SkyAI swings to $84.9M profit in Q3 2026
Quarterly profit included a $90.5 million unrealized digital-commodity gain; SkyAI later liquidated its SOL holdings.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
SkyAI, Inc. reported net income of $84.9 million for the three months ended September 30, 2026, versus a net loss of $105.3 million in the comparable 2025 quarter; its nine-month net loss was $24.6 million, versus $99.8 million. Quarterly results included a $90.5 million unrealized gain on digital commodities. Staking revenue was $2.6 million for the quarter and $8.0 million for nine months, while nine-month net revenue was $192,780, versus $204,120.
At September 30, the company held 2,002,683 SOL valued at $231.4 million and used $9.1 million in operating cash during the nine-month period. In October 2026, it liquidated its SOL holdings for cash and USDC and liquidated substantially all stablecoin holdings. From January through September, it repurchased 1,851,553 shares at a cost of $3,112,399, excluding fees. Its medical-device segment consisted of sales and distribution, alongside its digital commodity treasury segment.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointQuarterly earnings swung to $84.9 million net income.
- Moderate pointStaking revenue reached $8.0 million for nine months, versus $2.2 million.
Negative
- Minor pointNine-month net revenue was $192,780, versus $204,120 in 2025.
Filing Explained
The 20-year related-party consulting contract has variable fees and specified early-termination cases that trigger payment of compensation through the term’s end.
This unaudited SkyAI Form 10-Q records warrant exercises that issued common shares, adding to the share base; common shares outstanding were 49,110,446 at
The company recorded pre-funded warrant exercises of 9,401,702 shares in the first quarter, 3,906,171 in the second, and 6,500,823 in the third; these warrants convert to shares when exercised.
Separately, the company’s consulting agreement with related party Sol Edge Limited has a 20-year term and, from
If SkyAI terminates the agreement during its term, or the consultant terminates it because of a material breach by the company, SkyAI must pay the fees and other compensation that would have accrued through the term’s end, in monthly payments.
Key Figures
Key Terms
unrealized gain on digital commodities financial
staking rewards technical
Account Equity financial
incremental borrowing rate financial
Level 1 inputs financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much net income did SKYA report for Q3 2026?
How much SOL did SKYA hold at September 30, 2026?
How are SKYA’s treasury consulting fees calculated?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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 November 2, 2026, shares of the registrant’s common stock, par value $ per share, were issued and outstanding.
TABLE OF CONTENTS
| PART I FINANCIAL INFORMATION | ||
| ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | |
| Condensed Consolidated Balance Sheets | F-1 | |
| Condensed Consolidated Statements of Operations | F-2 | |
| Condensed Consolidated Statement of Comprehensive Income (Loss) | F-3 | |
| Condensed Consolidated Statements of Stockholders’ Equity | F-4 | |
| Condensed Consolidated Statements of Cash Flows | F-6 | |
| Notes to the Condensed Consolidated Financial Statements | F-7 | |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 3 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 11 |
| ITEM 4. | CONTROLS AND PROCEDURES | 11 |
| PART II OTHER INFORMATION | ||
| ITEM 1. | LEGAL PROCEEDINGS | 12 |
| ITEM 1A. | RISK FACTORS | 12 |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 13 |
| ITEM 6. | EXHIBITS | 15 |
| SIGNATURES | 16 | |
| 2 |
Item 1. Financial Statements:
SKYAI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Payment stablecoin | ||||||||
| Accounts receivable – product trade | ||||||||
| Accounts receivable – digital currency, net | ||||||||
| Prepaid expenses – related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Inventories, net | ||||||||
| Total Current Assets | ||||||||
| Digital commodities, at fair value | ||||||||
| Fixed assets, net | ||||||||
| Right of use assets | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities: | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Margin loan | ||||||||
| Warrant liability | ||||||||
| Current portion of right of use liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Right of use liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding (2025: ) | ||||||||
| Common stock, $ par value; shares authorized; issued, outstanding at September 30, 2026 and issued and outstanding at December 31, 2025 | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost, and shares, respectively at September 30, 2026 and December 31, 2025 | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-1 |
SKYAI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Cost of goods – inventory reserve | ||||||||||||||||
| Total cost of goods sold | ||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Staking Revenue, net | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Warrant issuance - related party | ||||||||||||||||
| Consulting fees – related party | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Unrealized gain on digital commodities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Realized loss (gain) on digital commodities | ( | ) | ( | ) | ||||||||||||
| Digital commodity transaction expenses | ||||||||||||||||
| Total Operating Expenses | ( | ) | ||||||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense), net | ( | ) | ||||||||||||||
| Fair market value adjustment on warrants | ||||||||||||||||
| Other income (expense) | ( | ) | ||||||||||||||
| Derivative loss, net | ( | ) | ( | ) | ||||||||||||
| Other Income (Expense), net | ( | ) | ||||||||||||||
| Income (Loss) Before Provision for Taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Tax Provision | ||||||||||||||||
| Income (Loss) from Continuing Operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Discontinued Operations: | ||||||||||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||||||||||
| Income tax benefit | ||||||||||||||||
| Loss from Discontinued Operations | ( | ) | ( | ) | ||||||||||||
| Net Income (Loss) | $ | $ | ( | ) | $ | ( | ) | ( | ) | |||||||
| Income (loss) per share from Continuing Operations, basic and diluted | $ | $ | ) | $ | ) | $ | ) | |||||||||
| Loss per share from Discontinued Operations, basic and diluted | ) | ) | ||||||||||||||
| Net income (loss) per share, basic and diluted | $ | $ | ) | $ | ) | $ | ) | |||||||||
| Weighted average shares used to compute net income (loss) per share, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-2 |
SKYAI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||
| Comprehensive Income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
SKYAI, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||
| Balance – December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | | |||||||||||||||||||||||
| Net income for the three months ended March 31, 2025 | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Equity offering - January 2025 | - | |||||||||||||||||||||||||||||||
| Exercise of Series B warrants | - | ( | ) | |||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||
| Balance – March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net income for the three months ended June 30, 2025 | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Exercise of Series B warrants | - | ( | ) | |||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||
| Balance – June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Equity offering - August 2025 PIPE | - | |||||||||||||||||||||||||||||||
| Exercise of Series A warrants | - | |||||||||||||||||||||||||||||||
| Exercise of prefunded warrants | - | |||||||||||||||||||||||||||||||
| Shelf offering – ATM | - | |||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance – September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| F-4 |
SKYAI, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026
(Unaudited)
| Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance – December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2026 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share repurchase for treasury stock | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Exercise of prefunded warrants | - | - | ||||||||||||||||||||||||||||||||||||||
| Exercise of warrants - related party | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance – March 31, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2026 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share repurchase for treasury stock | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Exercise of prefunded warrants | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance – June 30, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Net income for the three months ended September 30, 2026 | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share repurchase for treasury stock | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Exercise of warrants – related party | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Exercise of prefunded warrants | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance – September 30, 2026 | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
SKYAI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: Loss from discontinued operations | ( | ) | ||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Warrant issuance – related party | ||||||||
| Stock-based compensation | ||||||||
| Accretion of debt discount | ||||||||
| Inventory reserve adjustment | ||||||||
| Fair market value adjustment for warrants | ( | ) | ( | ) | ||||
| Non-cash operating lease right of use assets | ||||||||
| Amortization of related party prepaid | ||||||||
| Digital commodities received as staking revenues, net | ( | ) | ( | ) | ||||
| Validator operating fees | ||||||||
| Realized loss (gain) on digital commodities | ( | ) | ||||||
| Realized loss on derivatives | ||||||||
| Unrealized gain on digital commodities | ( | ) | ( | ) | ||||
| Unrealized loss on derivatives | ||||||||
| Changes in operating assets: | ||||||||
| Accounts receivable – trade and digital | ( | ) | ( | ) | ||||
| Prepaid expenses and other | ( | ) | ||||||
| Operating lease right of use liabilities | ( | ) | ||||||
| Inventory | ||||||||
| Other assets | ( | ) | ||||||
| USDC purchased for vendor payments | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of digital assets | ( | ) | ||||||
| Purchase of and deposits paid for fixed assets | ( | ) | ||||||
| Sale of digital commodities | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net proceeds from offerings and warrant exercises | ||||||||
| Proceeds from margin loan | ||||||||
| Repayment of debt | ( | ) | ||||||
| Share repurchase program | ( | ) | ||||||
| Repayment of margin loan | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| NET INCREASE (DECREASE) IN CASH - CONTINUING OPERATIONS | ( | ) | ||||||
| CASH FLOWS FROM DISCONTINUED OPERATIONS | ||||||||
| Net cash used in operating activities - discontinued operations | ( | ) | ||||||
| Net cash used in investing activities - discontinued operations | ( | ) | ||||||
| Effect of Exchange Rate – discontinued operations | ||||||||
| NET DECREASE IN CASH - DISCONTINUED OPERATIONS | ( | ) | ||||||
| CASH — BEGINNING OF PERIOD | ||||||||
| CASH — END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Digital assets received from common stock issuance | $ | $ | ||||||
| USDC received from common stock issuance | $ | $ | ||||||
| Right-of-use assets obtained | $ | $ | ||||||
| USDC received from sale of SOL | $ | $ | ||||||
| USDC/T payment for operations | $ | ( | ) | $ | ||||
| Cash paid for interest | $ | $ | ||||||
| OID interest | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-6 |
SKYAI, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
Note 1. Description of Business
Nature of Business
SkyAI,
Inc. (“SkyAI” or the “Company”) was founded as a medical device company. On April 13, 2022, the Company’s
Initial Public Offering was deemed effective with trading commencing on April 14, 2022. The Company received net proceeds of $
On October 6, 2025, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company of certain assets, and a contract for the transfer of business share providing for the assignment by the Company of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, the Hungarian subsidiary, which is reflected in the accompanying financial statements as a discontinued operation. As of October 6, 2025, with the ownership transfer of Safegard Medical Kft complete, the Company discontinued all design and manufacturing to focus instead solely on marketing and distribution.
On August 24, 2025, the Company adopted a digital commodity treasury strategy focused on accumulating Solana (“SOL”), the native digital commodity of the Solana blockchain.
On May 26, 2026, the Company filed a Certificate of Amendment to its articles of incorporation to change the name of the Company to SkyAI, Inc. and effectuate the name change with the Nevada Secretary of State. On May 28, 2026, the Company’s common stock ceased trading under the ticker symbol “STSS” and began trading under the new ticker symbol “SKYA,” and its warrants ceased trading under the ticker symbol “STSSW” and began trading under the new ticker symbol “SKYAW.”
On May 27, 2026, the Company announced a strategic transformation of its business, reflecting a shift from its legacy operations to the development of a technology-driven financial platform and the establishment of an international operational headquarters in Hong Kong.
The accompanying condensed consolidated financial statements include the accounts of SkyAI, Inc. and its wholly owned subsidiaries, SOL Equity Limited (in Cayman Islands), and Axis Global Tech Limited (in Hong Kong), collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.
Note 2. Summary of Significant Accounting Policies
Significant accounting policies are described in the Company’s Form 10-K for the year ended December 31, 2025.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and are expressed in U.S. dollars.
These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should be read in conjunction with the audited Consolidated Financial Statements and the related notes included in the 2025 Annual Report. The condensed consolidated financial information as of December 31, 2025 included herein has been derived from the audited Condensed Consolidated Financial Statements in the 2025 Annual Report.
| F-7 |
In the opinion of management, these Condensed Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments, including eliminations of material intercompany accounts and transactions) considered necessary for a fair statement of the results presented herein. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.
Discontinued Operations
The Company accounts for discontinued operations in accordance with ASC 205-20. A discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. Discontinued operations are reported separately net of taxes for all periods presented from continuing operations in the condensed consolidated statements of income for all periods presented. Assets and liabilities of discontinued operations are presented separately for all periods presented in the condensed consolidated balance sheets. The Company provides additional disclosures in the notes, including major classes of assets and liabilities, results of operations, and cash flows related to discontinued operations. Unless otherwise indicated, the information in the notes to the condensed consolidated financial statements refers only to the Company’s continuing operations.
The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the condensed consolidated statements of operations. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Pre-funded and related party warrants exercisable for nominal consideration of $ per share are included in weighted average shares outstanding for basic EPS from their date of issuance. Basic EPS for the nine months ended September 30, 2026 included in outstanding pre-funded warrants and in outstanding related party warrants. The three months ended September 30, 2026 included in outstanding pre-funded warrants and in related party warrants. Basic EPS in the three and nine months ended September 30, 2025 included and in pre-funded warrants, respectively.
Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2026 and 2025, there were and , respectively, of stock options and warrants that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the periods presented.
Foreign Currency Translation/Transactions
The Company has determined that the functional currency for its Hungarian subsidiary (included in discontinued operations) is the local currency. For financial reporting purposes, assets and liabilities denominated in foreign currencies were translated at current exchange rates and profit and loss accounts are translated at weighted average exchange rates. Resulting translation gains and losses are included as a separate component of stockholders’ equity as accumulated other comprehensive income or loss.
| F-8 |
For the Company’s Hong Kong subsidiary Axis Global Tech Limited, the functional currency has been determined to be the U.S. dollar. Gains or losses resulting from transactions in other than the functional currency are recorded as foreign exchange gains and losses in the condensed consolidated statements of operations.
Cash and Cash Equivalents
The
Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date
of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. At September 30, 2026
and December 31, 2025, the Company had cash of $
Trade Receivable and Allowance for Credit Losses
Trade receivables from contracts with customers are recorded at invoiced amounts and do not bear interest. Because product revenue is currently concentrated in a limited number of customers, the Company measures expected credit losses under ASC 326 on an individual basis rather than a collective basis.
On
July 8, 2026, the Company and a trade customer agreed to a scheduled repayment plan with respect to the customer’s accounts receivable
balance outstanding at June 30, 2026, under which the balance is payable in thirteen installments through July 2027. The Company collected
$
The Company adopted the amendments in ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, effective January 1, 2026. The adoption did not have a material effect on the Company’s condensed consolidated financial statements.
Concentration of Credit Risk
The Company’s cash, USDC, certain digital commodities held, accounts receivable, and deposits are potentially subject to concentration of credit risk.
Cash
is primarily placed with financial institutions which are of high credit quality. The Company does have corporate deposit balances with
financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $
The Company holds USDC periodically as a liquidity resource facilitating transactions such as purchases, dispositions and payments. USDC is a payment stablecoin redeemable on a one-to-one basis for U.S. dollars and issued by Circle Internet Financial, LLC. (“Circle”). Circle’s underlying reserves were held in cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements within segregated accounts for the benefit of USDC holders. USDC is a current financial asset in the Condensed Consolidated Financial Statements.
The Company holds SOL, a digital commodity, as part of its treasury strategy. SOL is reported as a digital commodity in the Condensed Consolidated Financial Statements.
Classification of Digital Commodities & Payment Stablecoin
Management assessed SOL, USDC, & USDT under ASU 2023-08. For new asset classes that are out of ASU 2023-08’s scope, the Company considered the assets’ underlying characteristics within the GENIUS Act, ASC 825, and ASC 350 for assignment as a cash equivalent, financial or intangible asset respectively. The Company also evaluated if each new asset type should be presented as long-term or current under ASC 210.
| F-9 |
SOL meets the criteria of ASU 2023-08 and is considered an in-scope digital commodity. This is because it meets the definition of an intangible asset per the FASB codification, does not provide enforceable rights or claims to underlying goods, services, or other assets. Furthermore, SOL resides on a distributed ledger, is secured through cryptography, is fungible, and is not created or issued by the Company or its related parties.
Both USDC and USDT (“payment stablecoins”) provide the holder with enforceable rights to or claims on underlying goods, services or other assets. Therefore, they are not considered an in-scope crypto asset under ASU 2023-08, but instead the same factor meets the criteria as a financial asset under ASC 825.
Under the GENIUS Act, a payment stablecoin not issued by a permitted payment stablecoin issuer may not be treated as cash or a cash equivalent for accounting purposes; the Act is not yet effective. Management does not consider USDC or USDT to be cash equivalents under ASC 230 but, based on guidance under ASC 210, classifies payment stablecoins as current assets expected to be converted to cash within one year from the balance sheet date. The Company reports payment stablecoins as a current financial asset on the balance sheet adjusted to fair market value.
Digital Commodities
Pursuant to ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets: Accounting for and Disclosure of Crypto Assets, codified into ASC subtopic 350-60, in-scope crypto assets are required to be measured at fair value in the condensed consolidated balance sheet, with gains and losses from changes in the fair value of such digital commodities recognized in the condensed consolidated statement of operations each reporting period. Under ASU 2023-08 in-scope crypto assets are considered to be indefinite-lived intangible assets. The in-scope crypto assets are initially measured at cost based on existing GAAP guidance per ASC 350-30. ASU 2023-08 also requires certain interim and annual disclosures for digital commodities within the scope of the standard. Sales and purchases of digital commodities are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows.
The Company adopted this guidance effective August 25, 2025, the date of the Company’s first holding in digital commodities. SOL is measured using Level 1 inputs under ASC 820, based on quoted prices from the principal market unless otherwise restricted. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital commodities held by the Company are traded on a number of active markets globally. The Company determines Coinbase as its principal market. The Company recognizes staking revenue by utilizing daily prices obtained from Coinbase at the end of the treasury operations day at 5pm ET (“Spot Price”). These prices are independently analyzed, including comparisons to other exchanges and potential cut-off times.
Sensitivity to market risk
The
Company is exposed to SOL market risk related to our digital commodity holdings, which are impacted by the market value of the respective
digital commodity held. The Company performed a sensitivity analysis assuming a hypothetical 10% change in the fair value of these digital
commodities to demonstrate the potential impact on our financial results. A hypothetical 10% increase or decrease in market prices would
have positively or negatively impacted our Income (loss) before income taxes by approximately $
Acquisition of digital commodities
Per ASC 350-60-45-2, gains and losses from the remeasurement of digital commodities shall be included in net income and presented separately from changes in the carrying value of other intangible assets. Pursuant to this guidance, changes in fair value are reflected in the line items ‘Realized gain (loss) on digital commodities’ and ‘Unrealized gain (loss) on digital commodities’ in the operations section of the condensed consolidated statements of operations. Changes in fair value are measured as the difference between the cost basis and the prevailing market price of the digital commodity at the date of measurement, multiplied by the quantity held of the digital commodity.
| F-10 |
The Company is authorized to enter into derivative positions. For any open derivative positions, the Custodians provide a period-end spot price for the open positions based on valuation models applied based on various inputs.
Remeasurement on a recurring basis
Subsequent to the acquisitions of SOL, remeasurement of change in fair value is done by taking the spot price as defined above on the last day of the period. Tokens are bifurcated between liquid and locked tokens. In the case of liquid tokens, the aggregate fair value is computed by taking the number of liquid tokens and multiplying by the period-end spot price. In the case of locked tokens, the aggregate fair value is computed by taking the number of locked tokens, discounted by the appropriate percentage, which as of December 31, 2025 was 10% and as of September 30, 2026 was 9.75%. As locked tokens become unlocked over time, they are added to the count of liquid tokens and accordingly, make up less of that discount percentage over time when computing aggregate fair value on locked tokens. Management considers this a Level 2 input and monitors this discount percentage adjusting when appropriate.
Staking revenue
The Company earns staking rewards by delegating our digital commodities to third-party validators on proof-of-stake blockchain networks. These tokens remain under the Company’s control and are not derecognized, as the delegation does not constitute a transfer of control under ASC 610-20 or ASC 350-60.
While there is no explicit guidance under U.S. GAAP for staking activities, the Company applies the principles of ASC 606, Revenue from Contracts with Customers, by analogy. Management evaluates whether a contract exists, identifies the performance obligations, and determines whether the Company acts as a principal or agent in the transaction. The transaction price is measured at the fair value of the digital commodities received at the time control is obtained Changes in protocol rules or accounting interpretations may materially impact how staking revenue is recognized and measured. SOL tokens held by the Company, whether liquid or locked, are eligible for staking. The Company has determined that it is the delegator and the custodians, directly or via agreements, are the validators. Therefore, the Company recognizes the staking rewards on a net basis unless it is the validator.
The Company recognizes revenue from staking rewards as the rewards are earned. Rewards are earned at the end of each epoch (just under two day periods for SOL); rewards earned but not yet received at period end are recorded in Accounts receivable – digital commodities, net. This revenue is reported in the Statements of consolidated statement of operations under the line item “Staking Revenue.”
The Company staked substantially all of its SOL treasury during the period ended September 30, 2026. The Company maintains control over the delegated SOL tokens throughout the staking period. Although the tokens undergo a bonding process with validators, the Company retains the ability to initiate unbonding at any time for liquid SOL. The validators cannot sell, pledge, or otherwise dispose of the tokens. As such, the Company continues to recognize the delegated SOL tokens as part of its digital commodity holdings.
Realized disposition of the digital commodities
When digital commodities are disposed, realized gains or (losses) are recorded for the difference between the price at disposition and its cost. For sales of digital commodities, this would be the net transaction price. All sales of Solana are made from wallets and with tokens that were specifically identified, including their cost basis, prior to disposition.
Software Development Costs
The Company accounts for costs incurred in developing software for internal use in accordance with ASC 350-40. Costs incurred during the preliminary project stage are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management with the relevant authority has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Costs of training, data conversion, and maintenance are expensed as incurred.
| F-11 |
The
Company’s software development activities were in the preliminary project stage at September 30, 2026. Accordingly,
Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees related to contingencies are expensed as incurred. Gain contingencies are not recognized until the gain is realizable or realized.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) and in January 2025 issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The new guidance requires disaggregated information about the entity’s type of expenses into certain categories. As clarified by ASU 2025-01, the guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt the annual disclosure requirements in its Annual Report on Form 10-K for the year ending December 31, 2027, and the interim disclosure requirements beginning with its Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2028. The Company is evaluating the impact of the new guidance on its disclosures within the condensed consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance removes the references to software development project stages in Subtopic 350-40 and instead requires capitalization to begin when management with the relevant authority has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization is deferred while significant uncertainty exists regarding the development activities of the software, such as novel or unproven functions or technologies, or significant performance requirements that have not been identified or continue to be substantially revised. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and may be applied on a prospective, modified prospective, or retrospective basis. Early adoption is permitted as of the beginning of an annual reporting period. The Company continues to monitor the effect of the new guidance on its software development activities.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the scope, form and content, and disclosure requirements of interim reporting, and adds a disclosure principle requiring disclosure of events occurring after the most recent annual reporting period that have a material impact on the entity. For public business entities, the guidance is effective for interim reporting periods in fiscal years beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt the new guidance beginning with its Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2028. The Company is evaluating the impact of the new guidance on its interim disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes technical corrections and clarifications across a range of Topics. Among other matters, the amendments clarify the calculation of diluted earnings per share when an entity has a loss from continuing operations and the methods permitted to account for treasury stock retirements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments relating to diluted earnings per share are applied retrospectively. The Company expects to adopt the new guidance beginning with its Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2027. The Company is evaluating the impact of the new guidance on its condensed consolidated financial statements and disclosures.
| F-12 |
Reclassification of Prior Period Presentation
Certain prior period amounts have been reclassified to conform to the current period presentation.
Note 3. Prepaid Expenses and Current Assets
Prepaid expenses and other current assets consisted of the following at September 30, 2026 and December 31, 2025:
September 30, 2026 | December 31, 2025 | |||||||
| Insurance | $ | $ | ||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Note 4. Inventories
Inventories,
net of reserves of $
September 30, 2026 | December 31, 2025 | |||||||
| Finished goods | $ | $ | ||||||
Note 5. Fixed Assets
Fixed assets, net, as of September 30, 2026 and December 31, 2025, are summarized as follows:
September 30, 2026 | December 31, 2025 | |||||||
| Computer systems, website and other | $ | $ | ||||||
| Less: accumulated depreciation | $ | ( | ) | ( | ) | |||
| Fixed assets, net | $ | $ | ||||||
Depreciation
expense for the nine months ended September 30, 2026 and 2025 was $
Note 6. - Investments in Digital Commodities and Derivatives
The following table summarizes digital commodities held for investment:
| September 30, 2026 | ||||||||||||
| Units | Cost Basis | Fair Value | ||||||||||
| SOL | $ | $ | ||||||||||
| December 31, 2025 | ||||||||||||
| Units | Cost Basis | Fair Value | ||||||||||
| SOL | $ | $ | ||||||||||
The Company recognizes digital commodities at fair value.
| F-13 |
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| Digital Commodity Units | SOL | Cost Basis $ USD | Realized Loss | Selling Price Per Unit | Cost Basis Per Unit | |||||||||||||||
| Beginning digital commodities | $ | |||||||||||||||||||
| Dispositions of digital commodities | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||
| Staking rewards received | $ | |||||||||||||||||||
| Rebate and rewards receivable less fees paid | $ | |||||||||||||||||||
| Ending Digital Commodities | $ | |||||||||||||||||||
| Unrealized loss | $ | ( | ) | |||||||||||||||||
| Ending Digital Commodities | $ | |||||||||||||||||||
The following table summarizes the composition of SOL held broken out by liquid and locked as of September 30, 2026 and December 31, 2025:
| Number of SOL units | September 30, 2026 | December 31, 2025 | ||||||
| Liquid SOL | ||||||||
| Locked SOL | ||||||||
| Total | ||||||||
The following table summarizes the unlocking schedule of SOL tokens locked as of September 30, 2026 and December 31, 2025:
| Locked SOL Maturity | September 30, 2026 | December 31, 2025 | ||||||
| Through Year End 2026 | ||||||||
| Through Year End 2027 | ||||||||
| Through Year End 2028 | ||||||||
| Total | ||||||||
During 2025, the Company’s derivatives were all embedded forward contracts to receive or deliver a fixed amount of crypto assets in the future and none were designated as hedging instruments.
The following table summarizes information on derivative instruments by their location in the Condensed Consolidated Statement of Operations, as measured in U.S. dollar equivalents:
| September 30, 2025 | ||||||||||||
Purchased Derivatives | Written Derivatives | Total | ||||||||||
| Realized Gain / (Loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Unrealized Gain / (Loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Total | $ | ( | ) | $ | $ | ( | ) | |||||
The
margin loan of $
All holdings of SOL and substantially all stablecoin were liquidated after quarter end. See note 18.
| F-14 |
Note 7. Debt Financing
On
September 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) and a
Senior Secured Note (the “Note”) for an aggregate principal amount of $
Note 8. Stockholders’ Equity
Capital Structure
On December 11, 2017, the Company was incorporated in Wyoming with shares of common stock authorized with a $ par value. Effective April 18, 2019, the Company’s authorized common stock was increased to shares of common stock. The articles of incorporation also authorized preferred shares with a $ par value.
Effective
March 22, 2022, the Company completed a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps
Nevada”).
In July 2024, the shareholders approved the increase of the authorized common stock from to shares, which was subsequently filed as an amendment to the articles of incorporation with the state of Nevada.
On
October 7, 2024, at a special meeting of shareholders, the shareholders approved a proposal to authorize the Company’s Board of
Directors in its sole and absolute discretion, to file a certificate of amendment (the “Amendment”) to the Company’s
amended and restated certificate of incorporation to effect the reverse split at a ratio to be determined by the Board, not to exceed
a
On August 22, 2025, at the annual meeting of shareholders, the shareholders approved a proposal to authorize the Company’s Board of Directors in its sole and absolute discretion, to file a certificate of amendment (the “Amendment”) to the Company’s’ amended and restated certificate of incorporation to increase the authorized shares of common stock from shares to shares.
| F-15 |
Common Stock
Securities Purchase Agreements
On
August 25, 2025, the Company entered into securities purchase agreements (the “Cash Securities Purchase Agreements”) with
certain accredited investors (the “Cash Purchasers”) pursuant to which the Company sold to the Cash Purchasers in a private
placement offering (the “Cash Offering”) an aggregate offering of (i) “Cash Shares”) of common stock
of the Company, par value $ per share (the “Common Stock”), at an offering price of $ per share (ii) and
pre-funded warrants (the “Cash Pre-Funded Warrants”) to purchase shares of Common Stock (the “Cash Pre-Funded Warrant
Shares,”) at an offering price of $ per Pre-Funded Warrant, and (ii) stapled warrants (the “Cash Stapled Warrants,”
and together with the Common Stock and Cash Pre-Funded Warrants, the “Cash Securities”) to purchase shares of
Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $
Each
of the Cash Pre-Funded Warrants is immediately exercisable for one share of Common Stock at the exercise price of $
On
August 25, 2025, the Company also entered into securities purchase agreements (the “Cryptocurrency Securities Purchase
Agreements,” and together with the Cash Securities Purchase Agreements, the “Securities Purchase Agreements”) with
certain accredited investors (the “Cryptocurrency Purchasers,” and together with the Cash Purchasers, the
“Purchasers”) pursuant to which the Company sold and issued to the Cryptocurrency Purchasers in a private placement
offering (the “Cryptocurrency Offering” and together with the Cash Offering, the “Offerings”) (i)
pre-funded warrants (the “Cryptocurrency Pre-Funded Warrants” and together with the Cash Pre-Funded Warrants, the
“Pre-Funded Warrants”) to purchase shares of Common Stock (the “Cryptocurrency Pre-Funded Warrant Shares,”
and together with the Cash Pre-Funded Warrant Share, the “Pre-Funded Warrant Shares”) at an offering price of $
per Pre-Funded Warrant, and (ii)
stapled warrants (the “Cryptocurrency Stapled Warrants,” and together with the Cash Stapled Warrants, the “Stapled
Warrants” to purchase shares of Common Stock (the “Cryptocurrency Stapled Warrant Shares,” and together with the
Cash Stapled Warrant Share, the “Stapled Warrant Shares”) at an exercise price of $
per Cryptocurrency Stapled Warrant. In the Cryptocurrency Offering, the Cryptocurrency Purchasers will tender either Unlocked SOL
tokens or Locked SOL tokens to the Company as consideration for the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled
Warrants. The exercise of the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled Warrants into Cryptocurrency Pre-Funded
Warrant Shares and Cryptocurrency Stapled Warrant Shares, respectively, was subject to stockholder approval (“Stockholder
Approval”) which was approved at the Special Shareholder meeting on October 14, 2025. Each of the Cryptocurrency Pre-Funded
Warrants is exercisable for one share of Common Stock at the exercise price of $
| F-16 |
The
gross proceeds from the Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements aggregated $
On September 26, 2025, the Company entered into Waiver and Consent (the “Waiver and Consent”) with certain holders of the Company’s securities (who collectively beneficially owned at least 50.1% of the then outstanding Registrable Securities, as defined in the Registration Rights Agreement dated August 25, 2025 (the “Registration Rights Agreement”). The Waiver and Consent waived the compliance of the September 29, 2025 filing date and extended the deadline for the Company to file the initial resale registration statement with the Securities and Exchange Commission to the 60th calendar day following the Closing Date, as defined in the Registration Rights Agreement. The initial resale registration statement was filed on October 23, 2025. The final prospectus was filed on January 8, 2026.
Controlled Equity Offering
On
September 2, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each
of Cantor Fitzgerald & Co. (“Cantor”) and Aegis Capital Corp. (“Aegis”) (each, an “Agent” and
together, the “Agents”), pursuant to which the Company, from time to time, at its option may offer and sell shares (the “ATM
Shares”) of its Common Stock, to or through Cantor, acting as principal and/or the sole designated sales agent having an aggregate
sales price of up to $
The Common Stock to be sold under the Sales Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-274146), which was filed with the SEC on August 22, 2023, as amended on August 29, 2023 and declared effective by the SEC on September 5, 2023 and a registration statement on Form S-3 (File No. 333-289980) filed pursuant to Rule 462(b) under the Securities Act for the purpose of registering additional securities available to be sold under the registration statement on Form S-3 (File No. 333-274146) (collectively, the “Registration Statement”), including a base prospectus as part of the Registration Statement, and a prospectus supplement dated September 2, 2025 relating to the offer and sale of the ATM Shares pursuant to the Sales Agreement.
During
the year ended December 31, 2025, the Company issued approximately M shares of common stock under the Sales Agreement and received
net proceeds from the Sales Offering of approximately $
January 2025 Offering
On
January 29, 2025, the Company closed on an offering (the “2025 Offering”) and received gross proceeds of approximately $
| F-17 |
The
2025 Offering consisted of (pre-reverse – ) units consisting of (pre-reverse – ) Common
Units with gross proceeds of $
The
Pre-Funded Warrants were immediately exercisable and could be exercised at any time until exercised in full. Immediately after closing
The 2025 Offering was made pursuant to an effective registration statement on Form S-1 (No. 333-284237) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on January 27, 2025.
The
2025 Series A Warrants are exercisable immediately and expire 60 months after stockholder approval. The 2025 Series B Warrants are exercisable
immediately and expire 30 months after stockholder approval. The exercise price of the 2025 Series A and B Warrants, were adjusted down
to $
On
August 25, 2025, the Company entered into an amendment (the “Series A Amendment”) with certain warrant holders which references
the Series A Warrants (the “Existing Warrants”) in the amount of shares of Common Stock, reflective of the reverse
stock split, underlying the Existing Warrants. Pursuant to the Series A Amendment, the holders of the Existing Warrants agreed to reduce
the exercise price of their Existing Warrants from $
Warrants
| a) | In
connection with the strategic advisory consulting agreement entered into on August 28, 2025, with Sol Markets (related party), a
Cayman Islands exempt company, the Company issued warrants to purchase | |
| b) | The Company allocated the proceeds of the January 2025 Offering based on the fair values for the Series A, Series B warrants and Prefunded Warrants. The Company determined the fair value of the Series A and Series B warrants at the Offering date using the Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity shares in the warrant agreements. The fair value of the Prefunded warrants, also recorded as liability, was based on market price of the common shares. | |
| As
a result of the August 2025 Series A Amendment, the outstanding |
| F-18 |
Share Repurchase Program
On
October 2, 2025, the Board of Directors of the Company approved a share repurchase program (the “2025 Repurchase Program”)
providing for the repurchase of up to $
In connection with the 2025 Repurchase Program, on October 6, 2025, the Company entered into an Open Market Share Repurchase Agreement (the “Repurchase Agreement”) with Cantor Fitzgerald (the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase shares of Common Stock in the open market pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The Repurchase Agreement will continue in effect until terminated by either the Company or the Broker, with or without cause, upon written notice to the other party. The Company will pay Broker a commission at a rate of $ for each share of Common Stock repurchased pursuant to the Repurchase Agreement.
Pursuant to the 2025 Repurchase Program, from January to September 2026, the Company repurchased a total of shares of its common stock at a cost of $, not including fees of $.
Stockholder Rights Plan
On May 13, 2026, the Board of Directors (the “Board”) of the Company:
| ● | adopted a limited duration stockholder rights plan (the “Rights Plan”), the terms of which are set forth in a Rights Agreement entered into between the Company and VStock Transfer, LLC, as rights agent (the “Rights Agent”) dated May 14, 2026; and | |
| ● | pursuant to the Rights Plan, authorized and declared a dividend to stockholders of record at the close of business on May 26, 2026 (the “Record Date”) of one preferred share purchase right (each, a “Right”) for each outstanding share of the Company’s common stock, par value $ (“Common Stock”), held by such stockholders. |
The
Rights Plan is similar to other rights plans adopted by publicly held companies. Generally, under the Rights Plan,
| F-19 |
Note 9. Preferred Stock
On
July 15, 2025, the Company executed a Subscription and Investment Agreement (the “Subscription Agreement”) with Paul Danner
(“Subscriber”),
Note 10. Warrants
The warrants that are accounted for as liabilities in accordance with ASC 815-40, are presented as a Warrant liability in the accompanying condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the condensed consolidated statement of operations.
The Warrant liability at September 30, 2026 and December 31, 2025 consists of the following:
| September 30, 2026 | December 31, 2025 | |||||||
| Trading and Overallotment Warrants | $ | $ | ||||||
| Note Warrants | ||||||||
| Offering Warrants – May 2024 | ||||||||
| Offering Warrants – January 2025 – Series B | ||||||||
| Total Warrant Liability | $ | $ | ||||||
The Warrants outstanding at September 30, 2026 and December 31, 2025, were as follows:
| September 30, 2026 | December 31, 2025 | |||||||
| Trading and Overallotment Warrants | ||||||||
| Note Warrants | ||||||||
| Offering Warrants – May 2024 | ||||||||
| Offering Warrants -January 2025 -Series A | ||||||||
| Offering Warrants – January 2025 – Series B | ||||||||
| Prefunded – cash and in kind | ||||||||
| Cash and stapled warrants | ||||||||
| Warrants issued to strategic advisor | ||||||||
| Warrants issued for services arrangement | ||||||||
| Total Warrants Outstanding | ||||||||
On August 22, 2025, the shareholders approved the Company’s Equity Incentive Plan (the “2025 Plan”), to provide for the issuance of up to options and/or shares of restricted stock be available for issuance to officers, directors, employees and consultants.
In August 2025, stock options were granted to directors, executives and other employees and consultants with an exercise price of $, a term of years and vesting % upon grant and the remainder 25% per quarter over the following nine months. Also in August 2025, options were granted to former employees and directors with immediate vesting and a term of years. In October 2025, an additional options were granted to a director and certain employees with a term of years and vesting % upon grant and the remainder 25% per quarter over the following nine months. The above options to purchase shares of the Company’s common stock, par value $per share, which were granted pursuant to the Company’s 2025 Equity Incentive Plan, have grant prices based on the closing price on the respective grant dates.
| F-20 |
| Options | Weighted Average Exercise Price | Weighted Average Remaining Life | ||||||||||
| Outstanding at beginning of period | $ | |||||||||||
| Granted | - | |||||||||||
| Forfeited/cancelled | ( | ) | ||||||||||
| Outstanding at end of period | $ | |||||||||||
| Exercisable at end of period | $ | |||||||||||
For the nine months ended September 30, 2026 and 2025, the Company recognized stock-based compensation expense of $ and $, respectively, which was recorded in general and administrative expense.
For the three months ended September 30, 2026 and 2025, the Company recognized stock-based compensation expense of $ and $, respectively, which was recorded in general and administrative expense.
As of September 30, 2026 and December 31, 2025, there was $ and $, respectively, of unrecognized stock-based compensation related to unvested stock options. All stock options outstanding were fully vested as of September 30, 2026, and no further compensation expense is expected to be recognized for these awards.
At September 30, 2026, all of the stock options outstanding have exercise prices that exceed the market price at September 30, 2026 and as such, no intrinsic value exists. Intrinsic value is defined as the difference between the exercise price of the options and the market price of the Company’s common stock.
Note 12. Income Taxes
At
the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This
estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods.
Accordingly, the Company’s effective tax rate for the nine months ended September 30, 2026 and 2025 was
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has concluded OBBBA will have an immaterial impact on its income tax provision.
As
of September 30, 2026 and December 31, 2025, the liability for uncertain tax positions is
Note 13. Related Party Transactions and Balances
As
of September 30, 2026 and December 31, 2025, accounts payable and accrued liabilities include $
| F-21 |
In
connection with a strategic advisory agreement entered into on August 28, 2025, with Sol Markets, (the “Strategic Advisor”),
the Company issued warrants to purchase
The Consultant and Strategic Advisor are wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and Director.
Note 14. Fair Value Measurements
As of September 30, 2026, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| USDC | ||||||||||||||||
| USDT | ||||||||||||||||
| Digital commodities | ||||||||||||||||
| Digital commodities, Locked SOL | ||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liability | ||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | ||||||||||||
As of December 31, 2025, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| USDC | ||||||||||||||||
| USDT | ||||||||||||||||
| Digital commodities | ||||||||||||||||
| Digital commodities, Locked SOL | ||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liability | ||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | ||||||||||||
| F-22 |
Note 15. Commitments and Contingencies
Contingencies
At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.
Consulting Agreement
Effective
August 28, 2025 (“Effective Date”),
Based on terms of the Consulting Agreement, the Company transferred to the Consultant stablecoin
valued at $
The Consulting Agreement commenced on the Effective Date and shall continue in full force and effect for a term of 20 years (the “Term”), unless earlier terminated in accordance with Section 13(c). Thereafter, the Consulting Agreement may be renewed for additional periods as mutually agreed in writing by the Parties. If the Consulting Agreement is terminated by the Company for any reason during the Term, or if the Consultant terminates the Consulting Agreement due to a material breach by the Company, the Company shall pay to the Consultant, as liquidated damages and not as a penalty, an amount equal to all fees and other compensation that would have accrued to the Consultant under the Agreement from the date of termination through the end of the Term, paid monthly throughout the Term in accordance with the payment provisions herein.
The Consultant is wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and Director.
Leases
On
January 10, 2026, the Company executed a lease for a
Effective
May 2, 2026, the Company leased a
The
Company evaluated the Shenzhen and Hong Kong leases under ASC 842 and determined that both leases are operating leases. The rate implicit
in each lease was not readily determinable. Accordingly, the Company used its incremental borrowing rate based on information available
at lease commencement. The selected incremental borrowing rates were
The
Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of fixed lease payments
over the applicable lease term. Fixed lease payments included in the measurement of lease liabilities exclude refundable deposits, VAT,
utilities, property management fees, and other non-lease or variable components. Cash paid for amounts included in the measurement of
operating lease liabilities was $
| Maturity period | Amount | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total undiscounted payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
| F-23 |
Note 16. Segment Reporting
The
Company determines operating segments based on metrics that our Chief Operating Decision Makers (“CODM”) review internally
to manage our business, including resource allocation and performance assessment. In August 2025, as a result of the new treasury strategy,
management re-evaluated the segment reporting structure and determined that the Company operates in
Medical Device: This segment is responsible for executing and managing the Company’s medical device sales and distribution business.
Digital Commodity Treasury: This segment is responsible for executing and managing the Company’s digital treasury platform. In October 2026, the Company liquidated its holdings of Solana for Cash and USDC (See Note 18 Subsequent Events).
The CODM uses segment operating income (loss) to evaluate operating segment performance and allocate resources. The Company does not prepare separate balance sheets by operating segment for the CODM, as assets are not evaluated as part of operating segment performance and resource allocation.
Transactions between segments are reported as if each were a stand-alone business and are eliminated in consolidation. The Company ceased manufacturing operations in October 2025. Accordingly, for the three and nine months ended September 30, 2026 the Medical Device segment includes only the continuing sales and distribution business.
Certain payroll, consultant, and other selling, general and administrative expenses were allocated to the segment that they support, with the remaining expenses allocated to corporate.
The following table presents the Company’s segment results (unaudited) for the nine months and three months ended September 30, 2026 and 2025:
NINE MONTHS ENDED SEPTEMBER 30, 2026 | NINE MONTHS ENDED SEPTEMBER 30, 2025 | |||||||||||||||||||||||||||||||
Medical Device | Digital Asset Treasury | Corporate | Consolidated | Medical Device | Digital Asset Treasury | Corporate | Consolidated | |||||||||||||||||||||||||
| Net Revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||||||||
| Cost of goods sold - inventory reserve | ||||||||||||||||||||||||||||||||
| Total Cost of Goods Sold | ||||||||||||||||||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Staking Revenue, net | ||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||
| Warrant issuance – related party | ||||||||||||||||||||||||||||||||
| Consulting fees – related party | ||||||||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||||||||
| Unrealized gain on digital commodities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Realized (gain) loss on digital commodities | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Digital commodity transaction expenses | ||||||||||||||||||||||||||||||||
| Total Operating Expenses | ( | ) | ||||||||||||||||||||||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Fair market value adjustment on warrants | ||||||||||||||||||||||||||||||||
| Foreign currency and other | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Derivative loss, net | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Total Other Income (Expense) | ( | ) | ||||||||||||||||||||||||||||||
| Income (Loss) Before Provision for Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Tax Provision | ||||||||||||||||||||||||||||||||
| Income (Loss) from Continuing Operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||
| F-24 |
THREE MONTHS ENDED SEPTEMBER 30, 2026 | THREE MONTHS ENDED SEPTEMBER 30, 2025 | |||||||||||||||||||||||||||||||
Medical Device | Digital Asset Treasury | Corporate | Consolidated | Medical Device | Digital Asset Treasury | Corporate | Consolidated | |||||||||||||||||||||||||
| Net Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||||||||
| Cost of goods sold - inventory reserve | ||||||||||||||||||||||||||||||||
| Total Cost of Goods Sold | ||||||||||||||||||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Staking Revenue, net | ||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||
| Warrant issuance – related party | ||||||||||||||||||||||||||||||||
| Consulting fees – related party | ||||||||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||||||||
| Unrealized gain on digital commodities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Realized (gain) loss on digital commodities | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Digital commodity transaction expenses | ||||||||||||||||||||||||||||||||
| Total Operating Expenses | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||||||||
| Fair market value adjustment on warrants | ||||||||||||||||||||||||||||||||
| Foreign currency and other | ||||||||||||||||||||||||||||||||
| Derivative gain/(loss), net | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Income (Loss) from Continuing Operations | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||
The following table presents the total assets by segment (unaudited) at September 30, 2026 and December 31, 2025:
| September 30, 2026 | DECEMBER 31, 2025 | |||||||||||||||||||||||||||||
Medical Device | Digital Commodities | Corporate | Consolidated | Medical Device | Digital Commodities | Corporate | Consolidated | |||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Note: Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations.
Note 17. Discontinued Operations
On October 6, 2025, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company of certain assets, and a contract for the transfer of business share providing for the assignment by the Company of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, the Hungarian subsidiary, which is reflected in the accompanying financial statements as a discontinued operation.
| F-25 |
Loss from discontinued operations for the three and nine months ended September 30, 2025 was as follows:
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||
SEPTEMBER 30, 2025 | SEPTEMBER 30, 2025 | |||||||
| NET REVENUE (LOSS ) | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Cost of goods sold - inventory reserve | ||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ||||
| OPERATING EXPENSES: | ||||||||
| Selling, general and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Fixed asset impairment | ||||||||
| Total Operating Expenses | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Foreign currency transaction loss and other | ||||||||
| Other Income (Expense), net | ||||||||
| Loss before income taxes (benefit) | ( | ) | ( | ) | ||||
| Income tax benefit | ||||||||
| Net Loss from Discontinued Operations | $ | ( | ) | $ | ( | ) | ||
There
were
Note 18. Subsequent Events
Self-Tender Offer
On
October 16, 2026, the Company commenced a cash tender offer (the “Offer”) to purchase up to
The
Offer is for up to shares of common stock,
| F-26 |
On October 29, 2026, the Company filed an amendment to its tender offer statement on Schedule TO. The amendment includes an amended Offer to Purchase and new Letters of Transmittal for the pre-funded warrants and stapled warrants. The Offer will expire at one minute after 11:59 p.m., New York City time, on November 12, 2026, unless further extended or earlier terminated. Under the amended Offer, the Company is offering to purchase, in cash:
| - | up
to shares of common stock, or | |
| - | up
to | |
| - | up
to | |
| - | up
to |
If
all securities sought are tendered, the Company will pay approximately $
The Company intends for its common stock to remain listed on the Nasdaq Capital Market and registered under the Securities Exchange Act of 1934 after the Offer.
Sale of Digital Assets
In
October 2026, the Company sold approximately
| F-27 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis summarizes the significant factors affecting the condensed consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to SkyAI, Inc.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
Overview
Since our inception in 2017 and through 2022, we devoted substantially all of our resources to the research and development of our safety syringe products. On April 13, 2022, the Company’s Initial Public Offering was deemed effective with trading commencing on April 14, 2022. The Company received net proceeds of $14.2 million on April 19, 2022.
Commencing in 2022, we started building inventory of syringe products. We commenced generating syringe revenues in 2025. In October 2025, we discontinued R&D and the manufacture of syringe products, and inventory marketed from that date was sourced from third-party manufacturers.
In August 2025, we adopted a digital commodity treasury strategy focused on accumulating Solana (“SOL”), the native digital commodity of the Solana blockchain. The Company earns staking rewards by delegating our digital commodities to third-party validators on proof-of-stake blockchain networks.
On May 27, 2026, the Company announced its name change, the change in its ticker symbols, and a strategic transformation of its business, reflecting a shift from its legacy operations to the development of a technology-driven financial platform. As part of its strategic transformation, the Company has established an international operational headquarters in Hong Kong to support strategic acquisitions, talent acquisition, and expansion efforts. The Company is now focused on building an agentic finance platform leveraging AI to aggregate and analyze content and data to enable users to better manage their assets.
For the three months ended September 30, 2026, we reported a net income of approximately $84.9 million, primarily resulting from unrealized gains on our Solana holdings of approximately $90.5 million. For the nine months ended September 30, 2026, we reported a net loss of approximately $24.6 million, primarily resulting from realized losses of approximately $17.5 million.
| 3 |
Our Medical Device segment has net revenues, cost of goods sold and gross margin/loss. We also have staking revenue from our Digital Commodities segment. Operating expenses include transaction expenses relating to digital commodity activities, research and development for our software under development and selling, general and administrative expenses related to both of our segments and our corporate office.
Following the transfer by the Company of certain assets, the Company is no longer engaged in medical device related research and development activities and is limiting its medical device activity to sales and distribution. The Company is now engaged in research and development for certain new products related to building an agentic finance platform (see Recent Developments).
We maintain a corporate office located in Melville, New York.
Recent Developments
Sale of Solana Holdings
In October 2026, we sold approximately 2.0 million Solana tokens for net proceeds of approximately $215 million. The realized loss on the tokens sold in October was approximately $163 million, of which $147 million had been recorded as unrealized as of September 30, 2026. We expect an additional loss of approximately $16 million will be recorded in the fourth quarter as a result of the sales.
Following the sale of its SOL holdings in October 2026, the Company is now focused on building an agentic finance platform leveraging AI to aggregate and analyze content and data to enable users to better manage their assets.
Self-Tender Offer
On October 16, 2026, we commenced a tender offer (the “Tender Offer”) which was subsequently amended on October 29, 2026, to purchase up to 48,311,489 shares of its common stock, par value $0.0001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Plan, by and between the Company and VStock Transfer LLC, as rights agent, and up to 5,137,615 cash pre-funded warrants issued pursuant to the securities purchase agreements entered into by the Company dated August 25, 2025 (“Cash Pre-Funded Warrants”), 10,463,001 pre-funded warrants issued pursuant to the cryptocurrency securities purchase agreements dated August 25, 2025 (“Cryptocurrency Pre-Funded Warrants” and together with the Cash Pre-Funded Warrants, the “Pre-Funded Warrants”), and 3,955,293 warrants issued on August 28, 2025 (“Strategic Warrants”), each at a purchase price of $3.00 per share (less $0.0001 in the case of the pre-funded warrants and strategic warrants) and 41,054,034 cash stapled warrants issued pursuant to securities purchase agreements entered into by the Company dated August 25, 2025 (“Cash Stapled Warrants”) and 22,159,638 cryptocurrency stapled warrants issued pursuant to securities purchase agreements entered into by the Company dated August 25, 2025 (“Cryptocurrency Stapled Warrants”), each at a purchase price of $0.17 per Stapled Warrant, which tender offer is set to expire on November 12, 2026, unless extended or withdrawn. Our Board of Directors determined that the Tender Offer was a prudent use of our existing cash available and other financial resources and delivered value to our shareholders.
Our Board of Directors has also determined that the cash tender offer was an appropriate mechanism to return capital to shareholders and warrant holders that were seeking liquidity under current market conditions while, at the same time, allowing shareholders and warrant holders who did not participate in the Tender Offer to share in a higher portion of our future potential. If all securities sought are tendered, the Company will pay approximately $214.3 million. The Company will pay for the securities purchased, and the related fees and expenses, from cash on hand. The Offer is not subject to a financing condition.
| 4 |
Tender Offer Support and Settlement Agreement
On October 27, 2026, the Company entered into a tender offer support and settlement agreement (the “Settlement Agreement”) with Bastion Trading Limited, a British Virgin Islands company and certain of its affiliates (together, “Bastion”, and the Company and Bastion together, the “Parties”).
Pursuant to the Settlement Agreement, the Company has agreed to amend the terms of the Tender Offer to (a) increase the maximum number of Cash Pre-Funded Warrants that may be tendered in the Tender Offer to equal 100% of the Cash Pre-Funded Warrants issued and outstanding; (b) increase the maximum number of Cryptocurrency Pre-Funded Warrants that may be tendered in the Tender Offer to equal 100% of the Cryptocurrency Pre-Funded Warrants issued and outstanding; (c) add cash stapled warrants as securities that may be tendered in the Tender Offer, with the amount that may be tendered in the Tender Offer equal to 100% of the cash stapled warrants issued and outstanding, with no minimum number required to be tendered as a condition to the Tender Offer, and with the cash stapled warrants to be offered in the Tender Offer at a price of $0.17 per stapled warrant; (d) add cryptocurrency stapled warrants as securities that may be tendered in the Tender Offer, with the amount that may be tendered in the Tender Offer equal to 100% of the cryptocurrency stapled warrants issued and outstanding, with no minimum number required to be tendered as a condition to the Tender Offer, and with the cryptocurrency stapled warrants to be offered in the Tender Offer at a price of $0.17 per stapled warrant, (e) extend the term of the Tender Offer until at least November 12, 2026, and (f) subject to applicable law, delete any provisions in the Schedule to Tender Offer Statement pertaining to the Tender Offer (as may be amended, the “Schedule TO”) related to a 30% withholding on payments for Non-U.S. Holders (“Withholding”), and, subject to applicable law, for the Company not make any such Withholding.
Pursuant to the terms of the Settlement Agreement, Bastion has agreed to tender all securities beneficially owned by Bastion as may be so tendered in the Tender Offer. Additionally, Bastion has agreed to customary standstill provisions a period of three years from the execution of the Settlement Agreement (the “Standstill Period”), during which time Bastion would not be permitted, without approval of the Board of Directors of the Company, from acquiring any of the Company’s securities, or selling or transferring any securities of the Company to any third parties which would knowingly cause such third party to beneficially own more than 5% of the Company (subject to limited exception), nominating directors, submitting shareholder proposals, soliciting proxies, seeking representation on the Board of Directors of the Company, or otherwise seeking to influence the management or policies of the Company, amongst other customary restrictions.
In addition, pursuant to the terms of the Settlement Agreement, the Parties have also agreed to a mutual non-disparagement agreement during the Standstill Period (subject to limited exceptions); an agreement by each of the Parties not to pursue any legal proceedings against the other party during the Standstill Period (subject to limited exceptions); and after payment for the shares tendered in the Tender Offer, an agreement of mutual release of claims by each of the Parties (subject to limited exceptions). The Parties have also agreed to a number of other covenants in connection with the Settlement Agreement, including an agreement by the Company not to alter certain terms of the Tender Offer without the approval of Bastion; an agreement by Bastion not to sell or transfer any securities of the Company beneficially owned by Bastion other than through tender in the Tender Offer until the earlier of the expiration of the Tender Offer or termination of the Settlement Agreement; an agreement by Bastion not to make any “block trades” of the Company’s shares of common stock for a specified period after the expiration of the Tender Offer, after which time the Company would receive a right of first refusal on any such block trades; and an agreement by Bastion during the Standstill Period to vote any voting securities of the Company beneficially held by Bastion in line with the Board’s recommendations of any proposals (other than any proposal regarding a change of control of the Company).
The Settlement Agreement contains customary representations, warranties, agreements and other provisions, including the reimbursement of certain expenses of Bastion. The Settlement Agreement shall automatically terminate under a number of circumstances, including if the Company terminates or withdraws the Tender Offer, the Company does not accept payment for any of the securities of Bastion tendered in the Tender Offer, the breach of certain covenants to the Settlement Agreement, a determination that the Withholding is required in connection with the Tender Offer following consultation with a third party advisor, or if the Company has not amended the Schedule TO within the time provided for under the Settlement Agreement. If not otherwise terminated in accordance with its terms, the Settlement Agreement will terminate on the expiration of the Standstill Period.
| 5 |
Critical Accounting Policies and Significant Judgments and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported revenues and expenses during the reported periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The fair market value adjustments related to investments in digital assets and warrants classified as liabilities, as well as inventory related adjustments, could impact the operating results in the reporting periods.
Summary of Significant Accounting Policies
Our significant accounting policies are described in Note 2 of the accompanying condensed consolidated financial statements and further discussed in our annual financial statements included in our annual report on Form 10-K for the year ended December 31, 2025.
Results of Operations
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net Revenue | $ | - | $ | 68,040 | $ | 192,780 | $ | 204,120 | ||||||||
| Cost of goods sold | - | 71,260 | 202,578 | 219,880 | ||||||||||||
| Cost of goods – inventory reserve | - | - | 284,228 | - | ||||||||||||
| Total cost of goods sold | - | 71,260 | 486,806 | 219,880 | ||||||||||||
| Gross Margin (Loss) | - | (3,220 | ) | (294,026 | ) | (15,760 | ) | |||||||||
| Staking Revenue, net | 2,551,013 | 2,205,423 | 8,008,669 | 2,205,423 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Warrant issuance - related party | - | 101,331,513 | - | 101,331,513 | ||||||||||||
| Consulting fees – related party | 2,112,524 | 892,458 | 7,112,523 | 892,458 | ||||||||||||
| Research and development | 626,800 | - | 1,047,055 | - | ||||||||||||
| Selling, general and administrative | 2,598,029 | 7,100,593 | 12,814,606 | 9,876,048 | ||||||||||||
| Unrealized gain on digital commodities | (90,525,120 | ) | (14,864,742 | ) | (6,188,567 | ) | (14,864,742 | ) | ||||||||
| Realized (gain) loss on digital commodities | 2,815,036 | (635,000 | ) | 17,531,835 | (635,000 | ) | ||||||||||
| Digital commodity transaction expenses | 71,700 | 810,861 | 200,208 | 810,861 | ||||||||||||
| Total Operating Expenses | (82,301,031 | ) | 94,635,683 | 32,517,660 | 97,411,138 | |||||||||||
| Income (Loss) from Operations | 84,852,044 | (92,433,480 | ) | (24,803,017 | ) | (95,221,475 | ) | |||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense), net | 49,148 | 68,488 | 135,932 | (461,551 | ) | |||||||||||
| Fair market value adjustment on warrants | 18,229 | 1,208,142 | 66,148 | 12,295,842 | ||||||||||||
| Derivative loss, net | - | (4,378,749 | ) | - | (4,378,749 | ) | ||||||||||
| Other expense | (6,329 | ) | - | (6,657 | ) | (13 | ) | |||||||||
| Other Income, net | 73,706 | (3,102,119 | ) | 208,737 | 7,455,529 | |||||||||||
| Income (Loss) Before Provision for Taxes | 84,925,750 | (95,535,599 | ) | (24,594,280 | ) | (87,765,946 | ) | |||||||||
| Tax Provision | - | - | - | - | ||||||||||||
| Income (Loss) from Continuing Operations | 84,925,750 | (95,535,599 | ) | (24,594,280 | ) | (87,765,946 | ) | |||||||||
| Discontinued Operations: | ||||||||||||||||
| Loss from discontinued operations | - | (9,797,694 | ) | - | (12,211,207 | ) | ||||||||||
| Income tax benefit | - | - | - | 132,000 | ||||||||||||
| Loss from Discontinued Operations | - | (9,797,694 | ) | - | (12,079,207 | ) | ||||||||||
| Net Income (Loss) | $ | 84,925,750 | $ | (105,333,293 | ) | $ | (24,594,280 | ) | $ | (99,845,153 | ) | |||||
| 6 |
Comparison of the Nine Months Ended September 30, 2026 and 2025
Product Net Revenue/Gross Margin
For the nine months ended September 30, 2026, revenue decreased to $192,780 from $204,120 in the prior nine months ended September 30, 2025. For the same periods, costs of goods sold decreased by $17,302 to $202,578 from $219,880.
The inventory reserve increased by $284,228 for the nine month period ended September 30, 2026, with the prior period ended September 30, 2025 reserve of $0.
Staking Revenue – net
For the nine months ended September 30, 2026, the Company recognized net staking revenue of $8,008,669 as compared to $2,205,423 for the nine months ended September 30, 2025, resulting from the digital treasury strategy implemented during the third quarter of 2025.
Transaction expense – digital commodities
For the nine months ended September 30, 2026, $200,208 in transaction expenses relate to custodian and exchange for digital commodity investments. Digital commodity transaction expenses of $810,861 were incurred in the same period of 2025, including a one-time fee related to the digital assets transferred in connection with the August 2025 private placement.
Unrealized gain on digital commodities
During the nine months ended September 30, 2026, the Company recognized $6,188,567 in unrealized gain on investments in digital commodities as compared to $14,864,742 for the nine months ended September 30, 2025.
Realized loss on digital commodities
During the nine months ended September 30, 2026, the Company recognized $17,531,835 in realized losses on sale of investments in digital commodities as compared to a realized gain of $635,000 for the nine months ended September 30, 2025.
The realized loss in 2026 reflected the difference between the average price of $94.14 received for the sale of 164,400 SOL and the cost basis of $200.78.
Research and Development
For the nine months ended September 30, 2026, Research and Development (“R&D”) expenses increased to $1,047,055 compared to none for the nine months ended September 30, 2025. This increase resulted from new R&D activities related to the Company’s software development.
Selling, General and Administrative
For the nine months ended September 30, 2026, Selling, General and Administrative (“SG&A”) expenses were $12,814,606 as compared to $9,876,048 for the nine months ended September 30, 2025. The increase of $2,938,558 was primarily attributable to the following factors
| ● | An increase of approximately $1.2 million in payroll and related costs, primarily due to an increase of $0.9 million in stock compensation expense and an increase of $0.3 million mainly due to payroll from new hires. |
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| ● | An increase of approximately $1.5 million in professional services: |
| ○ | $1.0 million increase related to audit, accounting and tax advisory services | |
| ○ | $0.3 million increase in legal fees | |
| ○ | $0.1 million increase in consulting and other professional services |
| ● | All other G&A expenses decreased approximately $0.1 million, as a $0.7 million increase in insurance costs and a $0.8 million decrease in consulting costs. |
Consulting fees – related parties
This amount of $7,112,523 represents consulting fees to Sol Edge. See Note 13 to the Condensed Consolidated Financial Statements.
Net Interest income (expense)
Net interest income was $135,932 for the nine months ended September 30, 2026, compared to interest expense of $461,551 for the nine months ended September 30, 2025. Net interest changed by $597,483 due to a) interest earned on cash in 2026 of $180,249 as compared to $246,839 in 2025 b) interest expense of $708,390 in 2025 for the accreted interest on the debt financing that originated in the third quarter of 2024 as compared to $44,317 in interest expense during 2026.
FMV Adjustment for Warrants
The value of the Warrants recorded as a liability requires the Fair Market Value (“FMV”) to be recorded at the date warrants are issued and then be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other income or expense in the Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2026, and 2025 the Company recorded a FMV gain adjustment of $66,148 and $12,295,842, respectively.
Comparison of the Three Months Ended September 30, 2026 and 2025
Product Net Revenue/Gross Margin
For the three months ended September 30, 2026 and September 30, 2025, we recognized revenues of $0 and $68,040. For the same periods, cost of sales were recognized of $0 and $71,260, respectively. These revenues were the initial shipments of the SoloGard line of syringes.
Staking Revenue – net
For the three months ended September 30, 2026, the Company recognized net staking revenue of $2,551,013 resulting from the digital treasury strategy implemented during the third quarter of 2025. For the 2025 period staking revenue for just over one month within the period totaled $2,205,423.
Transaction expense – digital commodities
For the three months ended September 30, 2026, $71,700 in transaction expenses relate to custodian and exchange for digital commodity investments. Digital commodity transaction expenses of $810,861 were incurred in the same period of 2025, including a one-time fee related to the digital assets transferred in connection with the August 2025 private placement.
Unrealized gain on digital commodities
During the three months ended September 30, 2026, the Company recognized $90,525,120 in unrealized gain on investments in digital commodities as compared to $14,864,742 for the three months ended September 30, 2025.
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Realized loss on digital commodities
During the three months ended September 30, 2026, the Company recognized $2,815,036 in losses on sale of investments in digital commodities.
The realized loss reflected the difference between the average price of $103.71 received for the sale of 29,000 SOL and the cost basis of $200.78.
Research and Development
For the three months ended September 30, 2026, R&D expenses increased to $626,800 compared to none for the three months ended September 30, 2025. This increase resulted from new R&D activities related to the Company’s software development.
Selling, General and Administrative
For the three months ended September 30, 2026, SG&A expenses were $2,598,029 as compared to $7,100,592 for the three months ended September 30, 2025. The decrease of $4,502,563 was primarily attributable to the following factors
| ● | A decrease of approximately $3.0 million in payroll and related costs. This includes an increase of $0.2 million in payroll and a decrease of $3.2 million in stock compensation expense | |
| ● | All other G&A expenses decreased by approximately $1.4 million, primarily due to $1.8 million in lower consulting fees, offset by $0.3 million in higher professional expenses and $0.2 million in higher insurance costs. |
Consulting fees – related parties
This amount of $2,112,524 represents consulting fees to Sol Edge. See Note 13 to the Condensed Consolidated Financial Statements.
Net Interest income (expense)
Net Interest income was $49,148 for the three months ended September 30, 2026, compared to $68,488 for the three months ended September 30, 2025.
FMV Adjustment for Warrants
For the three months ended September 30, 2026, and 2025 the Company recorded a FMV gain adjustment of $18,229 and $1,208,142, respectively.
Liquidity and Capital Resources
Nine months ended September 30, 2026 | Nine months ended September 30, 2025 | |||||||
| Beginning cash | 10,382,745 | 864,041 | ||||||
| Cash from operating activities | (9,145,283 | ) | (7,059,009 | ) | ||||
| Cash from investing activities | 12,437,640 | (186,104,214 | ) | |||||
| Cash from financing activities | (6,197,330 | ) | 210,726,915 | |||||
| Cash from discontinued operations | - | (7,906,027 | ) | |||||
| Ending cash | 7,477,772 | 10,521,706 | ||||||
Net Cash Used in Operating Activities
The Company used cash of $9,145,283 and $7,059,009 in operating activities for the nine months ended September 30, 2026 and 2025, respectively. The change in cash used was principally due to the Company incurring higher G&A expenses and new R&D activities, as described above, during the nine months ended September 30, 2026.
Net Cash Provided By (Used In) Investing Activities
For the nine months ended September 30, 2026, the Company provided cash from investing activities of $12,437,640, mainly from the sales of Solana. For the nine months ended September 30, 2025, the Company used $186,104,214 to purchase digital assets.
Net Cash Provided by Financing Activities
For the nine months ended September 30, 2026 and 2025, the Company used and provided cash from financing activities of $6,197,330 and $210,726,915 respectively. In the 2025 period, the cash provided was from the $207,320,039 in net proceeds from share offerings and margin loan of $7,628,888, offset by the debt repayment of $4,222,012. In the 2026 period, the cash was used for the remaining repayment of the margin loan $3,084,931 and the share repurchase program $3,112,399.
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Following is a summary of stablecoin activity for the nine months ended September 2026 and 2025:
September 30, 2026 | September 30, 2025 | |||||||
| Payment stablecoin (in USD) | Payment stablecoin | Payment stablecoin | ||||||
| Beginning payment stablecoin | 2 | - | ||||||
| In-kind payment stablecoin (PIPE) | - | 86,104,501 | ||||||
| Solana sale proceeds | 3,007,746 | |||||||
| Payment stablecoin purchases | 354,595 | 17,003,451 | ||||||
| Dispositions of payment stablecoin | (316,799 | ) | (88,411,950 | ) | ||||
| Ending payment stablecoin | 3,045,544 | 14,696,002 | ||||||
Subsequent to the end of the third quarter and in anticipation of the completion of the tender offer, the Company liquidated its Solana treasury, selling approximately 2 million SOL at an average price net of fees of $107.20 per SOL for cash and USDC. The USDC was subsequently liquidated to cash, with a resulting cash balance of approximately $224 million. If all securities are tendered at the maximum percentages specified in the amended tender offer, the Company will pay approximately $214.3 million. The Company will pay for the securities purchased, and the related fees and expenses, from cash on hand. The Company no longer holds any SOL and after the Offer is closed does not intend to repurchase SOL.
The Company intends to finance its future development and commercialization activities related to agentic AI and its other working capital needs with a combination of the sale of equity securities and/or with additional funding from other traditional financing sources until such time that funds provided by operations are sufficient to fund working capital requirements. The Company is currently debt free and intends to maintain sufficient cash and other immediately liquid resources on hand to satisfy current obligations.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet arrangements as defined under Regulation S-K Item 303(a)(4).
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Emerging Growth Company Status
We are an “emerging-growth company”, as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an emerging growth company, we can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to avail ourselves of these options. Once adopted, we must continue to report on that basis until we no longer qualify as an emerging growth company.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the initial public offering; (ii) the first fiscal year after our annual gross revenue are $1.235 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If, as a result of our decision to reduce future disclosure, investors find our common shares less attractive, there may be a less active trading market for our common shares and the price of our common shares may be more volatile.
We are also a “smaller reporting company”, meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that 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 to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation of internal controls that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
Except for the additional risk factors set forth below, factors that could cause our actual results to differ materially from those in this Quarterly Report are described in the Form 10-K for the year ended December 31, 2025, and any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Except as described below, as of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Form 10-K for the year ended December 31, 2025. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Sales, or the perception of sales, of our shares of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.
The sale of substantial amounts of shares of common stock in the public market or the perception that such sales could occur, could harm the prevailing market price of our common stock. These sales, by us or our existing stockholders, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. If our pending self-tender offer announced on October 16, 2026 is completed, the Company will have significantly fewer shares outstanding in the public market, therefore the sale of substantial amounts of shares of common stock in the public market may cause an even greater impact from trading volume volatility on the market price of our common stock.
Our stock price may be volatile, and the value of our common stock may decline.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:
| ● | actual or anticipated fluctuations in our financial condition or results of operations; | |
| ● | variance in our financial performance from expectations of securities analysts; | |
| ● | changes in our projected operating and financial results; | |
| ● | changes in laws or regulations applicable to our products; | |
| ● | announcements by us or our competitors of significant business developments, acquisitions or new products, including our newly adopted business strategy focused on building an agentic finance platform; | |
| ● | sales of shares of our common stock by us or our shareholders; | |
| ● | our involvement in litigation; | |
| ● | future sales of our common stock by us or our stockholders; | |
| ● | changes in senior management or key personnel; | |
| ● | the trading volume of our common stock; | |
| ● | changes in the anticipated future size and growth rate of our market; | |
| ● | general economic and market conditions; and | |
| ● | other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events. |
Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of our common stock. In the past, companies who have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.
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Our need for future financing may result in the issuance of additional securities which will cause investors to experience dilution.
Our cash requirements may vary from those now planned depending upon numerous factors. There are no commitments by any person for future financing. Our securities may be offered to other investors at a price lower than the price per share offered to current stockholders, or upon terms which may be deemed more favorable than those offered to current stockholders. In addition, the issuance of securities in any future financing may dilute an investor’s equity ownership and have the effect of depressing the market price for our securities. Moreover, we may issue derivative securities, including options and/or warrants, from time to time, to procure qualified personnel or for other business reasons. The issuance of any such derivative securities, which is at the discretion of our Board of Directors, may further dilute the equity ownership of our stockholders.
We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors at other times, including the price to be paid by the Company in the current self-tender offer announced on October 16, 2026, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors at other times, including the price to be paid by the Company in the current self-tender offer. No assurance can be given as to our ability to procure additional financing, if required, and on terms deemed favorable to us. To the extent additional capital is required and cannot be raised successfully, we may then have to limit our then current operations and/or may have to curtail certain, if not all, of our business objectives and plans.
We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.
We may, from time to time, be involved in various litigation or arbitration matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation or arbitration that arises in the ordinary course of our business, or that may arise in connection with other matters such as in connection to our current self-tender offer announced on October 16, 2026. We cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or arbitration, or the potential costs to resolve it, may have a material adverse effect on our business. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent, which could have a material adverse effect on our financial condition.
We have recently undergone a fundamental transformation of our business and strategic direction, and there can be no assurance that our new strategy will be successful.
Beginning in October 2025, we discontinued the manufacturing of syringe products and related drug-delivery systems. In May 2026, we announced that we adopted a new business strategy focused on building an agentic finance platform serving the global south. We have limited operating history in the agentic finance platform markets, and our ability to execute our new strategy is unproven. Our management team, while experienced in corporate strategy, mergers and acquisitions and capital markets, has not previously managed a publicly traded finance platform company. There can be no assurance that our strategic pivot will result in successful acquisitions, revenue growth or profitability, and the failure to execute our strategy could have a material adverse effect on our business, financial condition and results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sale of Unregistered Equity Securities
During the quarter ended September 30, 2026, no unregistered sales of equity securities occurred.
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Repurchases of Equity Securities
During the three months ended September 30, 2026, the Company repurchased 637,884 shares of our common stock for $1,100,826. The following table presents information with respect to purchases of common stock of the Company during the three months ended September 30, 2026, by the Company or an “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act:
| Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs | ||||||||||||
| July 1, 2026 to July 31, 2026 | - | $ | - | - | ||||||||||||
| August 1, 2026 to August 31, 2026 | 56,614 | 1.08 | 56,614 | |||||||||||||
| September 1, 2026 to September 30, 2026 | 581,270 | $ | 1.77 | 581,270 | ||||||||||||
| Total | 637,884 | $ | 1.73 | 637,884 | $ | 96,887,601 | ||||||||||
| (1) | The shares were purchased pursuant to our share repurchase program (the “2025 Repurchase Program”) which was publicly announced by the Company on October 9, 2025. The 2025 Repurchase Program provides for the repurchase of up to $100 million of our outstanding shares of common stock and will continue in effect until terminated. | |
| (2) | This column discloses the number of shares purchased pursuant to the program during the indicated time periods. |
Item 3. Default Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
During
the quarterly period ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange
Act)
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ITEM 6. EXHIBITS
| Exhibit Number | Description | |
| 31.1* | Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on the 6th day of November 2026.
| SKYAI, INC. | |
| November 6, 2026 | /s/ Paul K. Danner |
| Paul K. Danner | |
| Executive Chairman and Principal Executive Officer (Principal Executive Officer) | |
| November 6, 2026 | /s/ Arthur Levine |
| Arthur Levine | |
| Chief Financial Officer (Principal Financial Officer) |
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