StableCoinX Inc. 10-Q

Item 1. Financial Statements StablecoinX Inc. and Subsidiaries Condensed Consolidated Balance Sheets As of June 30, 2026 and December 31, 2025 (Unaudited) As of: June 30, December 31, 2026 2025 Assets: Current assets: Cash $ 18,856,144 $ 18,708 Digital assets receivable - related party 61,468 - Digital assets - restricted 53,366 97,912 Prepaid insurance 25,210 105,065 Prepaid expenses and other current assets 42,149 10,000 Total current assets 19,038,337 231,685 Digital intangible assets 212,918,841 - Intangible assets, net 602,000 452,250 Total assets $ 232,559,178 $ 683,935 Liabilities and stockholders’ equity: Current liabilities: Convertible demand notes payable - former sponsors $ 6,879,325 $ - Demand notes - related party 118,796 97,912 Accounts payable 216,764 4,386 Accounts payable - related party 340,000 20,800 Accrued expenses 6,022,119 39,900 Total current liabilities 13,577,004 162,998 Warrant liability 4,715,000 - Total liabilities 18,292,004 162,998 Commitments and contingencies (Note 13) Stockholders’ equity: Preferred stock - $ 0.0001 par value; 1,000,000 and zero shares authorized at June 30, 2026 and December 31, 2025, respectively; zero shares issued or outstanding at June 30, 2026 and December 31, 2025, respectively Class A common stock - $ 0.0001 par value; 500,000,000 and 50,000,000 shares authorized at June 30, 2026 and December 31, 2025, respectively; 24,029,375 and zero shares issued or outstanding at June 30, 2026 and December 31, 2025, respectively 2,403 - Class B common stock - $ 0.0001 par value; 50,000,000 and 10,000,000 shares authorized as of June 30, 2026 and December 31, 2025, respectively; 3,157,754 and 700,000 shares issued or outstanding as of June 30, 2026 and December 31, 2025, respectively; 316 70 Additional paid-in capital 249,170,198 802,430 Accumulated deficit ( 34,905,743 ) ( 281,563 ) Total stockholders’ equity 214,267,174 520,937 Total liabilities and stockholders’ equity $ 232,559,178 $ 683,935 See accompanying notes to the condensed consolidated financial statements. 1 StablecoinX Inc. and Subsidiaries Condensed Consolidated Statements of Operations For the three and six months ended June 30, 2026 and for the Period from June 30, 2025 (Inception) through June 30, 2025 (Unaudited) Three months ended Six months ended For the period from June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Revenue $ 62,372 $ 63,038 $ - Operating expenses: Cost of revenue 24,804 24,804 - Selling, general and administrative 175,843 480,848 26,071 Research and development 24,804 138,711 - Amortization expense 25,125 50,250 - Impairment of digital intangible assets 36,201,740 36,201,740 - Change in fair value of digital assets - restricted 17,659 46,116 - Change in fair value of liabilities denominated in digital assets ( 24,135 ) ( 24,135 ) - Change in fair value of related party demand notes ( 17,659 ) ( 46,116 ) - Total operating expenses 36,428,181 36,872,218 26,071 Loss from operations ( 36,365,809 ) ( 36,809,180 ) ( 26,071 ) Change in fair value of warrant liabilities ( 2,185,000 ) ( 2,185,000 ) - Loss before income taxes ( 34,180,809 ) ( 34,624,180 ) ( 26,071 ) Provision for income taxes - - - Net loss $ ( 34,180,809 ) $ ( 34,624,180 ) $ ( 26,071 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 2,238,201 1,473,349 700,000 Net loss per share attributable to common stockholders, basic and diluted $ ( 15.27 ) $ ( 23.50 ) $ ( 0.04 ) See accompanying notes to the condensed consolidated financial statements. 2 StablecoinX Inc. and Subsidiaries Condensed Consolidated Statements of Stockholders’ Equity For the three and six months ended June 30, 2026 and for the Period from June 30, 2025 (Inception) through June 30, 2025 (Unaudited) Class A Class B Additional Total Common Stock Common Stock Paid-In Accumulated Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Three months ended June 30, 2026: Balance at March 31, 2026: - $ - 700,000 $ 70 $ 802,430 $ ( 724,934 ) $ 77,566 Retroactive application of recapitalization 700,000 70 - - ( 70 ) - - Adjusted balance - beginning of period 700,000 70 700,000 70 802,360 ( 724,934 ) 77,566 Merger and PIPE financing 23,329,375 2,333 2,457,754 246 248,359,756 - 248,362,335 Stock-based compensation expense - - - - 8,082 - 8,082 Net loss - - - - - ( 34,180,809 ) ( 34,180,809 ) Balance at June 30, 2026: 24,029,375 $ 2,403 3,157,754 $ 316 $ 249,170,198 $ ( 34,905,743 ) $ 214,267,174 Six months ended June 30, 2026: Balance at December 31, 2025: - $ - 700,000 $ 70 $ 802,430 $ ( 281,563 ) $ 520,937 Retroactive application of recapitalization 700,000 70 - - ( 70 ) - - Adjusted balance - beginning of period 700,000 70 700,000 70 802,360 ( 281,563 ) 520,937 Merger and PIPE financing 23,329,375 2,333 2,457,754 246 248,359,756 - 248,362,335 Stock-based compensation expense - - - - 8,082 - 8,082 Net loss - - - - - ( 34,624,180 ) ( 34,624,180 ) Balance at June 30, 2026: 24,029,375 $ 2,403 3,157,754 $ 316 $ 249,170,198 $ ( 34,905,743 ) $ 214,267,174 Period from inception through June 30, 2025: Inception - $ - - $ - $ - $ - $ - Retroactive application of recapitalization - - - - - - Adjusted balance - beginning of period - - - - - - - Issuance of common stock 700,000 70 700,000 70 802,360 - 802,500 Net loss - - - - - ( 26,071 ) ( 26,071 ) Balance at June 30, 2025: 700,000 $ 70 700,000 $ 70 $ 802,360 $ ( 26,071 ) $ 776,429 See accompanying notes to the condensed consolidated financial statements. 3 StablecoinX Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2026 and for the Period from June 30, 2025 (Inception) through June 30, 2025 (Unaudited) Six months ended For the period from June 30, 2025 (Inception) through June 30, June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 34,624,180 ) $ ( 26,071 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 8,082 - Impairment of digital assets 36,201,740 - Amortization expense 50,250 - Change in fair value of digital assets - restricted 46,116 - Change in fair value of related party demand notes ( 46,116 ) - Change in fair value of warrant liabilities ( 2,185,000 ) - Staking revenue from digital assets ( 1,570 ) - Changes in operating assets and liabilities: Digital assets receivable - related party ( 61,468 ) - Prepaid insurance 79,855 - Accounts payable 12,378 - Accounts payable - related party 340,000 26,071 Accrued expenses 98,233 - Net cash provided by operating activities ( 81,680 ) - Cash flows from financing activities: Proceeds from issuance of demand notes - related party 67,000 - Merger and PIPE financing 18,852,116 - Net cash provided by financing activities 18,919,116 - Net change in cash 18,837,436 - Cash - beginning of period 18,708 - Cash - end of period $ 18,856,144 $ - Supplemental disclosures of noncash investing and financing activities: Contribution of intangible asset $ - $ 502,500 Loan of digital assets and issuance of related party demand notes $ - $ - Receivable from stockholders for Class B common stock issuance $ - $ 300,000 Contribution of digital intangible assets $ 249,120,581 $ - Assumption of warrant liabilities $ 6,900,000 $ - Assumption of convertible demand notes payable - sponsors $ 5,883,986 $ - Transaction costs in accounts payable and accrued liabilities $ 3,481,156 $ - Capitalized software costs included in accounts payable $ 200,000 See accompanying notes to the condensed consolidated financial statements. 4 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Note 1. Organization and Description of Business Organization StablecoinX Inc. (“StablecoinX”, the “Company”), together with its two former wholly-owned subsidiaries StableCoinX SPAC Merger Sub LLC (“SPAC Merger Sub”), and StableCoinX Company Merger Sub, Inc. (“Company Merger Sub”)) was incorporated on July 7, 2025 as a Delaware corporation. The Company has selected December 31 as its fiscal year end. The Company was founded by Young Cho, who was the Chief Executive Officer and Director of TLGY Acquisition Corporation (“TLGY”), and Edward Chen, the managing member of the sponsors of TLGY (collectively, the “Founders”) (see Notes 5 and 14). Business Combination Agreement On July 21, 2025, the Company entered into a business combination agreement (as amended, the “Business Combination Agreement”) with TLGY, StablecoinX Assets, Inc, a Delaware corporation, (“SC Assets”), SPAC Merger Sub and Company Merger Sub. On June 25, 2026 (the “Closing”), the parties consummated the transactions contemplated by the Business Combination Agreement and the related agreements (collectively, the “Merger”), pursuant to which, among other things, (1) SPAC Merger Sub merged with and into TLGY, with TLGY continuing as the surviving company, and (2) immediately following, Company Merger Sub merged with and into SC Assets, with SC Assets continuing as the surviving company. At Closing, TLGY and SC Assets became wholly owned subsidiaries of the Company and the Company became a publicly traded company. The ongoing business operations of the Company are that of StablecoinX Assets, Inc., which was incorporated on June 30, 2025. Beginning on June 26, 2026, the Company’s Class A common stock and warrants trade on Nasdaq under the ticker symbols “USDE” and “USDEW”, respectively (see Note 3). Accounting for the Merger The Merger between the Company, SC Assets and TLGY was accounted for as a reverse recapitalization, with TLGY being treated as the “acquired” company for financial reporting purposes. For accounting purposes, the reverse recapitalization is the equivalent of SC Assets issuing stock for the net assets of TLGY, accompanied by a recapitalization. The net assets of TLGY are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the reverse recapitalization are those of SC Assets. Upon the consummation of the Merger, StablecoinX became the parent company of SC Assets as well as the reporting entity. SC Assets shareholders were issued 700,000 shares of Class A common stock and 700,000 shares of Class B common stock. Description of Business The Company’s operating model is designed to function as an integrated ecosystem in which each business line reinforces the others. The Company currently provides infrastructure services focused on supporting the Ethena ecosystem, including its digital dollar products, particularly USDe, and is developing its software infrastructure and distribution service offerings. The Company’s operations are organized across three complementary business lines: Infrastructure Services, Infrastructure Software, and Distribution Services. 5 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Infrastructure Services The Company currently operates the following two infrastructure services: Validator Services — The Company operates a full-stack Ethereum validator node utilizing staked ETH collateral, which supports blockchain transaction validation, block production, and network consensus functions. See Note 4 Decentralized Verifier Node (“DVN”) Services — On April 14, 2026, the Company entered in a DVN Services Agreement with Ethena OpCo Ltd. (“Ethena OpCo”), a subsidiary of the Ethena Foundation (“Ethena”), whereby the Company provides cross-chain verification services for Ethena ecosystem assets. Upon consummation of the Merger, Ethena and Ethena OpCo became related parties of the Company. See Notes 4 and 14. Infrastructure Software and Distribution Services Infrastructure Software – The Company continues to develop the StablecoinX Harness, a comprehensive middleware software platform designed to provide a unified API layer to enable businesses to integrate with Ethena’s USDe and related products. Phase 1 of the StablecoinX Harness launched in July 2026. This platform is expected to provide the tools and technology to allow corporate enterprises, payment providers, small business, and financial institutions to integrate an issuer’s stablecoin across various use cases, whether for treasury operations, payments, or foreign exchange transfers. Distribution Services – The Company’s Distribution Services business is intended to facilitate and capitalize on the broader adoption of Ethena’s digital dollar products, including USDe and USDtb (“Ethena Products”), by traditional financial institutions, asset managers, and investors. The Company has entered into a distribution partnership agreement with Ethena OpCo (the “Distribution Partnership Agreement”) pursuant to which it may act as a non-exclusive distribution partner for Ethena Products. The Company expects to earn fees based on the volume of Ethena Products acquired through distribution activities, subject to agreed pricing terms. Emerging Growth Company Status The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). The Company may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. 6 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Liquidity The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which assumes that it will be able to meet its obligations and continue its operations to support the ongoing business operations for the twelve months following the issuance of these condensed consolidated financial statements. The Company’s ability to continue to meet its obligations, to achieve its business objectives and continue as a going concern is dependent upon several factors, which include continued growth and adoption of the Ethena ecosystem, successful scaling of its infrastructure services and its deployment and scaling of its infrastructure software and distribution services, its ability to monetize unlocked ENA tokens to support ongoing operations, regulatory developments applicable to digital assets and stablecoins, and broader market conditions affecting blockchain infrastructure, digital asset liquidity, and institutional participation. On August 5, 2026, the Company entered into a non-binding term sheet with the sponsors to restructure the promissory notes, with the objective of supporting the Company’s liquidity position. The Company is working to execute a definitive agreement with the note holders. Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete condensed consolidated financial statements. The accompanying unaudited interim condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. The unaudited interim condensed consolidated financial statements should be read in conjunction with StableCoinX Inc’s and StableCoinX Assets, Inc. condensed consolidated financial statements and accompanying footnotes included in the Company’s Form 8-K/A filed with the U.S. Securities and Exchange Commission (“SEC”) which provides a more complete discussion of the Company’s accounting policies and certain other information. Use of Estimates The preparation of the condensed interim consolidated financial statements in accordance with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Such estimates and assumptions include, but are not limited to, those related to the useful lives of long-lived assets, the accounting for income taxes, the estimates used to evaluate the recoverability of long-lived assets, amortization method and periods for capitalized software, and valuation of stock-based compensation expense. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from these estimates. 7 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Cash and Concentration of Credit Risk The Company has cash deposits in a financial institution that, at times, may be in excess of Federal Deposit Insurance Corporation insurance limits. Any loss incurred or lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. As of June 30, 2026 the Company had cash balances in excess of domestic insurance limits of approximately $ 18.6 million. As of December 31, 2025, the Company had no cash balances which exceeded the insurance limits. Digital Assets Receivable- Related Party Outstanding receivables are denominated in ENA tokens earned from DVN services. See Notes 4 and 14. Digital Assets and Adoption of ASU 2023-08 The Company early adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which requires entities to measure certain crypto assets at fair value with changes recognized in the statement of operations for each reporting period and others that do not fall under the scope of ASU 2023-08 as intangible assets. The Company’s ETH Tokens, which have not been determined to be stablecoins or derivatives, are within the scope of ASU 2023-08 and recognized at fair value and determined using Level 1 inputs under the Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , hierarchy as these prices were based on observable quoted prices in the market for identical assets. Changes in the fair value of crypto assets under ASU 2023-08 are recognized in the condensed consolidated statements of operations for each reporting period. See Notes 5, 6 and 14. Realized gain (loss) on the disposition of all of the Company’s crypto assets is calculated on a first-in-first out (“FIFO”) basis. Gains or losses from the sale of digital assets are calculated as the difference between the disposal price and the cost basis and are recognized in other expenses (income). As of June 30, 2026, no gain (loss) on the disposition of crypto assets has been incurred. Digital Intangible Assets Digital assets that the Company holds which fall outside of the scope of ASC 350-60 will be recorded at cost, less impairment within digital intangible assets in the accompanying unaudited interim condensed consolidated balance sheets. The Company’s ENA tokens fall outside of the scope of ASC 350-60 since they were created by Ethena, a related party. The Company tests for impairment quarterly to identify whether event or changes in circumstances indicate that it is more likely than not that its digital intangible assets are impaired. If an impairment has occurred, the Company considers the lowest intra-day market price quoted on an active exchange since acquiring the respective digital asset as the fair value measure. If the then current carrying value of a digital intangible asset exceeds the fair value, an impairment loss has occurred with respect to those digital intangible assets in the amount equal to the difference between their carrying values and the fair value. When impaired, digital intangible assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains will not be recorded until realized upon sale. In determining the gain or loss to be recognized upon sale, the Company will calculate the difference between the sales price and the carrying value of the digital intangible assets sold immediately prior to sale. 8 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) The Company uses a first-in, first-out methodology to assign costs to digital intangible assets for purposes of evaluating impairment and determining realized gains and losses. For the three and six months ended June 30, 2026, the Company recognized an impairment expense of $ 36.2 million related to its digital intangible assets (see Note 7). Fair Value Measurements The Company determines fair value measurements used in its condensed consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). ASC 820, Fair Value Measurements, requires fair value measurements be classified and disclosed in one of the following pricing categories: Level 1: This level consists of unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2: This level consists of observable inputs other than the quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: This level consists of unobservable inputs for the asset or liability to the extent that observable inputs are not available, thereby allowing for situations in which there is little or no market data for the asset or liability at the measurement date. This requires the reporting entity to develop its own assumptions that market participants would use in pricing the asset or liability. The carrying amounts of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term maturities. 9 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Capitalized Software Costs Internal-use software is software developed or modified solely to meet the Company’s internal needs, with no substantive plan to sell, lease, or license the software to external parties. The Company capitalizes certain costs incurred in connection with developing internal-use software when management has committed to the software project and it is probable the software will be completed and perform its intended use in accordance with ASC 350-40. Capitalizable costs primarily include the cost of consultants that are directly involved in writing and testing code. Costs related to research and development activities prior to meeting capitalization criteria, costs related to training, maintenance, product management, and other non-development activities are expensed as incurred. As of June 30, 2026 and December 31, 2025, the Company has capitalized $ 200,000 and $ 50,000 , respectively, of software development costs, which are included in intangible assets, net, in the accompanying interim condensed consolidated balance sheets. No amortization expense was recognized during the three and six months ended June 30, 2026 related to the capitalized software as development is ongoing and has not yet reached its intended use. Intangible Assets, Net The Company’s finite-lived intangible asset, which is comprised of a perpetual royalty-free software license, was contributed to the Company during the period from inception through December 31, 2025, is carried at cost, and is amortized on a straight-line basis over the estimated economic life of five years . The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the intangible asset. The factors that are considered in determining the useful lives of identifiable intangible assets include the extent to which expected future cash flows would be affected by the Company’s intent and ability to retain use of any such assets. Impairment of Long-Lived Assets Whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the Company estimates the expected undiscounted future cash flows from the use of those assets and their eventual disposition (without any allocated debt financing charges). The Company conducts an intangible impairment analysis at least annually and more frequently if changes in facts and circumstances indicate that the fair value of the intangible asset may be less than their related carrying amount. If the sum of the expected undiscounted future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. For the three and six months ended June 30, 2026, the Company did not recognize any impairment expense related to its long-lived asset. 10 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Demand Notes The Company accounts for its related party demand notes denominated in ETH tokens at fair value at each period end pursuant to ASC 825, “ Financial Instruments” wherein changes in the fair value are recorded as unrealized change in fair value of demand notes in the condensed consolidated statements of operations. Demand notes denominated in USD are recognized at the value of the cash proceeds received. Convertible Demand Notes Payable – Former Sponsors The Company accounts for its convertible demand notes payable – former sponsors under ASC 470-20, “Debt—Debt with Conversion and other Options” (“ASC 470”). The notes are assessed under ASC 815 for any conversion features which may require bifurcation. Management has determined that these notes do not require bifurcation and are precluded from the fair value option and are presented at their original value on the condensed consolidated balance sheets. Warrant Liabilities The Company accounts for its public warrants in accordance with the guidance contained in ASC 815, “ Derivatives and Hedging ” whereby under that provision, the Public Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at fair value and adjusts the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Public Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s unaudited interim condensed consolidated statements of operations. The quoted market price is used as the fair value as of each relevant date for valuing the public warrants. Revenue The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , applying the five-step model: identify the contract, identify performance obligations, determine the transaction price, allocate the transaction price to performance obligations, and recognize revenue when or as performance obligations are satisfied. The Company applies the as-invoiced practical expedient when applicable. The Company evaluates whether it is a principal or agent and reports revenue net when acting as an agent. Validator Services: The Company operates a full-stack Ethereum validator node utilizing staked ETH collateral, which supports blockchain transaction validation, block production, and network consensus functions. The Company concluded that since it controls the validation infrastructure, it is a principal in the provision of staking services to the blockchain and will recognize revenue on a gross basis. Validation revenue is earned at a point in time when confirmation is received from the network indicating that the validation is complete and the Company obtains control of the awards. Cryptocurrency rewards are measured at fair value using market prices on the date they are received. 11 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) DVN Services: The Company provides cross-chain verification services for Ethena ecosystem assets using LayerZero messaging infrastructure under a DVN Services Agreement with Ethena OpCo, a related party. The Company is entitled to receive fees that are calculated as a fixed percentage of aggregate cross-chain transaction volume processed through its DVN infrastructure, measured in the U.S. Dollars value of the transactions. The fees are paid in ENA tokens with the number of tokens received based on the average price of ENA as reported by CoinGecko / CoinMarketCap over the final five (5) trading days of the applicable calendar month. The Company concluded that since it controls the validation infrastructure, it is a principal in the provision of validating services to the blockchain and will recognize revenue on a gross basis. The Company recognizes revenue over time 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. Cost of Revenue Costs of revenue represent costs directly related to the Company’s services and include costs associated with the Company’s infrastructure services. Cost of revenue excludes the amortization of intangibles associated with the perpetual royalty-free software license. Stock-Based Compensation The Company issues restricted stock units (“RSUs”) to employees and non-employee consultants, which vest upon the satisfaction of service and continued employment. The fair value of the RSUs is determined based on the Company’s fair value of common stock at the date of grant and recognized over the period of service. Forfeitures are recognized as they occur. Income Taxes The Company is subject to income taxes in the U.S. The Company uses the asset-and-liability method for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established on a jurisdiction-by-jurisdiction basis when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized. The effective tax rate for the three and six months ended June 30, 2026 and for the period from June 30, 2025 (Inception) through June 30, 2025 was 0.0 %. The Company’s effective tax rate differs from the U.S. federal statutory rate of 21.0 % as a result of the Company’s U.S losses for which no benefit will be realized. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to shares in undistributed earnings as if all income (loss) for the period had been distributed. 12 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) As of June 30, 2026, the Company has only Class A common stock outstanding that participates in earnings. Class B Common Stock shares are not included in the calculation of EPS as these shares represent voting rights only and are not entitled to participate in dividends or receipt of any of the Company’s assets in the event of any dissolution, liquidation or winding up. Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. As the Merger has been accounted for as a reverse recapitalization, net loss per share was also retroactively adjusted for the periods presented prior to the Merger. Segment Reporting The Company operates in one reporting segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s Chief Executive Officer is the CODM, who reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources and evaluating financial performance. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances the transparency and decision usefulness of income tax disclosures. This Company adopted this standard as of January 1, 2026. The Company adopted ASU 2023-08, as of its June 30, 2025 inception date. See Notes 5 and 6. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. The Company adopted this standard as of its June 30, 2025 inception date. Recently Issued Accounting Pronouncements Not Yet Adopted Expense Disaggregation Disclosure In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which enhances transparency by requiring public entities to disclose more detailed information about their income statement expenses. This includes disaggregating specific natural expense categories, like employee compensation and depreciation, within certain expense captions. ASU 2024-03 applies to public entities with annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and early adoption is permitted. We are evaluating the impact this amended guidance may have on the notes to our condensed consolidated financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. 13 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Note 3. Merger and Reverse Recapitalization As discussed above, the Merger was consummated on June 25, 2026, which, for accounting purposes, was treated as the equivalent of SC Assets issuing stock for the net assets of TLGY, accompanied by a recapitalization (see Note 1). Under this method of accounting, TLGY was treated as the acquired company for financial accounting and reporting purposes under U.S. GAAP. At Closing, each share of issued and outstanding StablecoinX, Inc. common stock was canceled and converted into one share of StablecoinX Class A common stock and one share of StablecoinX Class B common stock. Warrants Upon the consummation of the Merger, 11,500,000 of previously outstanding TLGY Public Warrants automatically became 11,500,000 StablecoinX Public Warrants, and all Private Placement Warrants became one (1) warrant to purchase StablecoinX Class A Common Stock. Immediately following the Merger, TLGY insiders exchanged an aggregate of (i) 5,449,700 TLGY Class Common shares and (ii) all of the 11,259,500 Private Placement Warrants for 644,590 shares of StablecoinX Class A Common Stock and 644,590 shares of StablecoinX Class B Common Stock. Ethena Contribution Upon the consummation of the Merger and pursuant to the Contribution Agreement entered into by TLGY, Ethena, SC Assets, and StablecoinX on July 21,2025, Ethena contributed 284,954,407.29 ENA Tokens with a value of $ 23,417,531.14 as of June 25, 2026 in exchange for 1,813,164 shares of StablecoinX Class A common stock and 1,813,164 shares of StablecoinX Class B common stock. The ENA tokens contributed by Ethena are locked as of June 30, 2026 and will be unlocked over a period of up to 48 months. Given the related party nature of Ethena for accounting purposes as of the closing of the Merger, ENA Tokens received upon the close of the Merger did not fall within the scope of ASU 2023-08 and will be accounted for under the intangible assets model (see Note 7). PIPE Shares Upon the consummation of the Merger and pursuant to the PIPE Subscription Agreements entered into by TLGY, certain investors (“Initial PIPE Investors”), SC Assets, and StablecoinX on July 21,2025, the Company received 1,405,754,435.84 ENA Tokens with a value of $ 115,524,790.73 as of June 25, 2026 and $ 1,734,252 in cash in exchange for 9,159,293 shares of StablecoinX Class A common stock. Additionally, upon the consummation of the Merger and pursuant to the PIPE Subscription Agreements entered into by TLGY, certain investors (“Additional PIPE Investors”), SC Assets, and StablecoinX on September 5, 2025, the Company received 1,340,695,577.81 ENA Tokens with a value of $ 110,178,258.81 as of June 25, 2026 and $ 16,000,000 in cash in exchange for 11,615,979 shares of StablecoinX Class A common stock. A portion of the ENA tokens received are locked as of June 30, 2026 and will be unlocked over a period of up to 48 months. 14 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) The following table reconciles the elements of the Merger to the condensed consolidated statements of cash flows and the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2026: Recapitalization Cash - TLGY trust and cash, net of redemptions $ 1,177,929 Cash - PIPE 17,734,252 Less: transaction and advisory costs paid by Stablecoin ( 59,885 ) Net cash proceeds from Merger 18,852,296 ENA contributed 249,120,581 Less: Stablecoin accrued transaction and advisory costs ( 3,481,156 ) Net liabilities assumed from TLGY ( 16,129,386 ) Total Merger and PIPE financing $ 248,362,335 The number of shares of common stock outstanding immediately following the consummation of the Merger: TLGY Class A common stock, outstanding prior to the Merger 5,834,587 Sponsor forfeiture ( 4,805,110 ) Redemption of TLGY Class A common stock ( 393,538 ) Class A common stock of TLGY 635,939 PIPE shares 20,775,272 Ethena contribution shares 1,813,164 TLGY Class B common stock, outstanding prior to the Merger 105,000 Merger and PIPE financing shares 23,329,375 Legacy Stablecoin X Assets Shares 700,000 Issuance of common stock to advisors - Class A Common Stock immediately after the Merger 24,029,375 TLGY was not an operating business and did not have any revenue before or after the Closing. Therefore, there are no combined effects on revenue and earnings on the consolidated financial statements. Note 4. Revenue Collaboration Agreement The Company, SC Assets, Ethena and Ethena OpCo entered into a collaboration agreement (the “Collaboration Agreement”), pursuant to which Ethena agreed to provide the Company a right to participate in certain future offerings of Ethena’s native protocol governance token, ENA Token, on terms no less favorable than other investors and to collaborate with the Company on an ongoing basis to support the operation of the Company’s infrastructure, staking and treasury activities of ENA Token and the Company’s public advocacy for the blockchain-based protocol and off-chain architecture and related systems for ENA Token (the “Ethena Protocol”) within the traditional finance ecosystem. Pursuant to the Collaboration Agreement, the Company agreed that its business would be to provide infrastructure, staking and other products and services to the Ethena Protocol and that it would not change such business, acquire digital assets other than ENA Token, USDe and sUSDe or any other Ethena-related digital assets, or enter into a merger, acquisition, disposition or similar transaction that would have the effect of changing such business without the prior approval of the Investment Committee and a majority of the holders to the Company’s Class B Common Stock. 15 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) In November 2025 the Company began serving as a cross-chain verifier for the Ethena ecosystem across multiple chains. On April 14, 2026, the Company entered in a DVN Services Agreement with Ethena OpCo. The services provided thereunder include, without limitation: (a) the continuous operation of DVN infrastructure on all Supported Networks (defined as blockchain networks on which the StablecoinX DVN is deployed and operational, initially comprising Arbitrum and Optimism); (b) the cryptographic verification of the authenticity and finality of cross-chain messages transmitted through the LayerZero Protocol; (c) the monitoring of DVN performance and security in accordance with the Service Level Requirements; and (d) such additional verification and infrastructure services as the Parties may agree to in writing from time to time. During its term, the Agreement shall represent the sole and exclusive agreement under which Ethena compensates or otherwise incentivizes a third-party DVN operator to process cross-chain transactions within the Ethena Ecosystem through the LayerZero Protocol. During the agreement term and once enabled by Ethena to do so, the Company will, at all times, maintain a minimum staked balance of ENA tokens (“Minimum Staking Requirement”) as security for the faithful performance of its DVN obligations. Under the terms of the agreement, the Company receives a service fee equal to one (1) basis point ( 0.01 %) of all processed volume, as defined, each month which his paid in ENA Tokens. The number of ENA Tokens received is calculated using the time-weighted average price of ENA as reporting by CoinGecko/CoinMarketCap over the final five (5) trading days of the applicable calendar month. The Company recognizes DVN revenue based on the number of ENA tokens received at the fair value as of the invoice date. Upon receipt of the ENA tokens, differences between the recorded balance and fair value at the date of receipt will be recognized as a change in fair value of the digital intangible asset. On May 22, 2026, the Company entered into an agreement with Ethena Opco wherein the Company was appointed as a non-exclusive distribution partner to facilitate broader adoption of Ethena Products by institutional investors. Under this agreement, Ethena OpCo is required to pay the Company a monthly fee initially equal to five basis points ( 0.05 %) of the gross dollar equivalent of Ethena Products acquired through the Company’s distribution activities during the applicable calendar month. The fee rate may be adjusted by mutual written agreement of the parties to any rate within a range of one to ten basis points. During the three and six-month periods ended June 30, 2026, respectively, no related distribution services were performed. In October 2025, the Company received a loan of thirty-three (33) Ethereum – ETH Tokens (“ETH Tokens”), a decentralized digital currency operating on the Ethereum blockchain protocol. To begin operational activity, the Company staked the ETH Tokens on its validator platform. See Notes 5, 6 and 14. Disaggregation of Revenue The following table presents a disaggregation of the Company’s revenue: Three months ended Six months ended For the period June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Validator services $ 904 $ 1,570 $ - DVN services 61,468 61,468 - Total revenue $ 62,372 $ 63,038 $ - 16 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Three months ended Six months ended For the period June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Revenue recognized at a point in time $ 904 $ 1,570 $ - Revenue recognized over time 61,468 61,468 - $ 62,372 $ 63,038 $ - Note 5. Digital Assets Digital assets consisted of the following: As of June 30, 2026 Quantity Cost basis Fair value Ethereum - ETH Tokens 33.91 149,156 $ 53,366 Total digital assets - restricted 33.91 $ 149,156 $ 53,366 As of December 31, 2025 Quantity Cost basis Fair value Ethereum - ETH Tokens 33.00 $ 146,596 $ 97,912 Total digital assets - restricted 33.00 $ 146,596 $ 97,912 17 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) The following table presents a roll-forward of total digital assets for the three and six months ended June 30, 2026: Balance at March 31, 2026 $ 70,121 Digital assets earned in the period 904 Unrealized loss on digital assets ( 17,659 ) Balance at June 30, 2026 $ 53,366 Balance at December 31, 2025 $ 97,912 Digital assets earned in the period 1,570 Unrealized loss on digital assets ( 46,116 ) Balance at June 30, 2026 $ 53,366 For the three and six months ended June 30, 2026, respectively, the unrealized loss on the ETH Tokens was offset by the change in the fair value of the demand notes requiring repayment of the donated tokens. See Note 14. The ETH Tokens are held with restriction but can be released within three days of notice of repayment by either the Company or the related parties. Note 6. Fair Value Measurements The table below presents the Company’s financial assets and liabilities measured at fair value on a recurring basis aggregated by the level in the fair hierarchy : As of June 30, 2026 Level 1 Level 2 Level 3 Total Assets: Digital assets - restricted $ 53,366 $ - $ - $ 53,366 Total assets, measured at fair value $ 53,366 $ - $ - $ 53,366 Liabilities: Demand notes - related party $ 51,796 $ - $ - $ 51,796 Warrant liability 4,715,000 4,715,000 Total liabilities, measured at fair value $ 4,766,796 $ - $ - $ 4,766,796 As of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Digital assets - restricted $ 97,912 $ - $ - $ 97,912 Total assets, measured at fair value $ 97,912 $ - $ - $ 97,912 Liabilities: Demand notes - related party $ 97,912 $ - $ - $ 97,912 Total liabilities, measured at fair value $ 97,912 $ - $ - $ 97,912 Level 1 instruments consisted of digital assets, related party demand notes and public warrants which are valued using quoted priced in active markets for the underlying tokens and warrants at the reporting date, with the changes recognized in the condensed consolidated statements of operations. See Notes 5, 9 and 14. 18 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Demand notes denominated in cash are excluded from the fair value table. The change in the fair value of the Company’s assets and liabilities measured at fair value during the three and six months ended June 30, 2026 were as follows: Digital assets Demand notes - related party Warrant liability Balance at March 31, 2026 $ 70,121 $ 69,455 $ - Digital assets earned in the period 904 - - Warrant liability assumed in merger - - 6,900,000 Change in estimated fair value ( 17,659 ) ( 17,659 ) ( 2,185,000 ) Balance at June 30, 2026 $ 53,366 $ 51,796 $ 4,715,000 Balance at December 31, 2025 $ 97,912 $ 97,912 $ - Digital assets earned in the period 1,570 - - Warrant liability assumed in merger - - 6,900,000 Change in estimated fair value ( 46,116 ) ( 46,116 ) ( 2,185,000 ) Balance at June 30, 2026 $ 53,366 $ 51,796 $ 4,715,000 Note. 7 Digital Intangible Assets The table below presents the Company’s digital intangible assets, at carrying value, with the respective gross and net carrying amounts as of June 30. 2026: Gross carrying amount Accumulated impairments Net carrying amount ENA tokens $ 249,120,581 $ ( 36,201,740 ) $ 212,918,841 Total ENA tokens, at carrying value $ 249,120,581 $ ( 36,201,740 ) $ 212,918,841 The ENA tokens purchased by the Company as part of the PIPE transactions are subject to the transfer restrictions and unlock schedules set forth in the applicable Token Purchase Agreement entered into on July 21, 2025 and September 5, 2025, which are filed as exhibits 10.15 and 10.16 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2026. The Company did not hold any digital intangible assets as of December 31, 2025. Under the terms of the Company’s Collaboration Agreement with the Ethena (see Note 4), the Company must maintain the ENA tokens as a permanent, unencumbered treasury asset. Further, the Company is not able to sell ENA tokens held in treasury without obtaining approval from the Ethena Foundation Additionally, without prior approval from the Company’s investment committee and the holders of a majority of the Class B voting shares, of which Ethena and related affiliates hold a controlling interest, the Company may not use the ENA tokens to engage in any business outside of the operating business, acquire digital assets other than ENA tokens, USDe and sUSDe, or any other Ethena-related digital assets, or enter into any merger, acquisition, disposition of similar transaction that would change the nature of the Company’s on-going operations. 19 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Note 8. Intangible Assets, Net Intangible assets, net, consisted of the following: As of June 30, 2026 Gross carrying amount Accumulated amortization Net book value Weighted average remaining useful life (in years) Software license $ 502,500 $ ( 100,500 ) $ 402,000 4.0 Capitalized software 200,000 - 200,000 Total intangible assets $ 702,500 $ ( 100,500 ) $ 602,000 As of December 31, 2025 Gross carrying amount Accumulated amortization Net book value Weighted average remaining useful life (in years) Software license $ 502,500 $ ( 50,250 ) $ 452,250 4.5 Capitalized software - - - Total intangible assets $ 502,500 $ ( 50,250 ) $ 452,250 During the three and six months ended June 30, 2026, the Company recorded $ 25,125 and $ 50,250 , respectively, of amortization expense related to the intangible asset. Note 9. Warrants In connection with the Merger (see Note 3), the Company assumed a warrant liability associated with the former TLGY public warrants. The public warrants may only be exercised for a whole number of shares and became exercisable on the later of (a) 30 days after the completion of the Merger (or July 25, 2026) and (b) 12 months from the closing of TLGY’s initial public offering date of December 3, 2021. The public warrants expire five years after the completion of the Merger, June 25, 2031, or earlier upon redemption or liquidation. 20 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Redemption of Warrants When the Price per Share of Class A Ordinary Share Equals or Exceeds $ 18.00 —the Company may redeem the outstanding public warrants: ● in whole and not in part; ● at a price of $ 0.01 per warrant ● upon a minimum of 30 days’ prior written notice of redemption; and ● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 10 trading days within a 20 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. Redemption of Warrants When the Price per Share of Class A Ordinary Share Equals or Exceeds $ 10.00 —the Company may redeem the outstanding public warrants: ● in whole and not in part; ● at a price of $ 0.10 per warrant provided that the holder will be able to exercise their warrants on cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary shares; ● upon a minimum of 30 days’ prior written notice of redemption; and ● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $ 10.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 10 trading days within a 20 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. The warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities in the accompanying interim unaudited condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the accompanying interim unaudited condensed consolidated statements of operations. During the three and six-month period ended June 30, 2026, the Company recognized $ 2.2 million gain on change in fair value. (See Note 6). Note 10. Debt Convertible Demand Notes Payable -former sponsors In order to finance transaction costs in connection with the Merger (see Note 3), the former TLGY sponsors or an affiliate of the former sponsor or certain of its officers and directors loaned TLGY funds for operational use. The loans were categorized into two groups (1) working capital loans and (2) time extension funding loans. The convertible promissory notes were eligible for repayment at the closing of the Merger, without interest, or, at the lender’s discretion, up to $ 1,500,000 and $ 3,000,000 of the notes for the working capital loans and extension funding loan, respectively, were eligible for conversion at closing of the Merger into warrants at a price of $ 1.00 per warrant. Upon consummation of the Merger, these convertible demand notes payable were neither repaid nor converted, resulting in a default with the terms of repayment and the Company’s assumption of the liability approximating $ 6.9 million. On August 5, 2026, the Company executed a Promissory Note Restructuring Term Sheet which waived the Company’s default of payment of the outstanding obligations and restructured the repayment terms (See Notes 1 and 17). 21 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) As of June 30, 2026, the outstanding balance for working capital loans and time extension funding loans approximated $ 4.2 million and $ 2.7 million, respectively. Demand Notes – Related Party In October 2025, the Company received a loan of thirty-three (33) Ethereum – ETH Tokens (“ETH Tokens”), a decentralized digital currency operating on the Ethereum blockchain protocol. To begin operational activity, the Company staked the ETH Tokens on its validator platform. See Note 5. The Company issued short-term demand promissory notes (the “2025 Demand Notes”) to one of the Founders and an original investor in conjunction with the loan of 33 ETH Tokens to the Company. See Notes 5 and 6. The cost basis of the 2025 Demand Notes as of the date the ETH Tokens were loaned was $ 146,596 . The outstanding 2025 Demand Notes are denominated in ETH Tokens are non-noninterest bearing and payable on demand by the return of the ETH Tokens within three days of notice of repayment by either the Company or the related parties. The Promissory Notes can be repaid at any time. Repayment shall be made by on-chain transfer to a public ETH wallet address designated in writing by the related parties. All repayments shall be applied first to payment in full of any costs incurred in the collection of any sum due under the Promissory Notes, including reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance. The 2025 Demand Notes were adjusted to their fair value during the three and six months ended June 30, 2026 with the change of $ 17,659 and $ 46,116 , respectively recognized in the condensed consolidated statements of operations. On May 18, 2026, the Company issued short-term demand promissory notes aggregating $ 15,000 to the three stockholders in exchange for a cash infusion. On May 19, 2026, the Company issued two additional short-term demand promissory notes aggregating $ 24,000 to two of the three stockholders in exchange for additional funding. On June 10, 2026, two additional notes were issued totaling $ 28,000 . As of June 30, 2026, the total outstanding demand promissory notes issued in 2026 and denominated in cash totaled $ 65,875 . Excluding the promissory note for $ 1,125 , these non-interest bearing notes were paid in full on July 2, 2026. Note 11. Preferred Stock Under terms of the June 26, 2026 Amended and Restated Articles of Incorporation, the Company is authorized to issue 1,000,000 shares of $ 0.0001 par value preferred stock. There were no shares of preferred stock issued or outstanding as of June 30, 2026 and December 31, 2025. Note 12. Common Stock At June 30, 2026 and December 31, 2025, there were 550,000,000 and 60,000,000 shares of common stock authorized, respectively, of which 500,000,000 and 50,000,000 were Class A common stock, respectively, and 50,000,000 and 10,000,000 were Class B common stock, respectively. As of June 30, 2026 and December 31, 2025, there were 24,029,375 and zero shares of Class A common stock issued and outstanding, respectively. As of June 30, 2026 and December 31, 2025, there were 3,157,754 and 700,000 shares of Class B common stock issued and outstanding, respectively. Holders of Class A common stock are not entitled to vote. Holders of Class B common stock are entitled to one vote per share held and are not entitled to participate in dividends or receipt of any of the Company’s assets in the event of any dissolution, liquidation or winding up. 22 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) 2026 Stock Incentive Plan On March 17, 2026, The Company’s Board of Directors approved the Company’s 2026 Stock Incentive Plan (“Incentive Plan”) that took effect upon the closing of the Merger. The Incentive Plan provides the Company the option of providing equity and other incentive-based compensation opportunities to selected officers, employees, non-employee directors, and consultants of the Company and its subsidiaries. The Incentive Plan provides the Company the right to issue options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, other stock based awards, cash awards or any combination of the foregoing. Instruments issued under the plan are exercisable into Class A common stock. Upon consummation of the Merger, the Company reserved seven and one-half percent ( 7.5 %), as the total number of Company’s Class A Common shares, on a fully diluted basis, as available for awards under the Plan. Additionally, under the Incentive Plan, the maximum number of shares subject to awards during any fiscal year to any non-employee director, when taken together with any cash fees paid to the respective non-employee director during the fiscal year in respect to service provide, shall not exceed $ 500,000 in value. Restricted Stock Units Outside of the Incentive Plan Subsequent to the Merger, the Company issued restricted stock units (“RSUs”) outside of its Incentive Plan which vest upon the satisfaction of both a service-based condition and continued employment through December 25, 2026. Upon settlement of the RSUs, the Company will issue one share of Class A common stock, along with one share of Class B common stock. The grant date fair value of the issued RSUs, recognized over the services period, is based on the fair value of the Company’s publicly-traded Class A common stock on the date of grant. The Company recognizes forfeitures as they occur. For the three and six-month periods ended June 30, 2026, stock-based compensation expense approximating $ 8,100 has been included in selling, general and administrative expenses within the accompanying unaudited interim consolidated condensed statement of operations. A summary of the Company’s RSU activity is as follows: Number of RSUs Weighted average grant date fair value Balance as of December 31, 2025 - $ - Granted 78,635 $ 3.70 Forfeited - $ - Balance as of June 30, 2026 78,635 $ 3.70 As of June 30, 2026, the unrecognized stock-based compensation related to the outstanding RSU awards approximates $ 0.3 million and there are 2,184 vested awards. 23 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Note 13. Commitments and Contingencies Registration Rights: The holders of the public warrants that may be issued upon conversion of working capital loans or time extension funding loans are entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to completion of the Merger and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Legal Fees The Company had a legal arrangement requiring a $ 25,000 retainer fee (see Note 14) and additional legal fees of $ 75,000 and the issuance of 2,500 shares of the Company’s Class B common stock contingent upon the successful consummation of the Merger (see Note 1). During the period ended June 30, 2026, the agreement was amended to replace the issuance of the 2,500 shares of the Company’s Class B common stock upon the Merger with a required one time payment of $ 80,000 . The amount has been recognized as an accrual as of June 30, 2026. Legal Proceedings From time to time, the Company may become involved in claims or other legal matters arising in the ordinary course of business. The Company records accruals for outstanding legal proceedings when it is probable a liability will be incurred, and the amount of loss can be reasonably estimated. The Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse effect on the Company’s condensed consolidated financial statements. IT Service Contract In August 2025, the Company executed a contract with a related party for outsourced information technology management, support and development services. The contract term is the earlier of the (i) termination of the Business Combination Agreement or (ii) three ( 3 ) years from the Closing of the Merger. Upon expiration, the agreement shall automatically renew for successive one ( 1 ) year periods unless cancelled by either party. The contract included a provision for free services until the consummation of the Merger. Thereafter fees for services performed were fifteen (15) thousand per month and adjusted to five (5) thousand per month with the execution of additional service contracts for additional development activity. Under the 2026 agreements, the Company is committed to a monthly payment totaling sixty (60) thousand, some of which has been capitalized as software costs. See Notes 3, 8 and 14. 24 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) Note 14. Related Party Transactions and Balances A summary of the Company’s related party balances are as follows: June 30, December 31, 2026 2025 Digital assets $ 53,366 $ 97,912 Demand notes - cash based $ 67,000 $ - Digital assets receivable - due from Ethena $ 61,468 $ - Accounts payable – related party $ 340,000 $ 20,800 Demand notes payable $ 51,796 $ 97,912 Convertible sponsor notes $ 3,967,325 $ - The following table presents the Company’s related party expenses: Three months ended Six months ended For the period June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Technology expenses $ 20,000 $ 130,000 $ - Capitalized software technology costs $ 150,000 $ 200,000 $ - On June 30, 2025, the Company received $ 300,000 from the Company Founders as payment for the shares of Class B common stock receivable upon formation of the Company, as well as a contribution of a perpetual software license from Schulz von Jacob Ltd., a company owned by the Company’s Chief Technology Officer, Ahmed J. Aly, which represents the definite lived intangible asset of the Company. The fair value of the perpetual software license is based on the value derived from the arm’s-length transaction between the Company and the contributing investor. During the period from June 30, 2025 (inception) to December 31, 2025 and from January 1, 2026 to February 28, 2026 the Company’s received free outsourced information technology management, support and development services related to the perpetual software license from a related party in accordance with the contract which included a provision for free services until the consummation of the Merger (see Note 3). Effective January 2026, the Company and the related party executed a work order under the guidelines of the original August 2025 management services agreement for expanded technology development services, as defined, for a fee of $ 50,000 per month. As of June 30, 2026, the Company had $ 0.2 million in capitalized software costs associated with the development of new technology not yet in service. In February 2026, the Company and the related party executed a second work order replacing the condition of free on-going maintenance related technology services up until the closing date of the Merger to a fee of $ 10,000 per month for March and April 2026 and $ 5,000 month thereafter. On June 30, 2025, the Company’s Founders paid, on behalf of the Company, its legal retainer fee of $ 25,000 . In August 2025 the Company paid the full $ 25,000 fee to the legal firm and the Founders were reimbursed in full. In October 2025, the Company received a loan of thirty-three (33) Ethereum – ETH Tokens (“ETH Tokens”), a decentralized digital currency operating on the Ethereum blockchain protocol. To begin operational activity, the Company staked the ETH Tokens on its validator platform. See Note 5. The Company issued short-term demand promissory notes (the “2025 Demand Notes”) to one of the Founders and an original investor in conjunction with the loan of 33 ETH Tokens to the Company. See Notes 5, 6 and 10. 25 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) From May 18, 2026 through June 10, 2026, the Company issued various individual short-term demand promissory notes aggregating $ 67,000 to three stockholders in exchange for a cash infusion. These notes were paid in full on July 2, 2026 (see Notes 10 and 17). The Company’s digital assets receivable – related party is due from Ethena earned under the Company’s Collaboration Agreement. Ethena holds the majority of the voting rights of the Company outstanding stock. See Notes 4 and 7. The Company has approximately $ 4.0 million in outstanding convertible demand notes payable due to two legal entities which has an affiliation with the Company’s interim CEO and Chairman of the Board. Note 15. Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and dilutive net loss per share attributable to common stockholders: Three months ended Six months ended For the period from June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Numerator: Net loss $ ( 34,180,809 ) $ ( 34,624,180 ) $ ( 26,071 ) Denominator: Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 2,238,201 1,473,349 700,000 Net loss per share attributable to common stockholders, basic and diluted $ ( 15.27 ) $ ( 23.50 ) $ ( 0.04 ) During the three and six months ended June 30, 2026 and 2025 and for the period from June 30, 2025 (Inception) through June 30, 2025, there were 78,635 RSUs excluded from the calculation of diluted net loss per share attributable to common stockholders because of the anti-dilutive impact to the calculation. Note 16. Segment Information ASC Topic 280, Segment Reporting , establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the CODM, or group, in deciding how to allocate resources and assess performance. The CODM has been identified as the Chief Executive Officer , who regularly reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment. 26 StablecoinX Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 (Unaudited) The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the condensed consolidated statements of operations as net income or loss. The accounting policies associated with the operating segments are the same as those described in Note 2. The measure of segment assets is reported on the balance sheet as total assets . When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews the below key metric included in net income or loss for the three and six months ended June 30, 2026 and for the period from June 30, 2025 (Inception) through June 30, 2025. Three months ended Six months ended For the period June 30, 2025 (Inception) through June 30, June 30, June 30, 2026 2026 2025 Operating expenses $ 36,428,181 $ 36,872,218 $ 26,071 Operating expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction within the business combination period. The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Operating expenses, as reported on the condensed consolidated statements of operations, are the significant segment expenses provided to the CODM on a regular basis. Note 17. Subsequent Events The Company has evaluated subsequent events through August 14, 2026, the date on which these condensed consolidated financial statements were available to be issued and has determined that there are no subsequent events are reportable in the condensed consolidated financial statements. On July 2, 2026, the Company repaid the related party short-term demand promissory notes denominated in cash (see Note 12) aggregating $ 65,875 . 27