year, payable semiannually in arrears on February 1 and August 1 of each year. In connection with the pricing of the Semler Convertible Notes, Semler Scientific entered into privately negotiated capped call transactions with the Option Counterparties. The capped call transactions cover, subject to customary adjustments, the number of shares of Class A Common Stock that initially underlie the Semler Convertible Notes. The capped call transactions are expected to offset the potential dilution as a result of any conversion of Semler Convertible Notes. On January 22, 2026, the Company entered into separate, privately negotiated exchange agreements with certain holders of the Semler Convertible Notes, representing $90.0 million aggregate principal amount of the Semler Convertible Notes, pursuant to which such holders exchanged their Semler Convertible Notes for approximately 929,999 newly issued shares of SATA Stock concurrent with the closing of the Follow-On Offering. As of January 27, 2026, and following the settlement of the Notes Exchange, $10.0 million aggregate principal amount of the Semler Convertible Notes remained outstanding. During the period from April 1, 2026 to May 12, 2026, the Company repurchased the remaining balance of long-term notes payable, at fair value. As of May 12, 2026, the Company has no short or long-term debt outstanding. Retirement of Acquired Indebtedness On January 16, 2026, in connection with the Semler Scientific Merger, we assumed a $20.0 million loan with Coinbase Credit Inc. from Semler Scientific (the “Coinbase Loan”). On January 27, 2026, we fully retired the Coinbase Loan, resulting in all of Strive's bitcoin holdings being unencumbered following the retirement. Results of Operations The comparability of our operating results for the three months ended March 31, 2026 (Successor) and 2025 (Predecessor) was impacted by our Asset Entities Merger and Semler Scientific Merger and may not be comparable. Comparison of the Three Months Ended March 31, 2026 and the Three Months Ended March 31, 2025 The following table presents information regarding the consolidated results of operations for the three months ended March 31, 2026 (Successor) compared to the three months ended March 31, 2025 (Predecessor) (amounts in thousands, other than percentages): Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 $ % Revenues: Investment advisory fees $ 1,347 $ 1,416 $ (69) (4.9) % Medical device revenues 1,370 — 1,370 100.0 % 23 Other revenue 43 7 36 514.3 % Total revenues 2,760 1,423 1,337 94.0 % Operating expenses: Fund management and administration 1,424 1,411 13 0.9 % Employee compensation and benefits 13,053 2,066 10,987 531.8 % General and administrative expense 5,938 1,906 4,032 211.5 % Marketing and advertising 116 61 55 90.2 % Depreciation and amortization 90 52 38 73.1 % Total operating expenses 20,621 5,496 15,125 275.2 % Investment gains/(losses): Net unrealized loss on digital assets, at fair value (295,778) — (295,778) (100.0) % Net unrealized gain on investments in preferred equity, at fair value 490 — 490 100.0 % Total investment gains/(losses), net (295,288) — (295,288) (100.0) % Net operating loss (313,149) (4,073) (309,076) 7,588.4 % Other income/(expense): Other income 526 324 202 62.3 % Interest expense on long-term notes payable, at fair value (242) — (242) (100.0) % Change in fair value on long-term notes payable, at fair value (2,165) — (2,165) (100.0) % Loss on extinguishment of debt (8,461) — (8,461) (100.0) % Loss on change in fair value of bitcoin held as collateral under Coinbase Loan (2,594) — (2,594) (100.0) % Transaction costs (6,525) — (6,525) (100.0) % Bargain purchase gain 66,704 — 66,704 100.0 % Total other income, net 47,243 324 46,919 14,481.2 % Net loss before income taxes (265,906) (3,749) (262,157) 6,992.7 % Income tax benefit/(expense) — — — — % Net loss $ (265,906) $ (3,749) $ (262,157) 6,992.7 % Dividends on preferred stock (13,454) — (13,454) (100.0) % Net loss attributable to common stockholders $ (279,360) $ (3,749) $ (275,611) 7,351.6 % Investment advisory fees Investment advisory fees was relatively flat, decreasing by less than $0.1 million, or (4.9)%, to $1.3 million for the three months ended March 31, 2026, from $1.4 million for the three months ended March 31, 2025. Medical device revenues Medical device revenues increased by $1.4 million, or 100.0%, to $1.4 million for the three months ended March 31, 2026. This increase was driven by the consummation of the Semler Scientific Merger during the three months ended March 31, 2026, with Strive acquiring all assets and liabilities of Semler Scientific, Inc., including the medical device operations. Other revenue Other revenue remained at less than $0.1 million during all periods. 24 Fund management and administration Fund management and administration increased by a de-minimis amount, or 0.9%, at $1.4 million for both the three months ended March 31, 2026 and the three months ended March 31, 2025. Employee compensation and benefits Employee compensation and benefits increased by $11.0 million, or 531.8%, to $13.1 million for the three months ended March 31, 2026, from $2.1 million for the three months ended March 31, 2025. This increase was primarily a result of stock compensation expense of $6.5 million recorded during the three months ended March 31, 2026, which includes additional stock compensation expense related to employee stock options assumed as part of the Semler Scientific Merger. There was no stock compensation expense during the three months ended March 31, 2025 as performance conditions had not yet been met. This was paired with an increase in employee compensation and benefits as a result of the Semler Scientific Merger during the three months ended March 31, 2026. General and administrative expense General and administrative expense increased by $4.0 million, or 211.5%, to $5.9 million for the three months ended March 31, 2026, from $1.9 million for the three months ended March 31, 2025. This increase was primarily due to an increase in spend on professional services and other printing and filing fees as a result of being a publicly traded company as well as increases as a result of the Semler Scientific Merger. Marketing and advertising Marketing and advertising remained consistent at $0.1 million during all periods. Depreciation and amortization Depreciation and amortization remained at less than $0.1 million during all periods. Net unrealized loss on digital assets, at fair value Net unrealized loss on digital assets, at fair value increased by $295.8 million, or (100.0)%, to $295.8 million for the three months ended March 31, 2026. The Company did not hold any digital assets during the three months ended March 31, 2025. Net unrealized gain on investments in preferred equity, at fair value Net unrealized gain on investments in preferred equity, at fair value increased by $0.5 million, or 100.0%, to $0.5 million for the three months ended March 31, 2026. The Company did not hold any preferred equity investments during the three months ended March 31, 2025. Other income Other income increased by $0.2 million, or 62.3%, to $0.5 million for the three months ended March 31, 2026, from $0.3 million for the three months ended March 31, 2025. This increase was due to increases in holdings of yield-generating assets as a result of the Company's capital markets activity. Interest expense on long-term notes payable, at fair value Interest expense on long-term notes payable, at fair value increased by $0.2 million, or (100.0)%, to $0.2 million for the three months ended March 31, 2026. This increase was due to the assumption of Semler Convertible Notes during the three months ended March 31, 2026, which accrue interest at a rate of 4.250%. Change in fair value on long-term notes payable, at fair value Change in fair value on long-term notes payable, at fair value increased by $2.2 million, or (100.0)%, to $2.2 million for the three months ended March 31, 2026. The Company did not have any long-term notes payable during the three months ended March 31, 2025. Loss on extinguishment of debt Loss on extinguishment of debt increased by $8.5 million, or (100.0)%, to $8.5 million for the three months ended March 31, 2026. During three months ended March 31, 2026, the Company recorded a loss on extinguishment of debt on the partial extinguishment of Semler Convertible Notes as a result of the difference in the fair value of SATA Stock exchanged and the basis of the extinguished Semler Convertible Notes. There was also a loss on extinguishment of debt on the extinguishment of the Coinbase Loan as a result of fees paid for the extinguishment. 25 Loss on change in fair value of bitcoin held as collateral under Coinbase Loan Loss on change in fair value of bitcoin held as collateral under Coinbase Loan increased by $2.6 million, or (100.0)%, to $2.6 million for the three months ended March 31, 2026. This increase was due to the difference between the basis of bitcoin held as collateral by the lender of the Coinbase Loan as compared to the fair value when such collateral was returned to the Company. Transaction costs Investment advisory fees decreased by less than $6.5 million, or (100.0)%, to $6.5 million for the three months ended March 31, 2026. This increase was primarily due to accounting and legal costs incurred related to the Semler Scientific Merger, which did not occur during the three months ended March 31, 2025. Bargain purchase gain Bargain purchase gain increased by $66.7 million, or 100.0%, to $66.7 million for the three months ended March 31, 2026, which was a result of the excess of net assets acquired over total purchase consideration of the Semler Scientific Merger. Dividends on preferred stock Dividends on preferred stock increased by $13.5 million, or 100.0%, to $13.5 million for the three months ended March 31, 2026. The Company declared $3.1250 of dividends on its SATA Stock during the three months ended March 31, 2026. No dividends were declared on the Predecessor's preferred stock during the three months ended March 31, 2025 . Liquidity and Capital Resources Liquidity The following table summarizes Strive's available liquidity (in thousands): March 31, 2026 December 31, 2025 Cash and cash equivalents $ 95,092 $ 67,499 Investments in preferred equity, at fair value 50,510 — Digital assets, at fair value 929,396 668,486 Total liquidity $ 1,074,998 $ 735,985 Our principal sources of liquidity are cash and cash equivalents and investments in preferred equity, at fair value. Cash and cash equivalents may include holdings in bank demand deposits, money market investments, and certificates of deposit. Strive considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Investments in preferred equity, at fair value consists of shares of STRC Stock. Although Strive does not actively trade its investments in preferred equity, Strive considers such holdings as available to meet short and long-term liquidity needs. Although the Company holds significant investments in bitcoin, all of which are unencumbered, the Company's intention is to hold these assets and not liquidate any such investments for working capital needs. Management believes that Strive's liquidity position puts the Company in a position of strategic advantage to execute on strategic initiatives and meet working capital needs for at least the next twelve months. Capital resources We anticipate being able to use proceeds from capital markets activity to meet our short and long-term liquidity needs. As of March 31, 2026, the Company had the availability to raise $276.3 million and $487.8 million through the issuance and sale of its Class A common stock and SATA Stock, respectively, pursuant to the respective sales agreements. Contractual and Other Obligations As of March 31, 2026, our material contractual obligations and commitments primarily include $10.0 million aggregate principal balance of long-term notes payable, operating leases, and employee compensation agreements. During the period from April 1, 2026 to May 12, 2026, the Company repurchased the remaining balance of long-term notes payable, at fair value. As of May 12, 2026, the Company has no short or long-term debt outstanding. Strive maintains operating leases for its office locations in Dallas, Texas and Dublin, Ohio, with a sub-lease with a third-party in place for the Dublin, Ohio office location with substantially the same terms as Strive’s lease. At March 31, 2026, Strive had operating lease payment obligations of approximately $5.2 million, of which $0.7 million is payable within 12 months. Of these 26 amounts, $2.2 million of the future lease obligations, $0.3 million of which is due within 12 months, relate to amounts that will be recovered through lease payments from our sub-tenant for the Dublin, Ohio lease. The following table summarizes Strive's cash flow activities (in thousands): Successor Predecessor Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Net cash used in operating activities $ (30,989) $ (5,588) Net cash provided by (used in) investing activities (123,789) 8,221 Net cash provided by financing activities 182,371 — Net increase in cash and cash equivalents $ 27,593 $ 2,633 Net cash used in operating activities The primary sources of our cash and cash equivalents from operating activities are collections from customers related to investment advisory services, medical device operations, and interest collections from our holdings of cash and cash equivalents. Our primary uses of cash and cash equivalents are from general and administrative expenses and employee-related expenditures. Non-cash items to reconcile net loss to net cash and cash equivalents used in operating activities include depreciation and amortization, unrealized gain (loss) on digital assets, at fair value, unrealized gain (loss) on investments in preferred equity, at fair value, share-based compensation expense, and other non-cash realized and unrealized amounts. For the three months ended March 31, 2026, net cash and cash equivalents used in operating activities was $31.0 million. This was primarily driven by a $265.9 million net loss generated by Strive, which was driven by net investment losses of $295.3 million, operating expenses of $20.6 million, transaction costs of $6.5 million, and other non-cash realized and unrealized losses of $13.2 million, partially offset by total revenues of $2.8 million, net other income of $0.3 million, and a bargain purchase gain of $66.7 million. Strive’s net loss was adjusted for non-cash items totaling $248.4 million. Further, Strive had a net change in operating assets and liabilities of $13.5 million, driven by a decrease in accounts payable and other liabilities of $16.0 million, which was partially offset by an increase in compensation and benefits payable of $1.1 million, a decrease in prepaid expenses of $0.7 million and a decrease in other current assets of $0.6 million. For the three months ended March 31, 2025, net cash and cash equivalents used in operating activities was $5.6 million. This was primarily driven by a $3.7 million net loss generated by Strive, which was driven by operating expenses of $5.5 million, partially offset by total revenues of $1.4 million and net other income of $0.3 million. Strive’s net loss was adjusted for non-cash items totaling $0.1 million. Further, Strive had a net change in operating assets and liabilities of $2.0 million, driven by an increase in other non-current assets of $0.8 million, an increase in other current assets of $0.4 million, and an increase in prepaid expenses of $0.2 million, coupled with a decrease in accounts payable and other liabilities of $0.5 million, and a decrease in compensation and benefits payable of $0.1 million. Net cash provided by (used in) investing activities For the three months ended March 31, 2026, net cash and cash equivalents used in investing activities was $123.8 million, primarily due to purchases of digital asset investments of $77.3 million and purchases of investments in preferred equity of $50.5 million, partially offset by cash acquired through the Semler Scientific Merger of $3.5 million and $0.5 million of cash received from return of capital dividends on our investments in preferred equity. For the three months ended March 31, 2025, net cash and cash equivalents provided by investing activities was $8.2 million, primarily due to net proceeds from short-term investments of $8.3 million, partially offset by purchases of property, plant, and equipment of less than $0.1 million. Net cash provided by financing activities For the three months ended March 31, 2026, net cash and cash equivalents provided by financing activities was $182.4 million, primarily due to proceeds from the issuance of SATA Stock and Class A common stock of $129.8 million and $95.0 million, respectively, which were partially offset by the payment of financing costs of $10.8 million. The Company also paid dividends on preferred stock of $10.9 million and extinguished the Coinbase Loan for $20.3 million. There were no financing activities for the three months ended March 31, 2025. 27 Non-GAAP Financial Measures This Quarterly Report contains certain non-GAAP financial measures, consisting of non-GAAP adjusted net income (loss), non-GAAP adjusted net income (loss) attributable to common stockholders and non-GAAP adjusted net income (loss) attributable to common stockholders per diluted common share. Non-GAAP financial measures are subject to material limitations as they are not measurements prepared in accordance with GAAP and are not a substitute for such measurements. Our non-GAAP financial measures are not meant to be considered in isolation and should be read only in conjunction with our consolidated financial statements, which have been prepared in accordance with GAAP. We rely primarily on such consolidated financial statements to understand, manage, and evaluate our business performance and use the non-GAAP financial measures as supplemental information. Reconciliations of reported GAAP historic measures to adjusted non-GAAP measures are included in the financial schedules contained in this Quarterly Report. Non-GAAP adjusted net income (loss) Non-GAAP adjusted net income (loss), non-GAAP adjusted net income (loss) attributable to common stockholders, and the related non-GAAP adjusted net income (loss) per diluted common share excludes the impact of (i) share-based compensation expense, (ii) depreciation and amortization, (iii) change in fair value on long-term notes payable, at fair value, (iv) loss on extinguishment of debt, (v) loss on change in fair value of bitcoin held as collateral under Coinbase Loan, (vi) transaction costs, and (vii) bargain purchase gain. We believe these measures offer management and investors insight as they exclude significant non-cash and/or non-recurring items. The following provides GAAP measures of net loss, net loss attributable to common stockholders, and net loss per diluted common share and the details with respect to reconciling the line items to non-GAAP adjusted net income (loss), non-GAAP adjusted net income (loss) attributable to common stockholders, and non-GAAP adjusted net income (loss) per diluted common share (all amounts in thousands, other than share and per share information): Successor Predecessor Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Net loss $ (265,906) $ (3,749) Share-based compensation expense 6,529 — Depreciation and amortization 90 52 Change in fair value on long-term notes payable, at fair value 2,165 — Loss on extinguishment of debt 8,461 — Loss on change in fair value of bitcoin held as collateral under Coinbase Loan 2,594 — Transaction costs 6,525 — Bargain purchase gain (66,704) — Non-GAAP adjusted net income (loss) $ (306,246) $ (3,697) Dividends on preferred stock (13,454) — Non-GAAP adjusted net loss attributable to common stockholders $ (319,700) $ (3,697) Weighted average number of diluted common shares outstanding 61,630,003 2,275,940 Net loss per diluted common share $ (4.53) $ (1.65) Non-GAAP adjusted net loss per diluted common share $ (5.19) $ (1.62) Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP, which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and equity, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from these estimates and assumptions. Critical accounting estimates involve a significant level of estimation uncertainty and are estimates that have had or are reasonably likely to have a material impact on our financial condition or results of operations. 28