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 the 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 the Company’s Annual Report on Form 10-K and the risks that can be found in the 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 the 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 the 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 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 compound 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 that 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, as this publicly traded security 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 our balance sheet strategy, Strive is focused on advancing innovation within the capital markets by modernizing established financing structures. The Company has developed SATA Stock, our perpetual preferred equity instrument that incorporates an at‑the‑market (“ATM”) program, creating a flexible and continuous capital formation mechanism, while being the first listed security in US capital markets history to pay dividends to holders each business day. This approach transforms a historically static capital structure into a dynamic and adaptive capital funding platform. Through Strive's continued innovation, we seek to combine legacy market frameworks with modern assets, positioning the Company at the intersection of institutional finance and a bitcoin‑based reserve strategy. 24 As of June 30, 2026, the Company manages over $2.8 billion in AUM. These activities provide recurring, fee-based revenue streams which increase with AUM. 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, with our primary focus being (i) acquiring bitcoin through open market purchases using available cash, which may be raised from our operating activities as well as accretive capital raising initiatives, such as issuing equity and fixed income securities via our ATM programs, along with other capital raises and offerings and (ii) acquiring bitcoin through other strategies, such as acquiring bitcoin through strategic M&A activity or other transactions, resulting in the acquisition of bitcoin with a differentiated value proposition relative to open market purchases. As of June 30, 2026, our digital assets, at fair value totaled approximately $1.2 billion within our consolidated statement of financial condition, consisting of approximately 19,864 bitcoin. We also held $145.5 million in cash and cash equivalents and STRC Stock with a fair value of $42.9 million, putting us in a position to strategically deploy capital to bolster our treasury. As of August 7, 2026, our cash and cash equivalents totaled $154.9 million, while our position in the STRC Stock had a fair value of $48.0 million. Our bitcoin treasury totaled 20,167 bitcoin as of August 7, 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 Bitcoin Update During the three months ended June 30, 2026, the Company acquired 6,236 bitcoin at an average cost of $74,290 per bitcoin. As of June 30, 2026, the Company holds 19,864 bitcoin. 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 changed from being paid, if and when declared by the board of directors of the Company, on a monthly basis to a per-Business Day basis beginning on June 16, 2026. Capital Markets Activity During the three months ended June 30, 2026, the Company issued 12.8 million shares of Class A common stock for aggregate gross proceeds of $211.3 million under the Company's at-the-market common equity program. During the three months ended June 30, 2026, the Company issued 3,456,308 shares of SATA Stock for aggregate gross proceeds of $345.7 million under the Company's at-the-market preferred equity program. 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. 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. During the three months ended June 30, 2026, the Company retired the remaining long-term notes payable, at fair value, resulting in no Semler Convertible Notes being outstanding as of June 30, 2026. 25 Results of Operations The comparability of our operating results for the three and six months ended June 30, 2026 (Successor) and 2025 (Predecessor) were impacted by our Asset Entities Merger and Semler Scientific Merger and may not be comparable. Comparison of the Three Months Ended June 30, 2026 and the Three Months Ended June 30, 2025 The following table presents information regarding the consolidated results of operations for the three months ended June 30, 2026 (Successor) compared to the three months ended June 30, 2025 (Predecessor) (amounts in thousands, other than percentages): Successor Predecessor Increase (Decrease) Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 $ % Revenues: Investment advisory fees $ 1,512 $ 1,488 $ 24 1.6 % Medical device revenues 1,388 — 1,388 100.0 % Other revenue 41 23 18 78.3 % Total revenues 2,941 1,511 1,430 94.6 % Operating expenses: Fund management and administration 1,489 1,588 (99) (6.2) % Employee compensation and benefits 16,314 2,005 14,309 713.7 % General and administrative expense 6,428 1,452 4,976 342.7 % Marketing and advertising 79 102 (23) (22.5) % Depreciation and amortization 86 54 32 59.3 % Total operating expenses 24,396 5,201 19,195 369.1 % Investment losses: Net unrealized loss on digital assets, at fair value (228,031) — (228,031) (100.0) % Net unrealized loss on investments in preferred equity, at fair value (5,962) — (5,962) (100.0) % Other investment loss (2,801) — (2,801) (100.0) % Total investment losses (236,794) — (236,794) (100.0) % Net operating loss (258,249) (3,690) (254,559) 6,898.6 % Other income/(expense): Other income 955 252 703 279.0 % Interest expense on long-term notes payable, at fair value (40) — (40) (100.0) % Change in fair value on long-term notes payable, at fair value (299) — (299) (100.0) % Gain on extinguishment of debt 30 — 30 100.0 % Transaction costs — (5,437) 5,437 100.0 % Total other income/(expense) 646 (5,185) 5,831 (112.5) % Net loss before income taxes (257,603) (8,875) (248,728) 2,802.6 % Income tax benefit/(expense) — — — — % Net loss $ (257,603) $ (8,875) $ (248,728) 2,802.6 % Dividends on preferred stock (26,209) — (26,209) (100.0) % Net loss attributable to common stockholders $ (283,812) $ (8,875) $ (274,937) 3,097.9 % Investment advisory fees Investment advisory fees was relatively flat at $1.5 million for both the three months ended June 30, 2026 and 2025. 26 Medical device revenues Medical device revenues increased by $1.4 million, to $1.4 million for the three months ended June 30, 2026. This increase was driven by the consummation of the Semler Scientific Merger in early 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. Fund management and administration Fund management and administration decreased marginally by $0.1 million, or (6.2)%, to $1.5 million for the three months ended June 30, 2026, from $1.6 million for the three months ended June 30, 2025. Employee compensation and benefits Employee compensation and benefits increased by $14.3 million, or 713.7%, to $16.3 million for the three months ended June 30, 2026, from $2.0 million for the three months ended June 30, 2025. This increase was primarily a result of stock compensation expense of $5.7 million recorded during the three months ended June 30, 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 June 30, 2025 as performance conditions had not yet been met. This was paired with an increase in employee bonus accruals and an increase in employee compensation and benefits as a result of the Semler Scientific Merger during the three months ended June 30, 2026. General and administrative expense General and administrative expense increased by $5.0 million, or 342.7%, to $6.4 million for the three months ended June 30, 2026, from $1.5 million for the three months ended June 30, 2025. This increase was primarily due to an increase in spend on professional services, insurance, and other exchange listing and filing fees as a result of being a publicly traded company, increases related to our bitcoin treasury operations, including custodial fees, 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 $228.0 million, to $228.0 million for the three months ended June 30, 2026. The Company did not hold any digital assets during the three months ended June 30, 2025. Net unrealized loss on investments in preferred equity, at fair value Net unrealized loss on investments in preferred equity, at fair value increased by $6.0 million, to $6.0 million for the three months ended June 30, 2026. The Company did not hold any preferred equity investments during the three months ended June 30, 2025. Other investment loss Other investment loss increased by $2.8 million, to $2.8 million for the three months ended June 30, 2026 as a result of the change in fair value of other financial instruments. The Company did not have any such instruments during the three months ended June 30, 2025. Other income Other income increased by $0.7 million, or 279.0%, to $1.0 million for the three months ended June 30, 2026, from $0.3 million for the three months ended June 30, 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 less than $0.1 million from the three months ended June 30, 2025 to the three months ended June 30, 2026. This increase was due to the assumption of the Semler Convertible Notes concurrent with the Semler Scientific Merger in early 2026. The Company retired all remaining outstanding Semler Convertible Notes during the three months ended June 30, 2026. 27 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 $0.3 million, to $0.3 million for the three months ended June 30, 2026. The Company did not have any long-term notes payable during the three months ended June 30, 2025. Gain on extinguishment of debt Gain on extinguishment of debt was less than $0.1 million for the three months ended June 30, 2026. There were no debt extinguishments during the three months ended June 30, 2025. Transaction costs Transaction costs decreased by $5.4 million, from $5.4 million for the three months ended June 30, 2025. The Company incurred transaction costs related to the Asset Entities Merger during the three months ended June 30, 2025, while no such costs were incurred during the three months ended June 30, 2026. Dividends on preferred stock Dividends on preferred stock increased by $26.2 million, to $26.2 million for the three months ended June 30, 2026. The Company declared $3.7932 of dividends per share of its SATA Stock during the three months ended June 30, 2026. No dividends were declared on the Predecessor's preferred stock during the three months ended June 30, 2025. Comparison of the Six Months Ended June 30, 2026 and the Six Months Ended June 30, 2025 The following table presents information regarding the consolidated results of operations for the six months ended June 30, 2026 (Successor) compared to the six months ended June 30, 2025 (Predecessor) (amounts in thousands, other than percentages): Successor Predecessor Increase (Decrease) Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 $ % Revenues: Investment advisory fees $ 2,859 $ 2,904 $ (45) (1.5) % Medical device revenues 2,758 — 2,758 100.0 % Other revenue 84 30 54 180.0 % Total revenues 5,701 2,934 2,767 94.3 % Operating expenses: Fund management and administration 2,913 2,999 (86) (2.9) % Employee compensation and benefits 29,367 4,071 25,296 621.4 % General and administrative expense 12,366 3,358 9,008 268.3 % Marketing and advertising 195 163 32 19.6 % Depreciation and amortization 176 106 70 66.0 % Total operating expenses 45,017 10,697 34,320 320.8 % Investment losses: Net unrealized loss on digital assets, at fair value (523,809) — (523,809) (100.0) % Net unrealized loss on investments in preferred equity, at fair value (5,472) — (5,472) (100.0) % Other investment loss (2,801) — (2,801) (100.0) % Total investment losses (532,082) — (532,082) (100.0) % Net operating loss (571,398) (7,763) (563,635) 7,260.5 % Other income/(expense): Other income 1,481 576 905 157.1 % Interest expense on long-term notes payable, at fair value (282) — (282) (100.0) % Change in fair value on long-term notes payable, at fair value (2,464) — (2,464) (100.0) % 28 Loss on extinguishment of debt (8,431) — (8,431) (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) (5,437) (1,088) 20.0 % Bargain purchase gain 66,704 — 66,704 100.0 % Total other income/(expense) 47,889 (4,861) 52,750 (1,085.2) % Net loss before income taxes (523,509) (12,624) (510,885) 4,046.9 % Income tax benefit/(expense) — — — — % Net loss $ (523,509) $ (12,624) $ (510,885) 4,046.9 % Dividends on preferred stock (39,663) — (39,663) (100.0) % Net loss attributable to common stockholders $ (563,172) $ (12,624) $ (550,548) 4,361.1 % Investment advisory fees Investment advisory fees was relatively flat at $2.9 million for both the six months ended June 30, 2026 and 2025. Medical device revenues Medical device revenues increased by $2.8 million, to $2.8 million for the six months ended June 30, 2026. This increase was driven by the consummation of the Semler Scientific Merger during the six months ended June 30, 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. Fund management and administration Fund management and administration decreased marginally by $0.1 million, or (2.9)%, to $2.9 million for the six months ended June 30, 2026, from $3.0 million for the six months ended June 30, 2025. Employee compensation and benefits Employee compensation and benefits expense increased by $25.3 million, or 621.4%, to $29.4 million for the six months ended June 30, 2026, from $4.1 million for the six months ended June 30, 2025. This increase was primarily a result of stock compensation expense of $12.2 million recorded during the six months ended June 30, 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 six months ended June 30, 2025 as performance conditions had not yet been met. This was paired with an increase in employee bonus accruals and an increase in employee compensation and benefits as a result of the Semler Scientific Merger during the six months ended June 30, 2026. General and administrative expense General and administrative expense increased by $9.0 million, or 268.3%, to $12.4 million for the six months ended June 30, 2026, from $3.4 million for the six months ended June 30, 2025. This increase was primarily due to an increase in spend on professional services, insurance, and other exchange listing and filing fees as a result of being a publicly traded company, increases related to our bitcoin treasury operations, including custodial fees, as well as increases as a result of the Semler Scientific Merger. Marketing and advertising Marketing and advertising was relatively flat at $0.2 million during both the six months ended June 30, 2026 and 2025. Depreciation and amortization Depreciation and amortization increased by less than $0.1 million, or 66.0%, to $0.2 million for the six months ended June 30, 2026, from $0.1 million for the six months ended June 30, 2025. This increase was driven by amortization and depreciation on assets acquired as part of the Semler Scientific Merger. Net unrealized loss on digital assets, at fair value Net unrealized loss on digital assets, at fair value increased by $523.8 million, or (100.0)%, to $523.8 million for the six months ended June 30, 2026. The Company did not hold any digital assets during the six months ended June 30, 2025. Net unrealized loss on investments in preferred equity, at fair value 29 Net unrealized loss on investments in preferred equity, at fair value increased by $5.5 million, to $5.5 million for the six months ended June 30, 2026. The Company did not hold any preferred equity investments during the six months ended June 30, 2025. Other investment loss Other investment loss increased by $2.8 million, to $2.8 million for the six months ended June 30, 2026 as a result of the change in fair value of other financial instruments. The Company did not have any such instruments during the six months ended June 30, 2025. Other income Other income increased by $0.9 million, or 157.1%, to $1.5 million for the six months ended June 30, 2026, from $0.6 million for the six months ended June 30, 2025. This increase was due to an increase in the average level of holdings of interest-bearing assets during 2026 as compared to 2025. Interest expense on long-term notes payable, at fair value Interest expense on long-term notes payable, at fair value increased by $0.3 million from the six months ended June 30, 2025 to the six months ended June 30, 2026. This increase was due to the assumption of the Semler Convertible Notes concurrent with the Semler Scientific Merger in early 2026. The Company retired all assumed Semler Convertible Notes during the six months ended June 30, 2026. 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 $2.5 million from the six months ended June 30, 2025 to the six months ended June 30, 2026. The Company did not have any long-term notes payable during the six months ended June 30, 2025. Loss on extinguishment of debt Loss on extinguishment of debt increased by $8.4 million from the six months ended June 30, 2025 to the six months ended June 30, 2026. During the six months ended June 30, 2026, the Company recorded a loss on extinguishment of debt on the extinguishments of Semler Convertible Notes and the Coinbase Loan based on the difference in the fair value of consideration exchanged and the basis of the extinguished liabilities. 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, to $2.6 million for the six months ended June 30, 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 Transaction costs increased by $1.1 million, or 20.0%, to $6.5 million for the six months ended June 30, 2026, from $5.4 million for the six months ended June 30, 2025. The Company's transaction costs primarily relate to accounting and legal costs incurred in conjunction with the Asset Entities Merger and the Semler Scientific Merger. Bargain purchase gain Bargain purchase gain increased by $66.7 million, to $66.7 million for the six months ended June 30, 2026, which was the 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 $39.7 million, to $39.7 million for the six months ended June 30, 2026. The Company declared $6.9182 of dividends per share of its SATA Stock during the six months ended June 30, 2026. No dividends were declared on the Predecessor's preferred stock during the six months ended June 30, 2025. 30 Liquidity and Capital Resources Liquidity The following table summarizes Strive's available liquidity (in thousands): June 30, 2026 December 31, 2025 Cash and cash equivalents $ 145,466 $ 67,499 Investments in preferred equity, at fair value 42,854 — Digital assets, at fair value 1,164,639 668,486 Total liquidity $ 1,352,959 $ 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 currently actively trade its investments in preferred equity, Strive considers such holdings as available to meet short and long-term liquidity needs. In addition, the Company holds significant investments in bitcoin, all of which are unencumbered. 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 June 30, 2026, the Company had the availability to raise $4.4 billion through issuance and sales of its Class A common stock and SATA Stock pursuant to the respective sales agreements. Contractual and Other Obligations As of June 30, 2026, our material contractual obligations and commitments primarily include operating leases and employee compensation agreements. Strive did not have any long-term debt or other long-term liabilities as of December 31, 2025. 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 June 30, 2026, Strive had operating lease payment obligations of approximately $5.1 million, of which $0.7 million is payable within 12 months. Of these 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 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Net cash used in operating activities $ (39,400) $ (10,016) Net cash provided by (used in) investing activities (585,369) 16,476 Net cash provided by financing activities 702,736 — Net increase in cash and cash equivalents $ 77,967 $ 6,460 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 for general and administrative expenses and employee-related expenditures. Non-cash items used 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, loss on extinguishment of debt, share-based compensation expense, and other non-cash realized and unrealized amounts. 31 For the six months ended June 30, 2026, net cash and cash equivalents used in operating activities was $39.4 million. This was primarily driven by a $523.5 million net loss generated by Strive, which was driven by net investment losses of $532.1 million, operating expenses of $45.0 million, transaction costs of $6.5 million, and other non-cash realized and unrealized losses of $13.8 million, partially offset by total revenues of $5.7 million, other income of $1.5 million, and a bargain purchase gain of $66.7 million. Strive’s net loss was adjusted for non-cash items totaling $491.3 million. Further, Strive had a net change in operating assets and liabilities of $7.2 million, driven by a decrease in accounts payable and other liabilities of $16.5 million, which was partially offset by an increase in compensation and benefits payable of $7.1 million, a decrease in prepaid expenses of $1.3 million and a decrease in other current assets of $1.2 million. For the six months ended June 30, 2025, net cash and cash equivalents used in operating activities was $10.0 million. This was primarily driven by a $12.6 million net loss generated by Strive, which was driven by operating expenses of $10.7 million and transaction costs of $5.4 million, partially offset by total revenues of $2.9 million and net other income of $0.6 million. Strive’s net loss was adjusted for non-cash items totaling $0.3 million. Further, Strive had a net change in operating assets and liabilities of $2.3 million, driven by an increase in accounts payable and other liabilities of $4.0 million, partially offset by an increase in other non-current assets of $0.8 million, an increase in other current assets of $0.4 million, an increase in prepaid expenses of $0.4 million, and a decrease in compensation and benefits payable of $0.1 million. Net cash provided by (used in) investing activities For the six months ended June 30, 2026, net cash and cash equivalents used in investing activities was $585.4 million, primarily due to purchases of digital asset investments of $540.6 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 $2.2 million of cash received from return of capital dividends on our investments in preferred equity. For the six months ended June 30, 2025, net cash and cash equivalents provided by investing activities was $16.5 million, primarily due to net proceeds from short-term investments of $16.6 million, partially offset by purchases of intangible assets of $0.1 million. Net cash provided by financing activities For the six months ended June 30, 2026, net cash and cash equivalents provided by financing activities was $702.7 million, primarily due to proceeds from the issuance of SATA Stock and Class A common stock of $475.5 million and $306.2 million, respectively, which were partially offset by the payment of financing costs of $14.9 million. The Company also paid dividends on preferred stock of $33.2 million and extinguished the Coinbase Loan and remaining Semler Convertible Notes for $20.3 million and $10.0 million, respectively, and paid withholding taxes on the vesting of employee restricted stock of $0.5 million. There were no financing activities for the six months ended June 30, 2025. 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) (gain)/loss on extinguishment of debt, (v) loss on change in fair value of bitcoin held as collateral under Coinbase Loan, (vi) transaction costs, (vii) bargain purchase gain, and (viii) other investment loss. 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 32 non-GAAP adjusted net income (loss) per diluted common share (all amounts in thousands, other than share and per share information): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Successor Predecessor Successor Predecessor Net loss $ (257,603) $ (8,875) $ (523,509) $ (12,624) Share-based compensation expense 5,684 — 12,213 — Depreciation and amortization 86 54 176 106 Other investment loss 2,801 — 2,801 — Change in fair value on long-term notes payable, at fair value 299 — 2,464 — (Gain)/loss on extinguishment of debt (30) — 8,431 — Loss on change in fair value of bitcoin held as collateral under Coinbase Loan — — 2,594 — Transaction costs — 5,437 6,525 5,437 Bargain purchase gain — — (66,704) — Non-GAAP adjusted net income (loss) $ (248,763) $ (3,384) $ (555,009) $ (7,081) Dividends on preferred stock (26,209) — (39,663) — Non-GAAP adjusted net loss attributable to common stockholders $ (274,972) $ (3,384) $ (594,672) $ (7,081) Weighted average number of diluted common shares outstanding 75,275,806 2,300,998 68,490,600 2,288,538 Net loss per diluted common share $ (3.77) $ (3.86) $ (8.22) $ (5.52) Non-GAAP adjusted net loss per diluted common share $ (3.65) $ (1.47) $ (8.68) $ (3.09) 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.