Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q, including the disclosures under Part II, Item IA "Risk Factors," and our audited condensed consolidated financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission, or the SEC, on March 16, 2026. Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and, unless otherwise indicated, amounts are presented in U.S. dollars.

Company Overview

We are a privacy technology company implementing a digital asset treasury strategy anchored by Zcash and, through our subsidiary Leap, are developing novel therapies for patients with cancer.

We have historically devoted substantially all of our resources to development efforts relating to our product candidates, including manufacturing and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through proceeds from our sales of common stock and preferred stock and proceeds from the issuance of notes payable.

In October 2025, we initiated a strategy to deploy a portion of our capital raised that is not required to provide working capital for our ongoing operations to accumulate digital assets. Zcash is a protocol and blockchain network of connected devices all over the world, working together to validate transactions and maintain the Zcash ledger. ZEC is the monetary unit, or coin, of Zcash. Zcash allows for transactional privacy, providing users with options for fully shielded transactions in which the sender, recipient, and amount are encrypted.

We renamed our company "Cypherpunk Technologies Inc." to reflect the strategic focus on acquiring ZEC, participating in the development of Zcash, and the values of privacy and liberty. Our ongoing research and development operations are conducted under a wholly-owned subsidiary named "Leap Therapeutics, Inc."

Recent Developments

Since December 31, 2025, we provided the following development and business updates.

Cypherpunk Highlights:

Leap Therapeutics Subsidiary Highlights:

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Financial Overview

Research and Development Expenses

Our research and development activities have included conducting nonclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings for our product candidates, primarily sirexatamab. We recognize research and development expenses as they are incurred. Our research and development expenses during the three months ended March 31, 2026 consisted primarily of:

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of internal and external costs, such as employee costs, including salaries and stock-based compensation, other internal costs, fees paid to

consultants, central laboratories, contractors and CROs in connection with our clinical and preclinical trial development activities. We use internal resources to manage our clinical and preclinical trial development activities and perform data analysis for such activities.

We participate, through our subsidiary in Australia, in the Australian government's research and development ("R&D") Incentive program ("R&D Incentive Program"), such that a percentage of our eligible research and development expenses are reimbursed by the Australian government as a refundable tax offset and such incentives are reflected as other income.

The table below summarizes our research and development expenses incurred by development program and the R&D Incentive income for the three months ended March 31, 2026 and 2025:

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The successful development of our clinical product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our product candidates or the period, if any, in which material net cash inflows from these product candidates may commence.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to expand our operations. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company that has a privacy technology and digital asset treasury strategy.

Interest income

Interest income consists primarily of interest income earned on cash and cash equivalents.

Research and development incentive income

Research and development incentive income includes payments under the R&D Incentive Program from the government of Australia. The R&D Incentive Program is one of the key elements of the Australian government's support for Australia's innovation system. It was developed to assist businesses in recovering some of the costs of undertaking research and development. The research and development tax incentive provides a tax offset to eligible companies that engage in research and development activities.

Companies engaged in research and development may be eligible for either:

We recognize as income the amount we expect to be reimbursed for qualified expenses.

Foreign currency translation adjustment

Foreign currency translation adjustment consists of gains (losses) due to the revaluation of foreign currency transactions attributable to changes in foreign currency exchange rates associated with our Australian subsidiary.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations- Critical Accounting Policies and Significant Judgments and Estimates" in our Annual Report on Form 10-K filed with the SEC on March 16, 2026, and the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

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Research and Development Expenses

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Research and development expenses were $0.2 million for the three months ended March 31, 2026, compared to $12.9 million for the three months ended March 31, 2025. The decrease of $12.7 million in research and development expenses during the three months ended March 31, 2026 as compared to the same period in 2025, was primarily due to the completion of our clinical trials and the Company's reduction in force in June 2025. There was also a decrease of $0.2 million in consulting fees related to research and development activities.

General and Administrative Expenses

General and administrative expenses were $4.7 million for the three months ended March 31, 2026 compared to $3.0 million for the three months ended March 31, 2025. The increase of $1.7 million in general and administrative expenses during the three months ended March 31, 2026 as compared to the same period in 2025, was primarily due to a $1.6 million increase in stock based compensation expense due to RSUs granted to general and administrative employees and directors during the three months ended December 31, 2025. There was also an increase of $0.6 million in professional fees due to increased audit and financial consulting fees associated with digital assets. These increases were partially offset by a $0.5 million decrease in payroll and other related expenses due to a decrease in headcount of our general and administrative employees due to the reduction in force.

Interest Income

During the three months ended March 31, 2026 and 2025, we recorded interest income of $0.1 million and $0.4 million, respectively. The decrease was due to a higher average cash and cash equivalent balance during the three months ended March 31, 2025.

Australian Research and Development Incentives

We record R&D incentive income based upon the applicable percentage of eligible research and development activities under the R&D Incentive Program, which expenses included the cost of manufacturing clinical trial material. During the three months ended March 31, 2025, we recorded $0.1 million of R&D incentive income. During the three months ended March 31, 2026, we did not record any R&D incentive income.

The R&D incentive receivable has been recorded as "Research and development incentive receivable" in the condensed consolidated balance sheets.

Unrealized Loss on Change in Fair Value of Embedded Derivative

During the three months ended March 31, 2026, we recorded a $77.6 million unrealized loss on the change in fair value of embedded derivative.

Foreign Currency Gain/Loss

During the three months ended March 31, 2026 and 2025, we recorded an immaterial amount of foreign currency transaction losses. Foreign currency transaction losses are due to changes in the Australian dollar exchange rate related to activities of the Australian entity.

Financial Position, Liquidity and Capital Resources

Since our inception, we have been engaged in organizational activities, including raising capital, and research and development activities, and in October 2025, we implemented our digital asset treasury strategy. We have not yet achieved profitable operations or generated positive cash flows from operations, and we do not yet have a product that has been approved by the Food and Drug Administration (the "FDA"). There is no assurance that profitable operations from our privacy technology/digital asset treasury strategy or our biotechnology operations, if achieved, could be sustained on a continuing basis. Further, our future operations are dependent on the success of efforts to raise additional capital, the success of our privacy technology/digital asset treasury strategy, our biotechnology research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of our products.

In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of March 31, 2026, we had cash and cash equivalents of $6.7 million and ZEC treasury holdings categorized as a digital asset receivable valued at $73.8 million. Additionally we had accumulated deficit of $539.7 million at March 31, 2026 and during the three months ended March 31, 2026, we incurred a net loss of $77.2 million. We expect to continue to generate operating losses for the foreseeable future. We believe that our cash and cash equivalents of $6.7 million as of March 31, 2026, together with our ability to raise additional capital from the $200.0 million Sales Agreement with Cantor, will be sufficient to fund our operating expenses for at least the next 12 months from issuance of these financial statements.

In addition, to support our future operations, we will seek additional funding through public or private, equity or debt financings and, for our biotechnology operations, we will seek funding or development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If we do not obtain additional funding or development program cost-sharing, we could be forced to eliminate certain programs, reduce or eliminate discretionary operating expenses, and delay company expansion, which could adversely affect our business prospects. The inability to obtain funding, as and when needed, could have a negative impact on our financial condition and our ability to pursue our business strategies.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

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Operating activities. Net cash used in operating activities for the three months ended March 31, 2026 was primarily related to our net loss of $77.2 million, a noncash change in deferred income taxes of $5.1 million and changes in working capital, including a decrease in accounts payable and accrued expenses of $1.6 million. These changes were partially offset by a decrease of $0.7 million in other assets, a decrease of $0.1 million in prepaid expenses and other assets, noncash stock-based compensation expense of $2.1 million and a noncash unrealized loss on the change in fair value of embedded derivative of $77.6 million.

Net cash used in operating activities for the three months ended March 31, 2025 was primarily related to our net loss from the operation of our business of $15.4 million and net changes in working capital, including a decrease in accounts payable and accrued expenses of $0.4 million, a decrease in lease liabilities of $0.1 million and an increase in research and development incentive receivable of $0.1 million. These changes were partially offset by a decrease of $0.2 million in prepaid expenses and other assets, a decrease of $0.1 million in right-of-use asset and noncash stock-based compensation expense of $1.2 million.

Investing Activities. Net cash used in investing activities for the three months ended March 31, 2026 was related to $4.0 million of cash used to purchase ZEC tokens and $5.0 million used for the investment in Znewco, Inc. ("Znewco"), doing business as Zcash Open Development Lab ("ZODL"), through a Simple Agreement for Future Equity ("SAFE"). There were no investing activities during the three months ended March 31, 2025.

Financing Activities. Net cash provided by financing activities during the three months ended March 31, 2026, consisted of $5.7 million in net proceeds through issuance of common stock through ATM sales and the collection of stock subscription receivable of $0.2 million, partially offset by payment of $0.6 million of deferred offering costs and $0.2 million of principal payments of insurance financing. Net cash provided by financing activities for the three months ended March 31, 2025 consisted of an immaterial amount of proceeds upon the exercise of stock options.

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