FORUM MARKETS Inc 10-Q for FY2026 Q2
FORUM MARKETS Inc (FRMM)
About this 10-Q
FORUM MARKETS Inc filed this 10-Q on August 14, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.37M
- Net loss
- $12.82M
- compared with a net loss of $1.73M a year earlier
- Diluted EPS
- -$0.73
- compared with -$2.36 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
(The Nasdaq Capital Market) |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2026,
FORUM MARKETS, INCORPORATED,
FORMERLY ETHZILLA CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 30, 2026
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Report”), contains forward-looking statements under federal securities laws, including within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “targets,” “scheduled,” “anticipates,” “soon,” “goal,” “intends,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report, including those factors described under the heading “Risk Factors” contained in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2026 (the “Annual Report”) and under “Part II—Item 1A. Risk Factors”, below, and our other filings with the SEC.
In particular, forward-looking statements include, but are not limited to, statements that are not statements of current or historical facts, such as statements relating to the Company’s consideration of strategic alternatives and the Company’s ability to execute its plans, undertake tokenization activities and achieve future performance.
Factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, among others:
| ● | failure to realize the anticipated benefits of the tokenization of real-world assets (“RWAs”); | |
| ● | the Company’s ability to expand into new markets, including the tokenization of RWAs, the timing and costs associated therewith, and regulatory compliance costs, compliance and issues related thereto; | |
| ● | the concentration of digital assets with custodians and service providers, including insolvency, non-performance, and limits on insurance coverage; | |
| ● | risks relating to the Company’s acquisitions and strategic investments; | |
| ● | our ability to identify, evaluate, and consummate strategic alternatives, including acquisitions, mergers, sales of the Company or material assets of the Company, strategic partnerships, capital raises and distributions of the Company’s capital and assets; | |
| ● | the performance of the Eurus Aero Token I (the “Aero Token”) or future tokens that we develop, including anticipated yields thereof; | |
| ● | digital asset market and network dynamics risks, including the slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have an adverse material effect on the successful development and adoption of the Company’s tokens; |
| ● | failure to realize the anticipated benefits of the Company’s digital asset holdings and tokenization strategies; | |
| ● | our ability to raise sufficient capital to support our operations, fund growth initiatives and repay outstanding indebtedness; |
ii
| ● | the Company’s ability to achieve profitable operations; | |
| ● | the potential need for changes in our long-term strategy in response to future developments; | |
| ● | the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; | |
| ● | expectations regarding the capitalization, resources and ownership structure of the Company; | |
| ● | the Company’s ownership of digital assets, the Company’s current and anticipated yield strategies, including its participation in decentralized finance industry (“DeFi”) protocols and tokenization of RWAs; | |
| ● | fluctuations in the market price of Ether (“ETH”), the native cryptocurrency of the Ethereum blockchain, that will impact the Company’s accounting and financial reporting; | |
| ● | government regulation of cryptocurrencies, digital assets, and tokenized securities, including evolving SEC interpretations thereof; | |
| ● | constrained access to banking or capital markets for digital asset-related companies; | |
| ● | the Company’s ability to repurchase shares of common stock, the timing thereof, purchase price thereof, and the fact that repurchases may not be undertaken under the stock repurchase program; | |
| ● | risks associated with the Company’s debt, liens, secured obligations and collateral provided in connection therewith; | |
| ● | exchange listing requirements and compliance; | |
| ● | changes in business, market, financial, political and regulatory conditions; | |
| ● | risks relating to the Company’s over-the-counter transactions, including the Company’s ability to repay such facilities, covenants associated therewith and security interests associated therewith, including security interests over certain of our cash and ETH; | |
| ● | risks relating to the Company’s at-the-market equity offering (the “ATM Program”), including potential downward pressure on the Company’s stock price associated therewith; | |
| ● | dilution associated with equity offerings and convertible instruments; | |
| ● | risks relating to the Company’s operations and business, including the highly volatile nature of the price of ETH and other cryptocurrencies; | |
| ● | the risk that the Company’s stock price may be highly correlated to the price of the digital assets that it holds; | |
| ● | risks related to increased competition in the industries in which the Company does and will operate; |
iii
| ● | risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally; | |
| ● | dependence on access to reliable, low-cost electricity and hosting, uninterrupted internet activity, and the integrity and availability of the Ethereum network; | |
| ● | utility rate structures, curtailments, grid constraints and weather events; | |
| ● | evolving U.S. and foreign laws and policies applicable to digital assets, custody, staking, market structure, sanctions/anti-money laundering (“AML”), securities and commodities regulation, and tax treatment, and possible conflicting or extraterritorial regulations, potential investigations and litigation; | |
| ● | changes in the accounting treatment and taxation of the Company’s ETH and other digital asset holdings; | |
| ● | accounting risks associated with fair value measurements and potential impairment charges; | |
| ● | our ability to remediate a material weakness in our internal control over financial reporting and maintain an effective system of internal control over financial reporting; | |
| ● | cybersecurity incidents or technological difficulties which may compromise systems and secondary market platforms, digital wallets, custodial accounts, or third-party service providers; | |
| ● | token transactions may be irreversible and losses due to fraudulent or accidental transactions may not be recoverable; | |
| ● | potential litigation involving the Company; | |
| ● | global economic conditions; | |
| ● | geopolitical events and regulatory changes; | |
| ● | the concentration of digital assets with custodians and service providers, including insolvency, non-performance, and staking-related penalties and liquidity constraints; | |
| ● | the possibility that the Company could be classified as an investment company or again be deemed a shell company; | |
| ● | vulnerabilities in smart contracts, blockchain protocol changes or forks, and the limited operating history of the Company’s tokenization activities; | |
| ● | the Company’s stock trading at a premium or discount to the value of its digital asset holdings, and competition from spot ETH exchange-traded products; | |
| ● | access to additional financing, and the potential lack of such financing; and | |
| ● | the Company’s ability to raise funding in the future and the terms of such funding, including dilution caused thereby. |
iv
Any forward-looking statement in this Report reflects our current views with respect to future events or to our future financial performance and involves known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements included herein speak only as of the date of the filing of this Report. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
General Information
The following discussion is based upon our unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) included elsewhere in this Report, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC, and in our most recent Annual Report.
This information should be read in conjunction with the interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Report, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report.
Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited Condensed Consolidated Financial Statements included under “Part I – Financial Information” – “Item 1. Financial Statements”.
Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information and have not commissioned any such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under, and incorporated by reference in, the section entitled “Item 1A. Risk Factors” of this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to the Company, are also based on our good faith estimates.
v
See also “Cautionary Statement Regarding Forward-Looking Statements”, above, which includes information on forward-looking statements used herein and other matters which are applicable to this Report, including, but not limited to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “Forum Markets”, and “Forum Markets, Incorporated” refer specifically to Forum Markets, Incorporated, formerly ETHZilla Corporation and its consolidated subsidiaries.
In addition, unless the context otherwise requires and for the purposes of this Report only:
“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
“SEC” refers to the United States Securities and Exchange Commission; and
“Securities Act” refers to the Securities Act of 1933, as amended.
Additional Information
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and are available for download, free of charge, when such reports are filed with or furnished to the SEC, on the “Investors”– “Financials”– “SEC Filings” page of our website at https://forum-markets.com. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our General Counsel, who can be contacted at the address and telephone number set forth on the cover page of this Report. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.
We use, and will continue to use, our website (https://forum-markets.com), press releases and various social media channels, including our X account (x.com/forum markets) and our LinkedIn account (https://www.linkedin.com/company/forummarkets/), as additional means of disclosing public information to investors, the media and others interested in the Company. It is possible that certain information that we post on our website, disseminated in press releases and on social media could be deemed to be material information, and we encourage investors, the media and others interested in the Company to review the business and financial information that we post on our website and disseminate in press releases and on the social media channels identified above, as such information could be deemed to be material information. The contents on our website and our social media channels are not incorporated by reference into this Report and should not be considered a part of this Report.
vi
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
FORUM MARKETS INC., FORMERLY ETHZILLA CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash equivalents | ||||||||
| Accounts receivable | ||||||||
| Loans receivable, current | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operations | ||||||||
| Total Current Assets | ||||||||
| Marketable securities | ||||||||
| Non-marketable securities | ||||||||
| Digital assets | ||||||||
| Loans receivable, net of current portion | - | |||||||
| Staking receivables | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets - operating | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related parties | - | |||||||
| Accrued expenses | ||||||||
| Right of use liabilities - operating | - | |||||||
| Loans payable - current portion | - | |||||||
| Collateralized loan - current portion | ||||||||
| Current liabilities of discontinued operations | ||||||||
| Total Current Liabilities | ||||||||
| Collateralized loan - non current | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $ | ||||||||
| Class B Convertible Preferred stock liability, $ | ||||||||
| Class C Preferred Stock; | ||||||||
| Class K Preferred Stock; | ||||||||
| Common stock, $ | ||||||||
| Treasury stock | ( | ) | - | |||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
1
FORUM MARKETS INC., FORMERLY ETHZILLA CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share data)
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| Aircraft engine rental revenue | $ | $ | $ | $ | ||||||||||||
| Staking revenue | ||||||||||||||||
| Total Revenue | ||||||||||||||||
| Cost of Revenue: | ||||||||||||||||
| Aircraft engine rental | ||||||||||||||||
| Total Cost of Revenue | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Dividend income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Other expense | ( | ) | ||||||||||||||
| Change in fair value of derivative instruments | ( | ) | ||||||||||||||
| Change in fair value of available for sale securities | ||||||||||||||||
| Digital asset gains and losses | ( | ) | ( | ) | ||||||||||||
| Change in fair value of long-term receivable derivative | ( | ) | ||||||||||||||
| Gain (loss) on make whole provision | ( | ) | ||||||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ||||||||||||
| Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit | ||||||||||||||||
| Net Loss From Continuing Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) From Discontinued Operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Comprehensive Loss: | ||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and Diluted Net Income (Loss) per Common Share | ||||||||||||||||
| Continuing operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Discontinued operation | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
2
FORUM MARKETS INC., FORMERLY ETHZILLA CORPORATION
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three and Six Months Ended June 30, 2026 and 2025
(In thousands)
(Unaudited)
| For the Three and Six Months Ended June 30, 2026 and 2025 | ||||||||||||||||||||||||||||||||||||
| Series B Preferred | Common Stock | Treasury | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Stock | Capital | Income | Deficit | (Deficit) | ||||||||||||||||||||||||||||
| Balance - January 1, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Shares issued for cash, net | ||||||||||||||||||||||||||||||||||||
| Common stock cancelled for withholding taxes | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Comprehensive loss: | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance - March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Common stock cancelled for withholding taxes | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Comprehensive loss: | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive income | - | - | ||||||||||||||||||||||||||||||||||
| Balance - June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Balance - January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||
| Cancelled shares | - | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for settlement of liabilities | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||||||
| Conversion of Series B Convertible Preferred Stock | ( | ) | ||||||||||||||||||||||||||||||||||
| Comprehensive loss: | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Shares issued for settlement of liabilities | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||||||
| Commitment to repurchase common stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Comprehensive loss: | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
3
FORUM MARKETS INC., FORMERLY ETHZILLA CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of loan premiums | ||||||||
| Change in fair value of long term receivable derivative | ||||||||
| Digital asset gains and losses | ||||||||
| Change in fair value of available for sale securities | ( | ) | ||||||
| Change in fair value of derivative instruments | ||||||||
| Non-cash staking and incentive revenue | ||||||||
| Loss on make whole provision | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Right of use asset – operating lease | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accounts payable - related parties | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Right of use lease liabilities | ( | ) | - | |||||
| Total adjustments | ||||||||
| Net cash used in operating activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities from discontinued operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchases of marketable securities | ( | ) | ||||||
| Purchases of digital assets | ( | ) | ||||||
| Sale of cryptocurrency | ||||||||
| Purchase of loans receivable | ( | ) | ||||||
| Repayment of loans receivable | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash provided by investing activities from continuing operations | ||||||||
| Net cash provided by investing activities from discontinued operations | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Repurchases of common stock | ( | ) | - | |||||
| Repayment of loans payable | ( | ) | - | |||||
| Proceeds from shares issued for cash, net | ||||||||
| Net cash used in financing activities from continuing operations | ( | ) | ||||||
| Net cash used in financing activities from discontinued operations | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net Change In Cash, cash equivalents and restricted cash equivalents | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash equivalents - Beginning of Period | ||||||||
| Cash, cash equivalents and restricted cash equivalents - End of Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid during the period for income taxes | $ | $ | ||||||
| Cash paid during the period for interest expense | $ | $ | ||||||
| Non cash investing and financing activities | ||||||||
| Shares issued for settlement of liabilities | $ | $ | ||||||
| Prepaid expense financed with notes payable | $ | - | $ | |||||
| Commitment to repurchase common stock | $ | - | $ | |||||
| Reclassification of deposits for fixed assets | $ | $ | ||||||
| Loan proceeds received in cryptocurrency | $ | $ | ||||||
| Loan repayments denominated in cryptocurrency | $ | $ | ||||||
| Capitalization of ROU assets and liabilities - operating | $ | $ | ||||||
| Common stock cancelled for withholding taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
4
FORUM MARKETS, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS
Forum Markets, Inc. (formerly
ETHZilla Corporation) (the “Company”) was incorporated in the State of Delaware on
On February 24, 2026, the Company filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation to change the Company’s name from “ETHZilla Corporation” to “Forum Markets, Incorporated,” which became effective at 12:01 a.m. Eastern Time on February 25, 2026. Effective March 2, 2026, the Company’s common stock (“Common Stock”) began trading on The Nasdaq Capital Market under the ticker symbol “FRMM,” replacing the ticker symbol “ETHZ.”
The Company’s continuing operations consist primarily of the development of a blockchain-based platform focused on the acquisition, structuring, and tokenization of RWAs, including assets such as aerospace equipment, auto loans, manufactured home loans, and commercial real estate and land, which the Company intends to structure into regulated, tokenized financial products.
During 2025, the Company determined to discontinue its historical pharmaceutical research activities and to cease pursuing commercialization of the blockchain-based gaming technology platform (the “Gaming Technology Platform”) acquired in September 2024. The assets and liabilities and results of operations related to these activities have been classified as discontinued operations for all periods presented.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of the Company and entities in which the Company has a controlling financial interest. They have been prepared in accordance with GAAP. The Company reports financial results in U.S. dollars.
The Company consolidates entities in which it holds a controlling financial interest in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. As of June 30, 2026, the Company conducts its continuing operations directly through the parent entity. All intercompany transactions and balances have been eliminated in consolidation.
The Condensed Consolidated Financial Statements, in the opinion of management, reflect all adjustments, which include normal and recurring adjustments, necessary to fairly state the Company’s financial position, results of operations, and cash flows for the periods presented herein.
Additional information regarding the Company’s significant accounting policies is included in the Company’s Annual Report.
Use of Estimates
The preparation of accompanying financial statements, in conformity with GAAP, requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates and assumptions used in these Condensed Consolidated Financial Statements include, but are not limited to, the fair value of financial instruments (including staking receivables and convertible debt), the valuation of the Company’s digital assets, warrants, options, and embedded derivatives. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and may cause actual results to differ from those estimates.
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Digital Assets
The Company accounts for crypto assets within the scope of ASC 350-60, Intangibles – Goodwill and Other – Crypto Assets (“ASC 350-60”), at cost with subsequent measurement at fair value, with changes in fair value recognized in earnings. Certain liquid staking arrangements are accounted for as non-monetary receivables with embedded derivatives, which are separated and accounted for under ASC 815, Derivatives and Hedging (“ASC 815”).
Cash, Cash Equivalents and Restricted Cash Equivalents
The Company considers all
highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents, including certificates
of deposits and United States Treasury securities. As of June 30, 2026 and December 31, 2025, cash and cash equivalents totaled $
Concentrations of Credit Risk
The Company is subject to concentration of credit risk arising from its cash and cash equivalents, digital assets, and related counterparties, including financial institutions, custodians, and participants in liquid staking protocols. Cash balances may, at times, exceed federally insured limits. The Company mitigates this risk by placing cash with high-credit-quality financial institutions.
The Company also holds digital assets, including ETH, with third-party custodians and participates in liquid staking arrangements through third-party protocols. These arrangements expose the Company to risks related to counterparty nonperformance, custodian insolvency, and protocol-level events.
As of June 30, 2026, the Company’s
maximum exposure to loss related to these concentrations, assuming complete nonperformance by counterparties and no recovery of collateral,
consists primarily of (i) cash and cash equivalents, including restricted cash equivalents, with a carrying value of approximately $
The Company has not recognized an allowance for credit losses related to cash and receivable-type balances, including staking receivables, as of June 30, 2026.
Segment Reporting
ASC 280, Segment Reporting (“ASC 280”), requires annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources and assess performance.
The CODM uses net income to evaluate and make key operating decisions. Because the Company has a reportable segment and the measure of segment profit or loss is consolidated net income, the required disclosures under ASC 280 are presented on a consolidated basis. Accordingly, no additional disaggregated segment disclosures are required.
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Aircraft Engine Acquisition
The Company, through its wholly-owned subsidiary, ETHZilla Aerospace LLC, acquired three aircraft engines and related equipment in transactions accounted for as asset acquisitions. The aircraft engines are recorded at cost, including transaction costs directly attributable to the acquisition, and are presented within “Property and equipment, net” on the Condensed Consolidated Balance Sheets.
At the time of acquisition, the aircraft engines were subject to existing lease arrangements, which were assumed by the Company in connection with the transactions. The Company retained the prior classification of the leases as operating leases. Accordingly, the aircraft engines are depreciated on a straight-line basis over their estimated useful lives. Management reviews estimated useful lives and residual values periodically and revises such estimates prospectively, when appropriate.
Lease revenue is recognized in accordance with ASC 842, Leases (“ASC 842”). Lease income consists of fixed lease payments and variable consideration based on engine usage. Fixed lease payments are recognized on a straight-line basis over the lease term, while variable lease payments are recognized in the period in which the underlying usage occurs. Lease revenue is recognized only from the date control of the aircraft engines transfers to the Company and is presented within “Aircraft engine rental revenue” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
The Company has entered into third-party servicing arrangements related to the aircraft engines. Fees associated with these servicing arrangements are expensed as incurred.
The aircraft engines are evaluated for impairment in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”) whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset.
Eurus Aero Tokens
The Company, through its wholly-owned subsidiary, ETHZilla Aerospace LLC, issued profit participation interests in the form of cryptographic digital tokens (the “Eurus Aero Tokens”) that entitle holders to receive pro rata cash distributions derived from net cash flows generated by specified aircraft engines, including lease income and proceeds from a potential liquidity event. The Eurus Aero Tokens do not represent equity interests in the Company and do not convey voting or governance rights. Proceeds received from the issuance of the Eurus Aero Tokens are initially recorded as a liability, as the tokens represent contractual obligations to remit future cash flows to token holders. The liability is reduced as distributions are paid or become payable in accordance with the token documentation.
Warehouse Facility
The Company, through its wholly-owned subsidiary, ETHZilla Auto Loans LLC (“ETHZilla Auto Loans”), provides a revolving warehouse credit facility (the “Warehouse Facility”) to Anchored Finance, LLC (“Anchored Finance”) which is engaged in the business of funding auto loan receivables. Advances under the Warehouse Facility are secured by a first-priority perfected security interest in the underlying eligible receivables and related proceeds. The Company determined that advances made under the Warehouse Facility are classified as held for investment. As such, the loans will be reported on the balance sheet at their amortized cost basis.
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In accordance with ASC 310, Receivables (“ASC 310”), loan receivables are recognized when advances are funded and are subsequently measured at amortized cost, net of an allowance for expected credit losses, as applicable. Interest income on funded advances is recognized over time using the effective interest method and presented as “Interest income” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Warehouse Facility also provides for commitment fees on the unfunded portion of the commitment, which are recognized as income over the commitment period.
Loan receivables arising under the Warehouse Facility are derecognized upon repayment or settlement of the related advance, including repayment in connection with take-out of the pledged receivables. The Company evaluates these loan receivables for expected credit losses in accordance with ASC 326, Financial Instruments – Credit Losses (“ASC 326”), including consideration of historical experience, current conditions, reasonable and supportable forecasts, and the nature and value of collateral securing the advances.
Zippy Manufactured Home Loans
The Company, through its wholly-owned subsidiary, ETHZilla Modular Mortgage LLC (“ETHZilla Modular Mortgage”), acquires manufactured and modular home loan receivables (the “Zippy Loans”).
The Company determined that the Zippy Loans transaction represents the purchase of financial assets rather than a secured financing because control of the loans is transferred to the Company and the sale criteria under ASC 860, Transfer and Servicing are met. Accordingly, the Zippy Loans are accounted for as loan receivables under ASC 310. The Company also determined the transaction represents an asset acquisition under ASC 805, Business Combinations.
Zippy Loans are recognized when the Company obtains control of the loans and the contractual rights to principal and interest cash flows. The loans are initially recorded at cost, which includes the purchase price and directly attributable transaction costs, and are subsequently measured at amortized cost, net of an allowance for expected credit losses. Purchase price premiums or discounts that are integral to the loans’ yield are accreted or amortized into interest income over the expected life of the loans using the effective interest method. Interest income earned on the Zippy Loans is presented as “Interest income” in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss.
The Company evaluates the Zippy Loans for expected credit losses in accordance with ASC 326 and records an allowance for expected credit losses upon acquisition and reassesses the allowance at each reporting date. The Zippy Loans include Community Recourse Loans which management considers in assessing credit risk characteristics and estimating expected credit losses. In estimating expected credit losses, the Company considers the extent to which contractual recourse provisions mitigate the Company’s exposure to credit losses and evaluates expected credit losses based on the amounts expected to be collected from borrowers and, as applicable, from counterparties providing recourse.
Zippy Loans, LLC (or an affiliate) services the loans pursuant to a servicing arrangement. Servicing fees are recognized as incurred and included in “Loans receivable.” Loan purchases under the forward-flow arrangements are evaluated and accounted for as separate transactions at the time of acquisition, and the forward-flow arrangements do not, in and of themselves, result in recognition of loan receivables or liabilities prior to settlement. The Company determined that customary representations and warranties, indemnification, repurchase, recourse, and side letter provisions do not provide the seller with effective control over the transferred loans and do not give rise to separate liabilities at acquisition.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), which amends ASC 220-40, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (“ASC 220-40”). In January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date (“ASU 2025-01”), which also amends ASC 220-40 and clarifies the effective date of ASU 2024-03. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement, including specific information about certain costs and expenses. As clarified by ASU 2025-01, the amendments are effective for the Company for annual reporting beginning in fiscal 2028 and interim reporting beginning in fiscal 2029, applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting these standards on its Condensed Consolidated Financial Statements and related disclosures.
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NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Director and officer’s insurance | $ | $ | ||||||
| Aircraft engines deposit | ||||||||
| Derivative instruments, including collateral posted1 | ||||||||
| Loan collateral deposits2 | ||||||||
| Leasehold improvement deposit | ||||||||
| Professional fees | ||||||||
| Other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
| (1) | |
| (2) |
NOTE 4 – INVESTMENTS
Marketable Securities
The following table presents the amortized cost, gross unrealized gains and losses, and fair value of the Company’s marketable securities (in thousands):
| June 30, 2026 | ||||||||||||||||
| Security Type: | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
| Available-for-sale debt securities: | ||||||||||||||||
| Other fixed income securities | $ | $ | $ | ( | ) | $ | ||||||||||
| Equity securities measured at fair value: | ||||||||||||||||
| REITs | ||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
| (1) | Available for sale debt securities consist primarily of U.S. Treasury securities with contractual maturities of one year or less and other fixed income securities. |
| (2) | No allowance for credit losses was recorded for the periods presented. |
Equity Investments
Satschel Investment
The Company holds an investment
representing approximately
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Karus Investment
The Company holds an investment
representing approximately
Zippy Investment
The Company holds an investment
representing approximately
As of June 30, 2026, and December
31, 2025, the Company estimated the fair value of the final make whole amount (the “Final Make Whole Amount”) under
the Zippy Purchase Agreement (the “Zippy Purchase Agreement”) to be $
On June 30, 2026, the Company entered into Side Letter Amendment No. 2 to the Series B-3 Preferred Stock Purchase Agreement with Zippy, which amended the timing of the Company’s make whole obligation by replacing the original determination date with three separate measurement dates. For additional information on the make whole obligation, see Note 7 – Accrued Expenses.
NOTE 5 – DIGITAL ASSETS
Crypto assets within the scope of ASC 350-60
The following table presents the Company’s significant digital asset holdings (in thousands):
| June 30, 2026 | ||||||||||||
| Quantity | Cost Basis1 | Fair Value1 | ||||||||||
| ETH | $ | $ | ||||||||||
| USDC (USDC is a stablecoin meant to track the value of the U.S. dollar, backed by U.S. dollars and dollar-denominated assets) | ||||||||||||
| Liquid staking incentive tokens 2 | ||||||||||||
| Total digital asset holdings | $ | $ | ||||||||||
| (1) |
| (2) |
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The following table presents a roll forward of the Company’s digital asset holdings, consisting of ETH and staking incentive tokens (in thousands):
| Six Months Ended June 30, 2026 | ||||
| Digital Assets as of December 31, 2025 | $ | |||
| Additions1 | ||||
| Dispositions | ( | ) | ||
| Receipt and accrual of ETH from native staking activities | ( | ) | ||
| Receipt of ETH from derecognition of liquid staking activities | ||||
| Payment of loan collateral in cryptocurrency | ( | ) | ||
| Cryptocurrency denominated loan proceeds2 | ||||
| Cryptocurrency denominated loan repayments2 | ( | ) | ||
| Change in fair value of digital assets | ( | ) | ||
| Digital assets fair value | $ | |||
| (1) |
| (2) |
During the six months ended
June 30, 2026, the Company sold approximately
As of June 30, 2026, the Company
held approximately
Non-monetary receivable with an embedded derivative within the scope of ASC 310-10 and ASC 815-15
During the six months ended
June 30, 2026, the Company closed its liquid staking position. The Company recognized a change in fair value of the embedded derivative
of $
As of June 30, 2026, the Company
had no remaining staking receivable or associated embedded derivative, as the liquid staking position was closed during the six months
ended June 30, 2026. As of December 31, 2025 the carrying amount of the host contract (representing the
Derivative Instruments and Collateral Arrangements
The Company may transfer or
pledge digital assets or cash as collateral in connection with certain derivative instruments. During the six months ended June 30, 2026,
the Company entered into a series of derivative trades with a single counterparty in connection with the Company’s disposal of digital
asset holdings, including call and put options and non-deliverable forward contracts, with a total notional amount of approximately $
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Certain derivative contracts
may require the posting of collateral, which can include cash or digital assets, depending on the terms of the arrangement. Results of
the Company’s ETH-denominated derivative instruments, including realized and unrealized gains and losses, are recognized in earnings
and presented within “Digital asset gains and losses” in the Condensed Consolidated Statements of Operations and Comprehensive
Loss, as the instruments are used to economically manage exposure to changes in the fair value of ETH. During the six months ended June
30, 2026, the Company recognized realized losses of $
Collateral posted in connection
with derivative instruments may be returned upon settlement or early termination of the related contracts. During the six months ended
June 30, 2026, certain derivative instruments were settled or early terminated and related collateral was returned. As of June 30, 2026,
the Company had one open derivative asset position with a fair value of $
As of June 30, 2026, the Company
had
Eurus Aero Tokens
On February 12, 2026, the
Company, through its wholly-owned subsidiary, ETHZilla Aerospace LLC, launched a private offering of up to approximately $
As of June 30, 2026, the Company
had received gross proceeds of $
The Eurus Aero Tokens provide holders with contractual rights to pro rata distributions from the net cash flows generated by the aircraft engines, which are derived from monthly lease collections and, upon a liquidity event, proceeds from the sale of the aircraft engines. The Company’s obligations under the Eurus Aero Tokens are secured by collateral that includes the aircraft engines, related lease receivables, reserves, and insurance proceeds.
The Eurus Aero Tokens are digital securities issued on a blockchain network. The tokens themselves do not represent ownership interests in ETH, stablecoins, or other digital assets, nor do they constitute ownership interests in the aircraft engines.
The issuance of Eurus Aero Tokens did not result in the transfer or derecognition of the underlying aircraft engines or related lease receivables. Cash proceeds received from the token issuance are recorded separately from digital assets.
During the six months ended June 30, 2026, the Company did not make any cash distributions to Eurus Aero Token holders, and there was accrued payable related to declared but unpaid distributions as of June 30, 2026.
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NOTE 6 – LOANS RECEIVABLE
The Company’s loans receivable consist primarily of loans acquired and financed in connection with its RWA platform activities. Loans receivable are carried at amortized cost, net of any allowance for expected credit losses, and are included in “Loans Receivable” on the Company’s Condensed Consolidated Balance Sheets. The Company evaluates expected credit losses on loans receivable in accordance with ASC 326, considering the underlying collateral, contractual recourse provisions, and the creditworthiness of counterparties. Based on this evaluation, management concluded no allowance was recorded as of the reporting date.
Warehouse Facility Loan Receivables
The Company, through its
wholly-owned subsidiary ETHZilla Auto Loans, provides a revolving warehouse credit facility to Anchored Finance, LLC. Advances under
the Warehouse Facility are secured by eligible auto loan receivables and related collateral and are subject to borrowing base
requirements. The Warehouse Facility has a commitment amount of up to $10.0 million and an initial term of 12 months from the
closing date, with automatic renewal for successive six-month periods unless either party provides notice of non-renewal. Advances
under the Warehouse Facility carry interest at
Warehouse Facility loan receivables are accounted for as loans held for investment and are measured at amortized cost, net of any allowance for expected credit losses.
As of June 30, 2026, an aggregate of $
As of June 30, 2026, the Company evaluated these warehouse facility loan receivables for expected credit losses in accordance with ASC 326, and the related allowance was immaterial.
Zippy Manufactured Home Loan Receivables
The Company owns manufactured and modular home loan receivables secured by first-lien manufactured home collateral. The loans are serviced by Zippy Loans, LLC pursuant to applicable servicing agreements (the “Community Recourse Loans”).
The loan portfolio currently consists of Community Recourse Loans. Community Recourse Loans relate to manufactured homes located in designated manufactured housing communities and benefit from community recourse or repurchase arrangements under defined conditions for a limited period of time. Non-Recourse Loans, which do not include such provisions and rely solely on recovery from the underlying collateral, may be acquired in future periods pursuant to forward-flow arrangements.
The Community Recourse Loans are accounted for as loans held for investment
and are measured at amortized cost, including the effect of any unamortized premiums, net of any allowance for expected credit losses.
During the three months ended June 30, 2026, the Company acquired additional loans for a total purchase price of $
As of June 30, 2026, the outstanding principal balance of the manufactured
home loan receivables was $
The Company recognized interest income of $
Management concluded that an allowance for expected credit losses was not required as of June 30, 2026, as the Company’s exposure to credit losses is mitigated by the underlying collateral and contractual community recourse provisions.
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As of June 30, 2026, the Company’s loan balance and scheduled principal repayments were as follows:
| Warehouse Facility | Community Recourse Loans | Total | ||||||||||
| Principal Repayments due | ||||||||||||
| June 2027 | $ | $ | $ | |||||||||
| June 2028 | ||||||||||||
| June 2029 | ||||||||||||
| June 2030 | ||||||||||||
| June 2031 | ||||||||||||
| Thereafter | ||||||||||||
| Total principal | $ | $ | $ | |||||||||
| Unamortized premium | ||||||||||||
| Accrued interest income | ||||||||||||
| Total Loans receivable | ||||||||||||
| Current portion | ( | ) | ( | ) | ( | ) | ||||||
| Loans receivable, non current portion | $ | $ | $ | |||||||||
NOTE 7 – ACCRUED EXPENSES
Accrued expenses consist of the following (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Final Make Whole Provision | $ | $ | ||||||
| Professional fees | ||||||||
| Other | ||||||||
| Total accrued expenses | $ | $ | ||||||
Zippy Final Make Whole Provision
On June 30, 2026, the Company
and Zippy entered into Side Letter Amendment No. 2 to the Series B-3 Preferred Stock Purchase Agreement, as previously amended, to modify
the timing and calculation of the Final Make Whole Provision. The amendment replaced the original single settlement date with three separate
measurement dates occurring on July 31, 2026, September 30, 2026, and December 31, 2026. The amendment maintains Zippy’s economic protection
to receive aggregate proceeds equivalent to $
In April 2026, Zippy sold
As of June 30, 2026, Zippy
held
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NOTE 8 – REVENUE RECOGNITION
The Company recognizes revenue from native staking and liquid staking activities on the Ethereum blockchain as well as aircraft engine rental revenue.
Revenue by Source
Revenue consisted of the following (in thousands):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Native staking revenue | $ | $ | $ | $ | ||||||||||||
| Liquid staking revenue1 | ||||||||||||||||
| Aircraft engine rental | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
| (1) |
Revenue by Major Customers
The Company generated revenue from the following major customers, each of which represented 10% or greater of total revenue. All such revenue was generated within the Company’s single reportable segment (in thousands):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Coinbase – staking income | $ | $ | $ | $ | ||||||||||||
| Ether.fi – liquid staking | ||||||||||||||||
| Puffer – liquid staking | ( | ) | ||||||||||||||
| Delta Air Lines, Inc. | ||||||||||||||||
| American Airlines, Inc. | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Aircraft Engine Purchase Agreement
The Company owns three aircraft
engines that are leased to third-party customers under operating leases and accounted for in accordance with ASC 842. On January 17, 2026,
the Company acquired two CFM56-7B24 aircraft engines from an unaffiliated seller for an aggregate purchase price of $
On March 27, 2026, the Company, through its wholly-owned subsidiary
Eurus Aerospace Token I LLC, acquired one CFM56-5B5/P aircraft engine from Aero Engine Solutions, Inc. for $
The aircraft engines are recorded
within property and equipment and depreciated using the straight-line method over an estimated useful life of two and one-half years.
The Company recognized depreciation expense of $
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Lease revenue is recognized
in accordance with ASC 842. Lease income consists of fixed lease payments and variable consideration based on engine usage. Fixed lease
payments are recognized on a straight-line basis over the lease term, while variable lease payments are recognized in the period in which
the underlying usage occurs. Lease revenue is recognized only from the date control of the aircraft engines transfers to the Company and
is presented within “Aircraft engine rental revenue” in the Condensed Consolidated Statements of Operations and Comprehensive
Loss. During the three and six months ended June 30, 2026, the Company recognized aircraft engine lease revenue of $
The servicing arrangements
include a mutual purchase and sale option exercisable upon expiration or earlier termination of the related lease at a fixed option price
of $
NOTE 9 – DEBT
The following tables summarize the activity of loans payable (in thousands):
| Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Principal balance at December 31, 2025 | Principal additions | Principal repayments in cash | Repayments in cryptocurrency | Principal balance at June 30, 2026 | ||||||||||||||||
| First Insurance – 20251 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| Equities First Loan | ||||||||||||||||||||
| Aave Loan | ( | ) | ||||||||||||||||||
| Total loans payable and collateralized loans | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
| Less: loans payable and collateralized loans – current portion | - | |||||||||||||||||||
| Loans and collateralized loans payable – noncurrent portion | $ | $ | ||||||||||||||||||
| (1) |
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Loans Denominated in Digital Assets
Equities First Loan
The Company has an outstanding
collateralized loan arrangement with Equities First Holdings, LLC. As of June 30, 2026, the outstanding principal balance of the loan
was approximately $
The loan is secured by digital
assets. As of June 30, 2026, the Company had transferred
There were material changes to the terms of the loan during the six months ended June 30, 2026.
Aave Loan
During the six months ended June 30, 2026, the Company repaid the Aave Loan (the “Aave Loan”) in full. There were no material changes to the terms of the Aave Loan prior to repayment, and the Company did not experience any liquidation events or loss of collateral.
NOTE 10 – FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis by fair value hierarchy level (in thousands):
| June 30, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||||
| Marketable securities | ||||||||||||||||
| Digital Assets | ||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||
| (1) |
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NOTE 11 – EARNINGS PER SHARE
The computation of net loss per share is as follows (in thousands, except per share data):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net loss from continuing operations– basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted average common shares outstanding – basic and diluted | ||||||||||||||||
| Loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
For the three and six months
ended June 30, 2026, the weighted average common shares outstanding included
The following potentially dilutive securities were excluded from the computation of diluted net loss per share because their inclusion would have been antidilutive:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Stock options | ||||||||
| Unvested RSU awards | ||||||||
| Unvested PSU awards | ||||||||
| Warrants | ||||||||
| Convertible debt, net of discount | ||||||||
| Total | ||||||||
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Litigation and Other Loss Contingencies
The Company is subject to legal proceedings, claims, regulatory inquiries, and contingencies that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. As of June 30, 2026, the Company has not recorded any liabilities for loss contingencies, as management believes that any such matters are either not probable or not reasonably estimable.
Certain commitments, contractual arrangements, and contingent obligations are described in the Company’s audited Consolidated Financial Statements for the year ended December 31, 2025 included in the Company’s Annual Report. Except as described below, there have been no material changes to the matters previously disclosed in the Annual Report.
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Value Added Tax Matters
The Company, through its United Kingdom subsidiary, is registered for Value Added Tax (“VAT”) under the accrual accounting scheme. Under this scheme, VAT output tax becomes due when invoices are issued, irrespective of cash settlement. Management has identified that the settlement of certain existing liabilities could give rise to an obligation to remit additional VAT to HM Revenue & Customs in respect of VAT that has already been invoiced or collected.
As of June 30, 2026, the ultimate amount of any such payment cannot be reliably estimated and the likelihood of settlement remains uncertain. Accordingly, no provision has been recognized in the accompanying Condensed Consolidated Financial Statements. The Company will continue to monitor this matter and will recognize a liability or provide additional disclosures if and when a loss becomes probable and reasonably estimable.
Legal Proceedings and Settlements
As previously disclosed in the Company’s Annual Report, the Company has resolved certain litigation and other legal disputes through settlement agreements entered into during 2025. All material obligations under those settlement agreements have been satisfied, and there were no material developments related to such matters during the six months ended June 30, 2026. Accordingly, no additional accruals or disclosures are required as of June 30, 2026.
Indemnification and Employment-Related Commitments
The Company has entered into indemnification agreements with its directors and officers and employment and separation agreements with certain current and former executives, as described in the Company’s Annual Report. These arrangements include customary indemnification, severance, and compensation provisions.
There have been no material modifications to these arrangements and no new material commitments entered into during the six months ended June 30, 2026 that would require additional disclosure.
Zippy Make Whole Obligation
As of June 30, 2026, the
estimated fair value of the Company’s make whole obligation related to its investment in Zippy was approximately $
Termination of Asset Management Agreement
On May 29, 2026 (the “Termination Date”), the Company and Electric Treasury Edge, LLC (the “Asset Manager”) mutually agreed to terminate, without cause, the Amended and Restated Asset Management Agreement dated September 5, 2025 (the “Asset Management Agreement”), pursuant to which the Asset Manager had managed and monitored a portion of the Company’s digital assets, including its ETH, staking rewards, and stablecoins. The termination followed the Company’s change in its ETH deployment strategy and the disposition of substantially all of its ETH.
In connection with the termination,
the Company paid the Asset Manager all outstanding management fees and expenses due as of the Termination Date, together with an agreed
portion of the liquidated damages specified in the Asset Management Agreement, which fully discharged the Asset Manager’s ongoing duties
and obligations. The Company paid $
19
NOTE 13 – STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation and recognizes compensation cost for equity awards based on their grant-date fair value over the requisite service period.
On April 2, 2026, the Board
of Directors of the Company upon the recommendation of the Compensation Committee of the Board (the “Compensation Committee”),
approved (a) a one-time initial equity award and a pro-rated 2025 annual award to McAndrew Rudisill, the Chief Executive Officer and
Chairman of the Company, and (b) an equity award to John Saunders, the Chief Financial Officer of the Company. Each award consists
For each award, the RSUs
will vest in one-third installments on each of the first, second and third anniversaries of August 1, 2025 (the start date for both Mr.
Rudisill and Mr. Saunders), subject to continued employment through the applicable anniversary, and the
The PSU awards were determined
to have market-based and service-based vesting conditions. In accordance with ASC 718, the grant date fair value of the PSU’s was
estimated using a monte carlo simulation model, which simulates price performance of the Company’s common stock over the performance
period of
20
Stock Options
A summary of the option activity is presented below:
| Six Months Ended June 30, 2026 | ||||||||||||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Term (in Years) | Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited | - | |||||||||||||||
| Outstanding, June 30, 2026 | $ | $ | ||||||||||||||
| Exercisable, June 30, 2026 | $ | $ | ||||||||||||||
A summary of outstanding and exercisable stock options is presented below:
| June 30, 2026 | ||||||||||||||
| Stock Options Outstanding | Stock Options Exercisable | |||||||||||||
| Weighted Average | ||||||||||||||
| Exercise Price | Number of Shares | Remaining Life in Years | Number of Shares | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
Restricted Stock Units
A summary of RSU activity is presented below:
| Six Months Ended June 30, 2026 | ||||||||
| Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
| Nonvested at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited and cancelled | ||||||||
| Nonvested at June 30, 2026 | $ | |||||||
During the three and six
months ended June 30, 2026, the Company recognized $
21
Performance Stock Units
A summary of PSU activity is presented below:
| Six Months Ended June 30, 2026 | ||||||||
| Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
| Nonvested at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited and cancelled | ||||||||
| Nonvested at June 30, 2026 | $ | |||||||
Stock-based Compensation
The effects of stock-based compensation on the Condensed Consolidated Statements of Operations and Comprehensive Loss and Condensed Consolidated Balance Sheets are as follows (in thousands):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Statements of Operations and Comprehensive Loss | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
NOTE 14 – STOCKHOLDERS’ (DEFICIT) EQUITY
Shares Cancelled
During the six months ended
June 30, 2026, the Company cancelled
22
Warrants
A summary of the Common Stock underlying the warrants activity (including both liability and equity classified instruments) is presented below (in thousands, except number of shares, exercise price, and years data):
| Six Months Ended June 30, 2026 | ||||||||||||||||
| Number of Shares of Common Stock Underlying Warrants | Weighted Average Exercise Price | Weighted Average Remaining Life in Years | Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||||||
| Issued | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Expired | ( | ) | - | |||||||||||||
| Outstanding, June 30, 2026 | $ | $ | ||||||||||||||
| Exercisable, June 30, 2026 | $ | |||||||||||||||
A summary of outstanding and exercisable Common Stock underlying the warrants is presented below:
| June 30, 2026 | ||||||||||||||
| Common Stock Underlying Warrants Outstanding | Common Stock Underlying Warrants Exercisable | |||||||||||||
| Exercise Price | Number of Shares | Weighted Average Remaining Life in Years | Number of Shares | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
Second Amended and Restated Sales Agreement
As previously reported, on August 13, 2025, the Company entered into a Sales Agreement (the “Initial Sales Agreement”) with Clear Street LLC (“Clear Street”) to sell from time to time through Clear Street, acting as sales agent for the Company’s “at the market offering” program, shares of the Company’s Common Stock pursuant to the Company’s registration statement on Form S-3 (File No. 333-288194) (the “June Registration Statement”) and the prospectus supplement initially filed on August 13, 2025 (the “Initial Prospectus Supplement”). On August 22, 2025, the Company entered into an Amended and Restated Sales Agreement (the “Amended Sales Agreement”) with Clear Street to, among other things, change the registration statement and prospectus supplement pursuant to which sales of the Common Stock were to be made to the registration statement on Form S-3ASR (File No. 333-289811) (the “WKSI Registration Statement”) and the prospectus supplement initially filed on August 22, 2025 (the “WKSI Prospectus Supplement”). On November 14, 2025, the Company entered into an Amended and Restated Sales Agreement (the “Second Amended Sales Agreement”) with Clear Street and TCBI Securities, Inc., doing business as Texas Capital Securities (“Texas Capital Securities”), and together with Clear Street, the “Agents”), which, among other things, amended and restated the Amended Sales Agreement to include Texas Capital Securities as a sales agent.
On April 8, 2026, the Company entered into the Second Amended and Restated Sales Agreement with the Agents to cease all sales of Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement and to transition the program back to the June Registration Statement and Initial Prospectus Supplement. From and after the date of the Second Amended and Restated Sales Agreement, the Company will not sell any Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement, and any future sales will be made pursuant to the June Registration Statement and Initial Prospectus Supplement. There were no other material changes to the terms of the Second Amended Sales Agreement as a result of such amendments.
23
During the six months ended June 30, 2026, the Company sold
Stock Repurchase Program
During the six months ended
June 30, 2026,
Second Amended and Restated Sales Agreement with Clear Street
As previously reported, the Company established an “at the market” offering program in August 2025 to sell shares of its Common Stock from time to time through Clear Street LLC (“Clear Street”) as sales agent, pursuant to the Company’s registration statement on Form S-3 (File No. 333-288194) (the “June Registration Statement”) and the related prospectus supplement (the “Initial Prospectus Supplement”). The program was subsequently amended to make sales under the Company’s registration statement on Form S-3ASR (File No. 333-289811) (the “WKSI Registration Statement”) and a related prospectus supplement (the “WKSI Prospectus Supplement”), and to add TCBI Securities, Inc., doing business as Texas Capital Securities, together with Clear Street, as sales agents (the “Agents”).
On April 8, 2026, the Company entered into the Second Amended and Restated Sales Agreement with the Agents to cease all sales of Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement and to transition the program back to the June Registration Statement and Initial Prospectus Supplement. From and after the date of the Second Amended and Restated Sales Agreement, the Company will not sell any Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement, and any future sales will be made pursuant to the June Registration Statement and Initial Prospectus Supplement. There were no other material changes to the terms of the Second Amended Sales Agreement as a result of such amendments.
During the six months ended June 30, 2026, the Company sold
NOTE 15 – RELATED PARTIES
The Company enters into transactions with related parties, including its officers, directors, and entities affiliated with such individuals.
Accounts Payable
As of June 30, 2026 and December 31, 2025, accounts payable to related
parties were $
24
Zippy Transactions
Zippy is a greater than
NOTE 16 – DISCONTINUED OPERATIONS
During the prior period presented, the Company executed actions to abandon its pharmaceutical research operations and the Gaming Technology Platform which met the criteria to be classified as discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”).
Financial Information of Discontinued Operations
Summarized balance sheet information of discontinued operations is below (in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operations | ||||||||
| Intangible assets1 | ||||||||
| Total assets of discontinued operations | $ | $ | ||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related parties | ||||||||
| Accrued expenses | ||||||||
| Loan payable –current portion | ||||||||
| Current liabilities of discontinued operations | ||||||||
| Loan payable –noncurrent portion | ||||||||
| Total liabilities of discontinued operations | $ | $ | ||||||
| (1) |
The statements of operations of discontinued operations are summarized below (in thousands):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Research and development | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Research and development - related parties | ( | ) | ( | ) | ||||||||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Gain (loss) on settlement of liabilities | ( | ) | ||||||||||||||
| Net income (loss) from discontinued operations | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
25
NOTE 17 – SUBSEQUENT EVENTS
The Company evaluated subsequent events that occurred after the balance sheet date through the date the financial statements were issued.
Stock-Based Compensation
Subsequent to June 30, 2026, the Company issued
Sales of Common Stock
Subsequent to June 30, 2026,
the Company sold a total of
Repurchases of Common Stock
Subsequent to June 30, 2026, the Company repurchased and cancelled
a total of
Aircraft Engine Acquisitions and Lease Arrangements
On July 13, 2026, the Company, through its wholly-owned subsidiary
Eurus Aerospace Token I LLC, acquired one CFM International model CFM56-7B22 aircraft engine, together with all related parts and engine
records, from Aero Engine Solutions, Inc. for a purchase price of approximately $
On July 27, 2026, the Company,
through its wholly-owned subsidiary Eurus Aerospace Token I LLC, entered into an Engine Sale and Purchase Agreement with Aero Engine Solutions,
Inc. to acquire one CFM International model CFM56-7B aircraft engine, together with all related parts and engine records, for a purchase
price of approximately $
Zippy Make Whole Determination
On July 31, 2026, the first
of the three make-whole determination dates under Side Letter Amendment No. 2 to the Series B-3 Preferred Stock Purchase Agreement occurred
(see Note 4 – Investments). Based on the determination, the Company paid Zippy $
26
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
Forum Markets, Incorporated is a financial technology company focused on developing infrastructure that supports the origination, financing, and distribution of RWAs through blockchain-enabled capital markets.
The Company underwent a significant strategic shift in 2025, including a rebranding and transition away from its legacy biotechnology and gaming operations toward a digital asset-focused business model centered on treasury, investment, and tokenization activities. As a result, the Company’s current operations, financial profile, and key performance drivers differ materially from prior periods, and several areas of this MD&A represent the first two quarters of disclosure under the new strategy.
The Company operates as a single reportable operating segment under Accounting Standards Codification (ASC) 280. The Company’s operations are focused on blockchain infrastructure and operations, which are primarily related to holding, deploying, and managing digital assets and tokenization activities. These operations represent the Company’s primary revenue-generating activities, and all assets of the Company’s continuing operations are related to this single operating segment.
The Company has undergone several significant transformations over its operating history. Originally formed in 2016 as a clinical-stage biotechnology company operating under the name 180 Life Sciences Corp., the Company previously focused on the development of therapeutics for unmet medical needs. In subsequent periods, the Company expanded into software-enabled gaming initiatives, including the acquisition of certain blockchain-based gaming technology.
In August 2025, the Company rebranded as ETHZilla Corporation, reflecting an initial shift away from its legacy operations during which the Company completed a broader strategic transition, exiting its legacy biotechnology and gaming activities and refocusing its business on digital asset treasury management, investment activities, and tokenization-related strategies. The Company’s treasury activities are primarily centered on acquiring, holding, and deploying ETH to generate returns through staking and other yield-generating arrangements.
In early 2026, the Company completed a further rebrand to Forum Markets, Incorporated, aligning its name with its evolving strategy and business model. Under its current strategy, the Company focuses on digital asset activities and the development of tokenization-related investments. The Company is pursuing tokenization initiatives involving income-generating assets, which are expected to generate returns through asset yields, fees, and investment income over time. Revenues, expenses, and cash flows are influenced by digital asset market conditions, capital allocation decisions, and the timing of investment and tokenization activities.
As a result of this strategic transformation, the Company’s current operations, revenue drivers, expense profile, and risk exposures differ materially from prior periods, and financial results for historical periods may not be comparable to those of the current period.
Key Factors Affecting Performance
The Company’s operating results, financial condition, and cash flows are influenced by a number of trends and uncertainties related to its digital asset–focused business model, several of which are expected to continue to affect performance in future periods.
Performance of Real-World Asset Investments
The Company’s results are increasingly affected by its investments in income-generating real-world assets, including aircraft engines subject to operating leases and acquired loan portfolios. Revenue and cash flows from these assets depend on lessee and borrower performance, lease and loan terms, utilization, collateral values, and the timing and scale of additional asset acquisitions. Deterioration in credit quality, lessee or borrower default, or declines in asset or collateral values could adversely affect the Company’s results of operations.
27
Digital Asset Price Volatility
The Company’s results are sensitive to fluctuations in the market price of Ether (ETH), the cryptocurrency that powers the Ethereum blockchain, and other digital assets held or deployed in its operations. Changes in digital asset prices may materially affect reported earnings, the fair value of assets, and the timing and availability of liquidity, and may contribute to increased volatility in results of operations.
Staking Yield Variability
Revenue generated from staking activities is subject to variability based on network conditions, protocol economics, validator performance, and other factors outside the Company’s control. Changes in staking reward rates, protocol rules, or the performance of third-party service providers may affect revenue levels and operating results.
Growth of Tokenization Initiatives
The Company is in the early stages of developing and scaling its RWA tokenization strategy. The timing, magnitude, and sustainability of revenues from tokenization activities may affect future results of operations and cash flows and will depend on factors such as market adoption, regulatory considerations, and the availability of distribution and secondary trading infrastructure.
Evolving Regulatory Environment
The regulatory framework applicable to digital assets, staking activities, and tokenized securities continues to evolve in the United States and other jurisdictions. Changes in laws, regulations, enforcement priorities, or regulatory interpretations could increase compliance costs, restrict certain activities, or require modifications to the Company’s treasury or tokenization strategies. Regulatory developments may also affect market participation and investor demand, which could impact future operating results and cash flows.
Recent Events
Reinitiation of Share Repurchase Program
On April 15, 2026, the Company’s Board of Directors unanimously authorized the reinitiation of the Company’s share repurchase program, effective April 15, 2026, including authorization for repurchases in volumes that may exceed the limitations of the Rule 10b-18 safe harbor under the Exchange Act.
On June 29, 2026, the Board of Directors approved an amendment to the Company’s existing share repurchase program (the “Repurchase Program”), which was scheduled to terminate on June 30, 2026. Pursuant to the amendment, the Repurchase Program has been extended for one year, through June 30, 2027. The Board of Directors also approved expanding the program to expressly authorize the Company to effect repurchases through derivative transactions, in addition to other methods of repurchase that may be available to the Company from time to time. The Board of Directors also reduced the aggregate repurchase authorization under the Repurchase Program from $250 million to $100 million.
The Board of Directors will determine the actual timing, number, and value of any shares repurchased under the Repurchase Program in its discretion using factors such as, but not limited to, stock price, trading volume, general market conditions, and the ongoing assessment of the Company’s capital needs. There is no assurance of the number or aggregate price of any shares that the Company will repurchase. The Repurchase Program may be extended, suspended, or terminated at any time by the Board of Directors.
28
Special Committee and Review of Strategic Alternatives
On April 17, 2026, the Company announced that the Board of Directors had established a special committee (the “Special Committee”) comprised entirely of independent directors to evaluate proposals aimed at narrowing the gap between the Company’s current market value and the intrinsic value of its business and to identify an optimal outcome for stockholders. The Special Committee has been authorized to examine a full range of value-maximizing pathways available to the Company, including potential mergers with or acquisitions of private companies, the sale of the Company or material assets, partnerships with new capital partners to accelerate growth and platform development, or the return of substantially all of the Company’s capital and assets to stockholders, in an orderly fashion and in a form to be determined, if no other proposal meets the Special Committee’s valuation threshold.
Participation in AI Chip Infrastructure Financing
On April 8, 2026, the Company participated in an arrangement to deploy capital into short-term bridge loans financing the acquisition and deployment of NVIDIA Artificial Intelligence (“AI”) chips — the graphics processing units that power modern AI data centers. Under the arrangement, a third-party AI infrastructure bridge credit originator may present the Company with short-duration financing opportunities, and the Company is not obligated to participate in any transaction. The arrangement is intended to target annualized returns in the mid-teens. The first contemplated transaction is expected to involve a U.S.-based neocloud operator, with the Company considering a commitment of $25 million to $50 million.
Second Amended and Restated Sales Agreement
As previously reported, on August 13, 2025, the Company entered into the Initial Sales Agreement with Clear Street to sell from time to time through Clear Street, acting as sales agent for the Company’s ATM program, shares of the Company’s Common Stock pursuant to the June Registration Statement and the Initial Prospectus Supplement. On August 22, 2025, the Company entered into the Amended Sales Agreement with Clear Street to, among other things, change the registration statement and prospectus supplement pursuant to which sales of the Common Stock were to be made to the WKSI Registration Statement and the WKSI Prospectus Supplement. On November 14, 2025, the Company entered into the Second Amended Sales Agreement with Clear Street and TCBI Securities, Inc., doing business as Texas Capital Securities (“Texas Capital Securities”), and together with Clear Street, the Agents, which, among other things, amended and restated the Amended Sales Agreement to include Texas Capital Securities as a sales agent.
On April 8, 2026, the Company entered into the Second Amended and Restated Sales Agreement with the Agents to cease all sales of Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement and to transition the program back to the June Registration Statement and Initial Prospectus Supplement. From and after the date of the Second Amended and Restated Sales Agreement, the Company will not sell any Common Stock pursuant to the WKSI Registration Statement and WKSI Prospectus Supplement, and any future sales will be made pursuant to the June Registration Statement and Initial Prospectus Supplement. There were no other material changes to the terms of the Second Amended Sales Agreement as a result of such amendments.
Side Letter Amendment No. 2 with Zippy
On June 30, 2026, the Company and Zippy, Inc. (“Zippy”) entered into Side Letter Amendment No. 2 (the “Second Amendment”) to the Series B-3 Preferred Stock Purchase Agreement, dated as of December 9, 2025, as previously amended by the Side Letter Amendment dated March 25, 2026 (as so amended, the “Zippy Purchase Agreement”). As further detailed below, the Company and Zippy entered into the Second Amendment in furtherance of the parties’ ongoing strategic partnership, to provide both parties with greater flexibility with respect to the timing and measurement of the Final Make Whole Amount (as defined below) and to spread the risk associated with the performance of the Company’s common stock by replacing the single true-up determination date with three separate measurement and payment dates.
29
Under the Zippy Purchase Agreement as previously in effect, the Company was obligated to pay Zippy a single “Final Make Whole Amount,” measured as of a single true-up determination date of June 30, 2026 (the “Original True-Up Determination Date”), equal to the difference, if any, between the value of the Retained Stock (as defined in the Zippy Purchase Agreement) based on a per share price of $10.50 and the value of the Retained Stock based on the volume-weighted average price of the Company’s common stock for the ten (10) trading days prior to that date.
The Second Amendment amends Section 6.2 of the Zippy Purchase Agreement to replace the single Original True-Up Determination Date with a trifurcated true-up framework consisting of three separate measurement and payment dates, a first true-up date of July 31, 2026, a second true-up date of September 30, 2026, and a third true-up date of December 31, 2026, each with its own independent make-whole calculation and payment obligation. During a corresponding sell period to each true-up date, Zippy may sell, in its sole discretion, up to a designated number of shares of the Company’s common stock (up to 285,714 shares per period), and any eligible shares not sold during a prior period that are carried forward and become eligible for sale in the following period(s). After each true-up date, Zippy is required to deliver to the Company a written settlement statement, and the Company is required to pay the applicable make-whole amount, if any, in cash by wire transfer of immediately available funds within ten (10) business days after its receipt of the settlement statement (and in no event later than ten (10) business days after the applicable true-up date).
For each of the first two sell periods, the applicable make-whole amount equals the number of eligible shares actually sold during that period multiplied by the $10.50 per share price, less the aggregate gross proceeds Zippy received from those sales; no amount is payable with respect to unsold shares, and the make-whole amount is zero if gross proceeds equal or exceed the guaranteed amount. For the third true-up period, the make-whole amount is calculated both with respect to shares sold during the third sell period (measured against gross proceeds) and with respect to shares retained by Zippy through December 31, 2026 (measured against the volume-weighted average price of the Company’s common stock for the ten (10) trading days prior to December 31, 2026), with Zippy able to elect sale or retention treatment for shares in any combination in its sole discretion. The Second Amendment provides that the three make-whole amounts are calculated on distinct, non-overlapping pools of shares so that no double recovery occurs, and that the Company’s aggregate make-whole obligation will not exceed the amount necessary for Zippy to receive, in the aggregate, proceeds equivalent to $10.50 per share for each share originally comprising the stock consideration.
The Second Amendment also makes certain conforming changes, including (i) providing that the Company’s obligation to pay the Final Make Whole Amount for purposes of the forfeiture provisions of the Zippy Purchase Agreement will be deemed satisfied if the Company timely pays each of the three true-up make-whole amounts, while confirming that the Company’s failure to timely pay any such amount constitutes a failure to timely pay a cash amount for purposes of the “ETHZ Forfeiture Event” definition under the Zippy Purchase Agreement, and (ii) extending Zippy’s monthly stock transaction reporting covenant through December 31, 2026 and applying it separately with respect to each true-up determination date.
Components of Results of Operations
Revenue
Aircraft engine rental revenue consists of lease income earned from leasing the Company’s aircraft engines to third-party lessees, comprising fixed lease payments recognized on a straight-line basis over the lease term and variable payments based on engine usage. Staking revenue consists of our share of rewards earned from native and liquid ETH staking arrangements through third-party validator operators and staking protocols. Incentive revenue consists of incentive tokens earned from participation in certain liquid staking protocols based on deposited ETH and program-specific incentive structures.
30
Cost of Revenue
Cost of revenue consists of cost related to the Company’s aircraft engine rental agreements, including engine servicing agreements and depreciation on the aircraft engines.
General and Administrative
General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation, as well as professional fees (such as legal, accounting, and consulting services).
Other general and administrative expenses include office-related and overhead expenses (including rent, utilities, software, insurance, and dues and subscriptions), marketing and investor relations costs, bank charges, travel and entertainment expenses, and public company costs such as audit fees and SEC filing fees.
Dividend Income
Dividend income consists of cash distributions received from marketable securities that the Company holds as part of its strategic investment portfolio.
Interest Income
Interest income consists of interest earned on cash balances and short-term investments held by the Company, including interest earned on U.S. Treasury securities and interest-bearing accounts. Interest income includes interest income recognized on loan receivables related to the Zippy loan portfolio and warehouse facility.
Interest Expense
Interest expense consists of interest incurred on outstanding debt obligations, primarily the Equities First loan and the Aave loan.
Other Expense
Other expense consists primarily of the reversal of previously recognized reward revenue associated with protocol-based incentive arrangements.
Change in Fair Value of Derivative Instruments
Change in Fair Value of Derivative Instruments consists of net realized and unrealized gains and losses on the Company’s ETH-denominated derivative instruments. Gains and losses arise from changes in market prices and changes in fair value and settlement of the instruments, as applicable.
Change in Fair Value of Available for Sale Securities
Change in fair value of available-for-sale securities reflects unrealized gains and losses resulting from changes in market prices of investment securities held by the Company.
Digital Asset Gains and Losses
Digital asset gains and losses consist of realized and unrealized gains and losses on ETH and liquid staking incentive tokens held by the Company. Gains and losses arise from changes in market prices and the sale, transfer, or redeployment of ETH.
Change in Fair Value of Long-Term Receivable Derivative
Change in fair value of long-term receivable derivative represents the change in fair value of the cryptocurrency holdings under liquid staking protocols.
31
Gain (Loss) on Make Whole Provision
Gain (loss) on make whole provision represents the estimated make whole amount pursuant to the Zippy shares in accordance with the Zippy Purchase Agreement.
Income Tax Expense (Benefit)
Income tax expense consists primarily of state income taxes and deferred income tax effects. The Company maintains valuation allowances against certain deferred tax assets where realization is not considered more likely than not.
Net Loss from Discontinued Operations
Net loss from discontinued operations reflects the results of operations of business components that have been disposed of or otherwise exited and are no longer part of the Company’s continuing operations. The results of discontinued operations are presented separately from continuing operations to provide comparability across periods. Discontinued operations include all revenues, expenses, gains, and losses directly attributable to those exited activities.
Consolidated Results of Operations
For the Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
The following table presents the results of our operations (in thousands) for the three months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Revenue: | ||||||||||||||||
| Aircraft engine rental revenue | $ | 1,365 | $ | - | $ | 1,365 | 100 | |||||||||
| Total Revenue | 1,365 | - | 1,365 | 100 | ||||||||||||
| Cost of Revenue: | ||||||||||||||||
| Aircraft engine rental | 967 | - | 967 | 100 | ||||||||||||
| Total Cost of Revenue | 967 | - | 967 | 100 | ||||||||||||
| Gross Profit | 398 | - | 398 | 100 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | 10,340 | 1,353 | 8,987 | 664 | ||||||||||||
| Total Operating Expenses | 10,340 | 1,353 | 8,987 | 664 | ||||||||||||
| Loss From Operations | (9,942 | ) | (1,353 | ) | (8,589 | ) | (635 | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Dividend income | 418 | - | 418 | 100 | ||||||||||||
| Interest income | 377 | - | 377 | 100 | ||||||||||||
| Other income | - | 7 | (7 | ) | (100 | ) | ||||||||||
| Interest expense | (238 | ) | - | (238 | ) | (100 | ) | |||||||||
| Change in fair value of derivative instruments | 636 | - | 636 | 100 | ||||||||||||
| Change in fair value of available for sale securities | 80 | - | 80 | 100 | ||||||||||||
| Digital asset gains and losses | (6,437 | ) | - | (6,437 | ) | (100 | ) | |||||||||
| Gain on make whole provision | 2,685 | - | 2,685 | 100 | ||||||||||||
| Total other income (expense), net | (2,479 | ) | 7 | (2,486 | ) | (35,514 | ) | |||||||||
| Loss Before Income Taxes | (12,421 | ) | (1,346 | ) | (11,075 | ) | (823 | ) | ||||||||
| Income tax benefit | - | - | - | - | ||||||||||||
| Net Loss From Continuing Operations | (12,421 | ) | (1,346 | ) | (11,075 | ) | (823 | ) | ||||||||
| Net Loss From Discontinued Operations | (397 | ) | (381 | ) | (16 | ) | (4 | ) | ||||||||
| Net Loss | $ | (12,818 | ) | $ | (1,727 | ) | $ | (11,091 | ) | (642 | ) | |||||
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Revenue
Revenue for the three months ended June 30, 2026 was $1.4 million. There was no revenue for the three months ended June 30, 2025. The increase compared to the prior period was driven by the Company’s shift to a digital asset focused business model, as the Company did not generate revenue under its legacy operations. Current revenues are primarily derived from aircraft engine leasing activities. Over time, the Company expects revenue generation to expand through the continued development of its tokenization strategies and related investment activities. The following discussion disaggregates total revenue into two primary revenue streams.
The following discussion disaggregates total revenue into two primary revenue streams.
| i. | Aircraft engine rental revenue. Aircraft engine rental revenue was $1.4 million for the three months ended June 30, 2026. There was no aircraft rental revenue for the three months ended June 30, 2025. The increase was attributable to the acquisition of aircraft engines subject to operating lease arrangements during the period. Aircraft rental revenue is generally driven by the contractual lease rates, the timing of lease commencement, and the number of engines under lease during the period. |
Cost of Revenue
Cost of revenues for the three months ended June 30, 2026 was $1.0 million. There was no cost of revenue for the three months ended June 30, 2025. The increase in cost of revenue compared to the prior year was attributable to depreciation and other costs related to our aircraft engine lease arrangements.
General and Administrative
General and administrative expenses for the three months ended June 30, 2026 were $10.3 million, compared to $1.4 million for the three months ended June 30, 2025.
The increase in general and administrative expenses compared to the prior year was driven primarily by higher professional fees of $4.0 million, consisting mainly of consulting, accounting, and legal costs incurred in connection with the Company’s strategic initiatives. The increase was also attributable to higher marketing and public relations costs of $0.7 million, stock-based compensation expense of $3.7 million related to equity awards granted during the period, and higher public company costs of $0.3 million, including audit, SEC filing, and transfer agent fees.
Dividend Income
Dividend income for the three months ended June 30, 2026 was $0.4 million, reflecting returns earned on marketable securities acquired during 2025 as part of the Company’s strategic investment activities. There was no comparable dividend income in the prior period, as the Company did not have a significant USD balance to invest in securities.
Interest Income
Interest income for the three months ended June 30, 2026 was $0.4 million, reflecting interest earned on cash and interest-bearing accounts following the Company’s capital-raising activities during 2025. Interest income also reflects interest earned on loan receivables. During the three months ended June 30, 2026, interest income recognized on loan receivables related to the Zippy loan portfolio and warehouse facility was approximately $0.3 million and $0.07 million, respectively.
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There was no comparable interest income in the prior period, as these balances were generated during the current period.
Interest Expense
Interest expense for the three months ended June 30, 2026 was $0.2 million, primarily reflecting interest incurred on the Equities First Loan. There was no comparable, meaningful interest expense in the prior period.
Change in Fair Value of Derivative Instruments
Change in fair value of derivative instruments for the three months ended June 30, 2026 was $0.6 million, primarily reflecting the change in fair value of the Company’s ETH-denominated derivative instruments entered into during the period in connection with the Company’s disposition of digital asset holdings, as well as settlement and early termination of certain contracts during the period. There was no comparable change in the prior year, as the Company did not enter into or hold similar derivative instruments during that period.
Change in Fair Value of Available for Sale Securities
Change in fair value of available-for-sale securities for the three months ended June 30, 2026 was $0.08 million, reflecting unrealized gains and losses resulting from changes in market prices of equity investment securities acquired during the period. There was no comparable, meaningful change in the prior period, as these investments were not held previously.
Digital Asset Gains and Losses
Digital asset losses for the three months ended June 30, 2026 were $6.4 million, primarily reflecting approximately $6.4 million of unrealized losses resulting from changes in market prices of ETH and liquid staking incentive tokens held during the period. There were no digital assets held in the prior period.
Gain on Make Whole Provision
Gain on make whole provision represents changes in the estimated make-whole obligation associated with the Company’s cost-method investment in Zippy, resulting in a $2.5 million gain for the three months ended June 30, 2026, primarily driven by changes in the Company’s stock price relative to the agreed valuation terms during the period. There was no comparable activity for the three months ended June 30, 2025.
Net Loss from Discontinued Operations
During the year ended December 31, 2025, the Company made a strategic decision to discontinue its pharmaceutical research operations and Gaming Technology Platform. Accordingly, the results of these operations are presented as discontinued operations for all periods presented.
Net loss from discontinued operations for the three months ended June 30, 2026 was $0.4 million, primarily reflecting operating losses related to the Company’s former pharmaceutical research operations, compared to net loss from discontinued operations of $0.4 million for the three months ended June 30, 2025.
The exits were part of management’s strategic decision to discontinue legacy operations and focus on digital asset and tokenization activities. The Company does not expect discontinued operations to have a material impact on future results of operations or cash flows.
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For the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
The following table presents the results of our operations (in thousands) for the six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | Change | |||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Revenue: | ||||||||||||||||
| Aircraft engine rental revenue | $ | 2,453 | $ | - | $ | 2,453 | 100 | |||||||||
| Staking revenue | 1,771 | - | 1,771 | 100 | ||||||||||||
| Total Revenue | 4,224 | - | 4,224 | 100 | ||||||||||||
| Cost of Revenue: | ||||||||||||||||
| Aircraft engine rental | 1,473 | - | 1,473 | 100 | ||||||||||||
| Total Cost of Revenue | 1,473 | - | 1,473 | 100 | ||||||||||||
| Gross Profit | 2,751 | - | 2,751 | 100 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | 17,326 | 3,320 | 14,006 | 422 | ||||||||||||
| Total Operating Expenses | 17,326 | 3,320 | 14,006 | 422 | ||||||||||||
| Loss From Operations | (14,575 | ) | (3,320 | ) | (11,255 | ) | (339 | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Dividend income | 472 | - | 472 | 100 | ||||||||||||
| Interest income | 481 | - | 481 | 100 | ||||||||||||
| Other income | - | 13 | (13 | ) | (100 | ) | ||||||||||
| Interest expense | (1,238 | ) | - | (1,238 | ) | (100 | ) | |||||||||
| Other expense | (2,231 | ) | - | (2,231 | ) | (100 | ) | |||||||||
| Change in fair value of derivative instruments | (10,374 | ) | - | (10,374 | ) | (100 | ) | |||||||||
| Change in fair value of available for sale securities | 126 | - | 126 | 100 | ||||||||||||
| Digital asset gains and losses | (12,779 | ) | - | (12,779 | ) | (100 | ) | |||||||||
| Change in fair value of long-term receivable derivative | (48,637 | ) | - | (48,637 | ) | (100 | ) | |||||||||
| Loss on make whole provision | (1,200 | ) | - | (1,200 | ) | (100 | ) | |||||||||
| Total other income (expense), net | (75,380 | ) | 13 | (75,393 | ) | (579,946 | ) | |||||||||
| Loss Before Income Taxes | (89,955 | ) | (3,307 | ) | (86,648 | ) | (2,620 | ) | ||||||||
| Income tax benefit | - | - | - | - | ||||||||||||
| Net Loss From Continuing Operations | (89,955 | ) | (3,307 | ) | (86,648 | ) | (2,620 | ) | ||||||||
| Net Income (Loss) From Discontinued Operations | 873 | (789 | ) | 1,662 | 211 | |||||||||||
| Net Loss | $ | (89,082 | ) | $ | (4,096 | ) | $ | (84,986 | ) | (2,075 | ) | |||||
Revenue
Revenue for the six months ended June 30, 2026 was $4.2 million. There was no revenue for the six months ended June 30, 2025. The increase compared to the prior period was driven by the Company’s shift to a digital asset focused business model, as the Company did not generate revenue under its legacy operations. Going forward, revenues are expected to be driven primarily by the continued development of the Company’s tokenization strategies and the aircraft engine leasing activity.
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The following discussion disaggregates total revenue into two primary revenue streams.
| i. | Staking revenue. Staking revenue consists of native staking revenue, liquid staking revenue and reward revenue, each as more fully described below. |
| a. | Native staking revenue. Native staking revenue was $1.5 million for the six months ended June 30, 2026. There was no native staking revenue for the six months ended June 30, 2025. The increase was attributable to the commencement of the Company’s native ETH staking activities during the second half of 2025. Native staking revenue is generally driven by the amount of ETH staked, applicable staking reward rates and validator arrangements, and the market price of ETH at the time rewards are earned and or received. |
| b. | Liquid staking revenue. Liquid staking revenue was $0.3 million for the six months ended June 30, 2026. There was no liquid staking revenue for the six months ended June 30, 2025. The increase was attributable to the commencement of the Company’s liquid staking activities during the second half of 2025. Liquid staking revenue is generally driven by the amount of ETH deposited into liquid staking protocols, applicable protocol reward rates and incentive structures, and the market price of ETH at the time rewards are earned and or received. |
| ii. | Aircraft engine rental revenue. Aircraft engine rental revenue was $2.5 million for the six months ended June 30, 2026. There was no aircraft rental revenue for the six months ended June 30, 2025. The increase was attributable to the acquisition of aircraft engines subject to operating lease arrangements during the period. Aircraft rental revenue is generally driven by the contractual lease rates, the timing of lease commencement, and the number of engines under lease during the period. |
Cost of Revenue
Cost of revenue for the six months ended June 30, 2026 was $1.5 million. There was no cost of revenue for the six months ended June 30, 2025. The increase in cost of revenue compared to the prior year was attributable to depreciation and other costs related to our aircraft engine lease arrangements.
General and Administrative
General and administrative expenses for the six months ended June 30, 2026 were $17.3 million, compared to $3.3 million for the six months ended June 30, 2025.
The increase in general and administrative expenses compared to the prior year was driven primarily by higher professional fees of $8.0 million, consisting mainly of consulting, accounting, and legal costs incurred in connection with the Company’s strategic initiatives. The increase was also attributable to higher marketing and public relations costs of $1.6 million, stock-based compensation expense of $3.2 million related to equity awards granted during the period, and higher public company costs of $1.2 million, including audit, SEC filing, and transfer agent fees.
Dividend Income
Dividend income for the six months ended June 30, 2026 was $0.5 million, reflecting returns earned on marketable securities acquired during 2025 as part of the Company’s strategic investment activities. There was no comparable dividend income in the prior period, as the Company did not have a significant USD balance to invest in securities.
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Interest Income
Interest income for the six months ended June 30, 2026 was $0.5 million, reflecting interest earned on cash and interest-bearing accounts following the Company’s capital-raising activities during 2025. Interest income also reflects interest earned on loan receivables. During the six months ended June 30, 2026, interest income recognized on loan receivables related to the Zippy loan portfolio and warehouse facility was approximately $0.4 million and $0.1 million, respectively.
There was no comparable interest income in the prior period, as these balances were generated during the current period.
Interest Expense
Interest expense for the six months ended June 30, 2026 was $1.2 million, primarily reflecting interest incurred on the Equities First loan and the Aave loan, the latter of which was repaid during the first quarter of 2026. There was no comparable, meaningful interest expense in the prior period.
Other Expense
Other expense for the six months ended June 30, 2026 was $2.2 million, primarily reflecting the reversal of previously recognized reward revenue associated with the early exit from a protocol-based incentive arrangement. This expense was recognized during the first quarter of 2026, with no corresponding expense recognized during the three months ended June 30, 2026. Upon exit, the Company retained a pro rata portion of the incentive tokens earned during the participation period and returned a portion of previously granted tokens. There was no comparable expense in the prior-year period, as the Company did not participate in these arrangements until the second half of 2025.
Change in Fair Value of Derivative Instruments
Change in fair value of derivative instruments for the six months ended June 30, 2026 was $10.4 million, primarily reflecting the change in fair value of the Company’s ETH-denominated derivative instruments entered into during the period in connection with the Company’s disposition of digital asset holdings, as well as settlement and early termination of certain contracts during the period. There was no comparable change in the prior year, as the Company did not enter into or hold similar derivative instruments during that period.
Change in Fair Value of Available for Sale Securities
Change in fair value of available-for-sale securities for the six months ended June 30, 2026 was $0.1 million, reflecting unrealized gains and losses resulting from changes in market prices of equity investment securities acquired during the period. There was no comparable, meaningful change in the prior period, as these investments were not held previously.
Digital Asset Gains and Losses
Digital asset losses for the six months ended June 30, 2026 were $12.8 million, primarily reflecting approximately $124.6 million of realized losses recognized upon the sale, transfer, or redeployment of ETH, partially offset by approximately $111.8 million of unrealized gains resulting from changes in market prices of ETH and liquid staking incentive tokens held during the period. Unrealized gains and losses were driven primarily by fluctuations in the market price of ETH and changes in the quantity of digital assets held during the period. There were no digital assets held in the prior period.
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Change in Fair Value of Long-Term Receivable Derivative
The change in fair value of the long-term receivable derivative for the six months ended June 30, 2026 was $48.6 million, primarily driven by changes in the market price of ETH, the accrual of staking rewards under liquid staking arrangements, and changes in the quantity of assets deployed in such protocols during the period. There was no comparable activity for the six months ended June 30, 2025.
Loss on Make Whole Provision
Loss on make whole provision represents changes in the estimated make-whole obligation associated with the Company’s cost-method investment in Zippy, resulting in a $1.2 million loss for the six months ended June 30, 2026, primarily driven by changes in the Company’s stock price relative to the agreed valuation terms during the period. There was no comparable activity for the six months ended June 30, 2025.
Net Income from Discontinued Operations
During the year ended December 31, 2025, the Company made a strategic decision to discontinue its pharmaceutical research operations and Gaming Technology Platform. Accordingly, the results of these operations are presented as discontinued operations for all periods presented.
Net income from discontinued operations for the six months ended June 30, 2026 was $0.9 million, primarily reflecting operating losses of approximately $0.5 million related to the Company’s former pharmaceutical research operations and gain on settlement of liabilities of approximately $1.4 million related to a settlement with a former consultant.
The exits were part of management’s strategic decision to discontinue legacy operations and focus on digital asset and tokenization activities. The Company does not expect discontinued operations to have a material impact on future results of operations or cash flows.
Non-GAAP Financial Measures
Although we believe that net income or loss, as determined in accordance with GAAP, is the most appropriate earnings measure, we use EBITDA and Adjusted EBITDA as key profitability measures to assess the performance of our business. We believe these measures help illustrate underlying trends in our business and we use these measures to establish budgets and operational goals, and communicate internally and externally, in managing our business and evaluating its performance. We also believe these measures help investors compare our operating performance with its results in prior periods in a way that is consistent with how management evaluates such performance. EBITDA is a non-GAAP profitability measure that represents net income or loss for the period before the impact of the interest expense, income tax expense (benefit) and depreciation and amortization of property, plant and equipment and intangible assets. EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting financing expenses), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense).
Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses. During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including non-cash stock-based compensation, business development and integration expenses, offering costs, non-cash adjustments to the fair value of earnout consideration, and non-cash adjustments to the fair value of outstanding warrants. Our management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.
Each of the profitability measures described below are not recognized under GAAP and do not purport to be an alternative to net income or loss determined in accordance with GAAP as a measure of our performance. Such measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for our results as reported under GAAP. EBITDA and Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used only in conjunction with our GAAP profit or loss for the period. Our management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, these measures may not be comparable to other similarly titled measures of other companies.
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EBITDA and Adjusted EBITDA are unaudited, and have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, or future or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, capital expenditures or working capital needs; EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments; although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In addition, other companies in this industry may calculate EBITDA and Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures, please see the below reconciliation of these non-GAAP financial measures to their GAAP counterparts.
The Company defines EBITDA as earnings before interest, taxes, depreciation, and amortization, and Adjusted EBITDA as EBITDA plus stock-based compensation.
The reconciliation of Net loss from continuing operations, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA (in thousands) for the three and six months ended June 30, 2026 and 2025, is as follows:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Loss From Continuing Operations | $ | (12,421 | ) | $ | (1,346 | ) | $ | (89,955 | ) | $ | (3,307 | ) | ||||
| Interest | 238 | - | 1,238 | - | ||||||||||||
| Taxes | - | - | - | - | ||||||||||||
| Depreciation and Amortization | 936 | - | 1,409 | - | ||||||||||||
| EBITDA | (11,247 | ) | (1,346 | ) | (87,308 | ) | (3,307 | ) | ||||||||
| Stock-based compensation1 | 3,813 | 103 | 3,917 | 681 | ||||||||||||
| Adjusted EBITDA | $ | (7,434 | ) | $ | (1,243 | ) | $ | (83,391 | ) | $ | (2,626 | ) | ||||
| (1) | Represents non-cash stock-based compensation expense associated with employee and non-employee equity awards, including restricted stock units and performance stock units granted to directors and management, included in “General and administrative” expenses on the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
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Liquidity and Capital Resources
During the year ended December 31, 2025, the Company completed significant equity and debt financing transactions, generating proceeds of approximately $860.0 million, that materially improved its liquidity position and extended the maturity profile of its obligations. As of June 30, 2026 and December 31, 2025, the Company had $4.1 and $8.0 million of cash and cash equivalents on hand, respectively, and $44.0 million and $4.4 million of marketable securities, respectively.
Management monitors liquidity based on expected operating cash requirements, capital commitments and near-term obligations relative to available liquid resources and planned financing activities. Our liquidity management strategy focuses on maintaining sufficient liquidity to fund operations and support the execution of our strategic initiatives. Management also considers known uncertainties, including changes in market conditions that could affect the value and liquidity of certain assets and the timing of access to restricted balances.
The Company may also pursue additional offering transactions as needed to fund operations and financing obligations. Future offering transactions may include Common Stock (including through at-the-market sales under the Second Amended and Restated Sales Agreement), warrant coverage or other convertible securities, subject to Board of Directors approval and applicable Nasdaq stockholder approval requirements. As of the date of this Report, the Company has not agreed to any definitive funding terms or finalized any offering structures. Future capital requirements will depend on operating performance, market conditions, and the execution of our business strategy, including potential periods of digital asset price volatility.
Principal and Potential Sources of Liquidity
Our principal and potential sources of liquidity consist primarily of cash and cash equivalents, cash flows from operating activities, and proceeds from financing activities. We believe that our existing sources of liquidity are, and will continue to be, sufficient to meet our working capital and capital expenditure requirements in both the short and long term.
We also hold ETH which is accounted for as a digital asset. While ETH is not considered a cash equivalent and is subject to market volatility, these holdings may be converted into cash and used as a source of liquidity if needed, subject to market conditions and strategic considerations.
We also maintain restricted cash equivalents, which are not available for general corporate purposes as they are subject to contractual restrictions (including being maintained as collateral under certain arrangements). These balances may become available for liquidity purposes upon the satisfaction of the applicable release conditions.
Cash Flows
As of June 30, 2026 and December 31, 2025, we had cash balances of $4.1 million and $8.0 million, respectively, and working capital surplus of $8.9 million and working capital deficit of $27.4 million, respectively.
Operating Activities
For the six months ended June 30, 2026, cash used in operating activities from continuing operations totaled $32.4 million compared to cash used in operating activities from continuing operations of $1.9 million for the six months ended June 30, 2025. Cash used in operating activities during the six months ended June 30, 2026 was primarily attributable to our net loss of $90.0 million, partially offset by non-cash items in the aggregate amount of $78.7 million, including a $48.6 million change in fair value of long term receivable derivative, a $10.4 million change in the fair value of derivative instruments, $12.8 million of digital asset gains and losses, and a $1.2 million loss on the make-whole provision, together with depreciation and amortization and stock-based compensation expense. Operating cash flows were also impacted by changes in operating assets and liabilities, primarily driven by a $14.0 million increase in prepaid expenses and other current assets, a $3.4 million decrease in accrued expenses, a $1.9 million decrease in accounts payable, $1.0 million increase in accounts receivable and a $0.9 million decrease in operating lease liabilities.
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Our cash used in operating activities for the six months ended June 30, 2025 was primarily attributable to our net loss of $3.3 million, adjusted for non-cash expenses of $0.7 million, as well as $0.8 million of net cash provided by changes in operating assets and liabilities.
Investing Activities
For the six months ended June 30, 2026, cash provided by investing activities from continuing operations totaled $54.0 million compared to a de minimis amount of investing activity for the six months ended June 30, 2025. Cash provided by investing activities during the six months ended June 30, 2026 was primarily attributable to $128.1 million in proceeds from the sale of cryptocurrency, partially offset by $39.4 million of purchases of marketable securities, $0.8 million of purchases of digital assets, $16.8 million of purchases of aircraft engines, and $17.4 million of purchases of loan receivables. In addition, the Company had $0.4 million of cash inflows from repayments of loans receivable during the period.
Financing Activities
For the six months ended June 30, 2026, cash used in financing activities from continuing operations totaled $26.1 million compared to a de minimis amount of financing activity for the six months ended June 30, 2025. Cash used in financing activities during the six months ended June 30, 2026 was attributable to $31.3 million for the repurchase of common stock, and $0.3 million for the repayment of loans payable, offset by $5.5 million in net proceeds from shares issued for cash under the ATM Program.
Capital Requirements and Contractual Obligations
Our capital requirements primarily relate to supporting ongoing operations, funding working capital needs, servicing existing obligations, and executing our tokenization and investment strategy. We expect to continue to incur operating losses in the near term as we execute our strategy.
Our contractual obligations are limited in nature and consist primarily of professional services agreements incurred in the ordinary course of business. The Company incurs ongoing professional services costs and custody, servicing, and asset management fees related to its digital asset activities and owned assets, which are generally short-term in nature and variable based on activity levels.
In connection with certain investment and financing arrangements, the Company may be subject to contingent or conditional obligations, including potential true-up or repurchase mechanisms, such as those related to the Zippy investment. As of June 30, 2026, management does not believe that any such contingent obligations are reasonably likely to have a material adverse effect on the Company’s liquidity or capital resources.
The Company does not have any material long-term debt maturities, other than a collateralized loan totaling $26.0 million which is secured by 12,441 ETH, material purchase obligations, or other significant contractual commitments that are reasonably likely to have a material adverse effect on its liquidity or capital resources. In addition, the Company does not have any material off-balance-sheet arrangements that are reasonably likely to have a material effect on liquidity, capital resources, or results of operations.
Critical Accounting Estimates
Our Condensed Consolidated Financial Statements are prepared in accordance with GAAP and require management to apply judgment in selecting accounting policies and in making estimates and assumptions. These judgments and estimates affect the reported amounts of assets and liabilities, the recognition and presentation of revenues and expenses, and the disclosures included in these financial statements. Certain estimates are sensitive to changes in assumptions, including estimates that depend on market data and valuations, as well as the interpretation of contractual terms in our arrangements. Actual results could differ from our estimates, and those differences could impact our results of operations and financial position in future periods. There have been no material changes to our critical accounting estimates as compared to those disclosed in our Annual Report.
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Significant Accounting Policies
See Note 2 – Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements included in this Report for a discussion about significant accounting policies relevant to the Company. Additional information regarding the Company’s significant accounting policies is included in the Company’s Annual Report.
Recently Issued Accounting Pronouncements
See Note 2 – Summary of Significant Accounting Policies—Recently Issued Accounting Pronouncements of our Consolidated Financial Statements included in this Report for a discussion about new accounting pronouncements issued and adopted as of the date of this Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Item 10(f)(1) of Regulation S-K.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our CEO and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on the evaluation, our management concluded that, as of June 30, 2026, the Company’s disclosure controls and procedures were not effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures as of June 30, 2026.
Inherent Limitations on Effectiveness of Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO, or persons performing similar functions, and effected by our Board of Directors to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. A company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
A material weakness is a control deficiency or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As a company with limited accounting resources, a significant amount of management’s time and attention has been and will be diverted from our business to ensure compliance with these regulatory requirements.
We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies.
As previously reported, management, including our CEO and CFO, conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control - Integrated Framework” (2013). Management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025, based on those criteria.
The material weakness in internal control over financial reporting identified was related to controls over the classification and technical accounting review of significant, one-time accounting transactions.
Management continues to take steps to remediate the material weakness described above and has implemented the following control enhancement:
| ● | Implemented an added layer of technical review by an internal financial reporting director for one-time significant entries to ensure appropriate classification is assessed. |
| ● | Hired additional third-party accounting consultants to assist with accounting treatment, controls design, reconciliation and close procedures, and financial disclosures. |
Management will consider the material weakness to be fully remediated once the controls have been operating effectively for sufficient contiguous reporting periods, and after management has validated the effective operation of the controls through testing.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2026, management evaluated the Company’s internal control over financial reporting in connection with the Company’s strategic transition and concluded that there were several changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, which are each described below.
Management implemented a new ERP system, NetSuite, in the fourth quarter of 2025. Management also integrated a number of automated systems into the ERP system to improve internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be a party to litigation that arises in the ordinary course of our business; however, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us.
Prior litigation and other legal proceedings which have now been settled are described in, and incorporated by reference in, this “Item 1. Legal Proceedings” of this Form 10-Q from, “Part I – Item 1. Financial Statements” in the Notes to Condensed Consolidated Financial Statements in “Note 12 – Commitments and Contingences”, under the heading Legal Proceedings and Settlements.
Item 1A. Risk Factors.
Except as discussed below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report, under the heading “Risk Factors”, and investors should review the risks provided herein and in the Annual Report, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, under “Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial conditions and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
The risk factors below which we have marked with an asterisk (*) reflect substantive changes from, or additions to, the risks described in the Annual Report.
If we make acquisitions, they may disrupt or have a negative impact on our business.*
If we make acquisitions in the future, funding permitting, which may not be available on favorable terms, if at all, we could have difficulty integrating the acquired company’s assets, personnel and operations with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:
| ● | the difficulty of integrating acquired products, services or operations; |
| ● | the potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies; |
| ● | difficulties in maintaining uniform standards, controls, procedures and policies; |
| ● | the potential impairment of relationships with employees and customers as a result of any integration of new management personnel; |
| ● | the potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers; |
| ● | the effect of any government regulations which relate to the business acquired; |
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| ● | potential unknown liabilities associated with acquired businesses or product lines, or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition; and |
| ● | potential expenses under the labor, environmental and other laws of various jurisdictions. |
Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition, many of which cannot be presently identified. These risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.
We are considering a number of strategic alternatives, which could have an adverse impact on our business or the price of our Common Stock.*
We are considering a number of strategic alternatives focused on maximizing shareholder value. These strategic alternatives include, but are not limited to, an acquisition, merger, sale of the Company or material assets of the Company, strategic partnership, capital raise and a distribution of the Company’s capital and assets. There can be no assurance that this process will result in the approval or completion of any particular strategic alternative or transaction in the future, or that any such strategic alternative or transaction, if approved or completed, will yield additional shareholder value. The process of exploring, reviewing, and pursuing strategic alternatives, could involve significant risks to our operations, financial results and the price of our Common Stock, whether or not any such transaction is ultimately consummated. These risks include, among others:
| ● | diversion of our management’s attention from the operation of our business; |
| ● | significant transaction costs, including legal, financial advisor, accounting and other third-party fees and expenses, which may be incurred even if no transaction is consummated and which may not be recovered; |
| ● | dilution of our existing equity interests or a decrease in the value of our Common Stock; |
| ● | a change in control or a third party’s acquisition of a controlling stake in our business, which could trigger rights and remedies available to our contractual counterparties; |
| ● | restrictions on our ability to raise additional capital, incur indebtedness or otherwise control decisions regarding our operations and management; |
| ● | loss of, or inability to attract, retain or motivate, key management personnel and other employees, and deterioration of our relationships with our employees; |
| ● | disruption of, or adverse changes to, our relationships with customers, suppliers, contract counterparties and other stakeholders; |
| ● | negative publicity, market speculation, or harm to our reputation; and |
| ● | shareholder litigation and other legal proceedings, and the substantial costs associated with defending against such proceedings, that may arise in connection with the strategic review process or any resulting transaction. |
Any one or more of these factors or other risks could have a material adverse effect on our business, results of operations, financial condition or the trading price of our Common Stock.
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Our stock repurchases are discretionary and even if effected, they may not achieve the desired objectives.*
On August 22, 2025, the Board of Directors authorized and approved a stock repurchase program for up to $250.0 million of the outstanding shares of the Company’s common stock, which was amended on June 29, 2026, to extend and decrease the repurchase program. Subject to any future extension in the discretion of the Board of Directors, the repurchase program is scheduled to expire upon the earliest of (i) June 30, 2027, (ii) when a maximum of $100.0 million of the Company’s common stock has been repurchased or (iii) when such program is discontinued by the Board of Directors. Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. The program does not obligate the Company to acquire a minimum amount of shares. Since August 22, 2025, the Company has purchased an aggregate of 9,515,782 shares of common stock for $79.5 million, at an average purchase price of $8.45.
The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase a particular number of, or any, shares. There is no guarantee as to the exact number or value of shares that will be repurchased by the Company, if any.
There can be no assurance that any repurchases pursuant to our stock repurchase program will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchase such shares. The amounts and timing of the repurchases may also be influenced by general market conditions, regulatory developments (including recent legislative actions which, subject to certain conditions, may impose an excise tax of 1% on our stock repurchases) and the prevailing price and trading volumes of our common stock. If our financial condition deteriorates or we decide to use our cash for other purposes, we may suspend repurchase activity at any time.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
There have been no sales of unregistered securities during the quarter ended June 30, 2026 which have not previously been reported in a Current Report on Form 8-K.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table presents information regarding our repurchases of shares of our common stock on a monthly basis during the three months ended June 30, 2026:
| Period | Total Number of Shares Purchased (in thousands) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in thousands) | Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (in thousands) (1) | ||||||||||||
| April 1, 2026 – April 30, 2026 | 5,753,954 | $ | 4.68 | 5,753,954 | $ | |||||||||||
| May 1, 2026 – May 31, 2026 | 77,701 | $ | 4.28 | 77,701 | ||||||||||||
| June 1, 2026 – June 30, 2026 | 1,255,156 | $ | 5.12 | 1,255,156 | ||||||||||||
| Total | 7,086,811 | 7,086,811 | $ | |||||||||||||
| (1) | On August 22, 2025, the Board of Directors authorized and approved a stock repurchase program for up to $250.0 million of the currently outstanding shares of the Company’s common stock, which was amended on June 29, 2026, to extend and decrease the repurchase program. Subject to any future extension in the discretion of the Board of Directors, the repurchase program is scheduled to expire upon the earliest of (i) June 30, 2027, (ii) when a maximum of $100.0 million of the Company’s common stock has been repurchased, or (iii) when such program is discontinued by the Board of Directors. From October 1, 2025 to December 31, 2025, the Company repurchased an aggregate of 1,454,400 shares of common stock for $30,141,810 inclusive of fees, at an average price of $20.72 per share, which have been cancelled. |
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Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
| (c) | Rule 10b5-1 Trading Plans. Our directors and
executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended
to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange
Act. During the quarter ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) |
Item 6. Exhibits.
The following exhibits are filed herewith or incorporated by reference herein:
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| * | Filed herewith. |
| ** | Furnished herewith. |
| + | Management contract or compensatory plans or arrangements. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FORUM MARKETS, INCORPORATED | ||
| Date: August 14, 2026 | By: | /s/ McAndrew Rudisill |
| McAndrew Rudisill | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2026 | By: | /s/ John Saunders |
| John Saunders | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
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Exhibit 31.1
Certification of Chief Executive Officer
I, McAndrew Rudisill, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Forum Markets, Incorporated (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ McAndrew Rudisill | |
| McAndrew Rudisill | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
Certification of Principal Financial Officer
I, John Saunders, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Forum Markets, Incorporated (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ John Saunders | |
| John Saunders | |
|
Chief Financial Officer (Principal Financial/Accounting Officer) |
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of
The Sarbanes-Oxley Act of 2002
I, McAndrew Rudisill, certify, that, to my knowledge, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Forum Markets, Incorporated on Form 10-Q for the quarter ended June 30, 2026, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Forum Markets, Incorporated at the dates and for the periods indicated.
| Dated: August 14, 2026 | |
| /s/ McAndrew Rudisill | |
| McAndrew Rudisill | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
A signed original of this written statement required by Section 906 has been provided to Forum Markets, Incorporated and will be retained by Forum Markets, Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
Certification of Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
The Sarbanes-Oxley Act of 2002
I, John Saunders, certify, that, to my knowledge, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Forum Markets, Incorporated on Form 10-Q for the quarter ended June 30, 2026, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Forum Markets, Incorporated at the dates and for the periods indicated.
| Dated: August 14, 2026 | |
| /s/ John Saunders | |
| John Saunders | |
| Chief Financial Officer | |
| (Principal Financial/Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to Forum Markets, Incorporated and will be retained by Forum Markets, Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.