Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context otherwise requires, all references in this section to the "Company," "Silvia," "we," "us," or "our" refer to Silvia, Inc., a Delaware corporation, and its subsidiaries. The following discussion and analysis of the financial condition and results of operations of the consolidated Company should be read together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (the "Quarterly Report") for the nine months ended September 30, 2026 (the "Unaudited Condensed Consolidated Financial Statements"), the Annual Report on Form 10-K filed on February 18, 2026 (the "Annual Report"), and in our prospectus dated October 15, 2026, filed with the U.S. Securities and Exchange Commission ("SEC") on October 20, 2026 pursuant to Rule 424(b)(3) under the Securities Act (Registration No. 333-292590) (the "Prospectus") and Risk Factors contained therein.

On December 5, 2025, the Company completed a business combination (the "Business Combination") with Columbus Circle Capital Corp I ("CCCM"), which was accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles ("GAAP"). ProCap BTC, LLC ("ProCap BTC") was determined to be the accounting acquirer and CCCM was treated as the acquired company for financial reporting purposes. Following the Business Combination, the Company became the publicly traded parent company, and ProCap BTC became its operating subsidiary. As a result, the historical financial statements of ProCap BTC became the historical financial statements of the Company. Accordingly, the comparative financial information presented for periods prior to the Business Combination, including the period from June 10, 2025 (inception) through September 30, 2025, reflects the historical results of ProCap BTC. This discussion contains forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," and "continue," or the negative of such terms or other similar expressions. Such statements include, but are not limited to, statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations with respect to our Silvia AI-powered financial products and platforms, including Silvia Insights and the CFO Silvia platform, our asset management business and the proposed Silvia ETFs (each as defined below); our Bitcoin treasury strategy; the transition of our executive officers; the remediation of the material weakness in our internal control over financial reporting; possible business combinations and the financing thereof, and related matters; as well as all other statements other than statements of historical fact included in this Quarterly Report.

Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

Founded in 2025, Silvia is a U.S.-based modern finance company. Our mission is to help independent investors make money. Historically, our operations included investor-focused media, educational content and strategic investments designed to support independent investors through digital platforms and other content offerings. In addition, we believe that advances in artificial intelligence ("AI") and automation have the potential to transform financial analysis, investment research and investor decision support. Our strategy is centered on developing scalable technology platforms, expanding our proprietary data and analytical capabilities, and pursuing strategic opportunities that enhance our products, services and long-term growth prospects. Through a combination of internal development initiatives and strategic acquisitions, we seek to provide technology-enabled solutions designed to improve the accessibility, efficiency and quality of financial information and analysis available to investors.

During 2026, we expanded our AI-focused initiatives through the launch of Silvia Insights, an AI-driven research product designed to provide investors with market intelligence and investment research, and the acquisition of CFO Silvia, Inc. ("CFO Silvia" and such acquisition, the "CFO Silvia Acquisition"), a consumer-focused financial technology platform that utilizes AI to aggregate and analyze financial information. During the quarter ended June 30, 2026, we further expanded our business to include asset management through the launch of Silvia Innovation Fund I, LP, a Delaware limited partnership (the "Initial Fund" and, together with any other private funds, alternative investment vehicles or co-investment vehicles that we or our subsidiaries sponsor, advise or manage, the "Funds"). On August 13, 2026, an unaffiliated third-party trust filed a registration statement with respect to five proposed exchange-traded funds (the "Silvia ETFs") for which one of our subsidiaries is proposed to serve as investment sub-adviser. In August 2026, the Company launched Silvia SPV, LP (the "SPV Fund"), a special purpose investment vehicle advised by the Company's investment manager. The SPV Fund was formed to invest in privately held companies and other strategic investment opportunities that align with the Company's focus on financial technology and innovation. We also have adopted a Bitcoin treasury strategy and intend to hold Bitcoin as a treasury reserve asset. Our business is built upon a foundational belief that Bitcoin represents a superior long-term store of value and a viable alternative to traditional fiat-based reserve assets, and we believe that Bitcoin will play an increasingly important role as a reserve asset for individuals, corporations and governments worldwide.

AI and Regulatory Uncertainty

Our AI-related initiatives operate in rapidly evolving and competitive markets and are subject to changing legal, regulatory, and technological developments, including those relating to data privacy, cybersecurity, intellectual property, consumer protection, and the use of automated financial analysis tools. As we continue to develop and expand our platforms, we expect innovation, technology development, and disciplined capital allocation to remain important components of our strategy.

Recent Developments

Asset Management

During the quarter ended June 30, 2026, the Company expanded its business to include asset management through the launch of the Initial Fund (the term "Funds" does not include the Silvia ETFs described below under "Proposed Exchange-Traded Funds"). The Initial Fund invests in early-stage companies aligned with the Company's CFO Silvia platform strategy and is advised by ProCap Investment Advisers, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (the "Investment Manager"). The Company holds indirectly an interest in the Initial Fund through one of its wholly-owned subsidiaries, Silvia Innovation Fund I GP, LLC, the general partner of the Initial Fund (the "General Partner"). The launch of the Initial Fund represents the Company's initial expansion into investment management activities supporting its broader AI-enabled financial technology strategy. As of September 30, 2026, the Initial Fund and related entities had not commenced significant operations and had not engaged in material transactions.

Board Appointment and Nasdaq Compliance

On July 15, 2026, the Company appointed Benjamin Buchanan as an independent director and a member of the audit committee of the board of directors. As a result of this appointment, the Company regained compliance with the Nasdaq corporate governance requirements relating to board and audit committee independence, and on July 21, 2026, the Company received notice from Nasdaq confirming that the matter had been resolved and closed.

Proposed Exchange-Traded Funds

On August 13, 2026, Tidal Trust IV, a Delaware statutory trust that is not affiliated with us, filed a post-effective amendment to its registration statement on Form N-1A with the SEC (File No. 333-285633) with respect to the Silvia ETFs, each of which is proposed to be actively managed. Tidal Investments LLC serves as investment adviser to the Silvia ETFs, and the Investment Manager is proposed to serve as investment sub-adviser and to provide portfolio management services. In connection with these arrangements, on September 17, 2026, the Investment Manager filed Parts 1 and 2A of Form ADV with the SEC to register as an investment adviser under the Investment Advisers Act of 1940, as amended, but its registration has not yet become effective.

The registration statement remains subject to SEC review and comment and may be amended, delayed or withdrawn. No Silvia ETF may commence operations until its registration statement has become effective, its shares have been approved for listing on a national securities exchange, the Investment Manager's registration as an investment adviser has become effective, and applicable distribution and operational arrangements are in place. As of the date of this Quarterly Report, we have not earned any sub-advisory fees, no seed capital has been committed or funded by us or our subsidiaries, and costs incurred in connection with the proposed Silvia ETFs have not been material. We do not expect the Silvia ETFs to generate meaningful revenue in the near term. See Part II, Item 1A, "Risk Factors."

This Quarterly Report is not an offer to sell or the solicitation of an offer to buy shares of any Silvia ETF. Any offering of shares of a Silvia ETF will be made only by means of a prospectus. We are not the issuer of, and do not offer, shares of any Silvia ETF.

Special Purpose Vehicle

On August 26, 2026, the Company launched the SPV Fund, a special purpose investment vehicle advised by the Investment Manager. As of September 30, 2026, the SPV Fund had committed approximately $11.0 million to three privately held companies. See Notes 1, 2 and 13 to our Unaudited Condensed Consolidated Financial Statements.

Company Name Change

On September 17, 2026, the Company filed a Certificate of Amendment to the Company's Certificate of Incorporation with the Delaware Secretary of State to change the Company's name from ProCap Financial, Inc. to Silvia, Inc., effective as of September 22, 2026.

Executive Officer Transitions

On October 14, 2026, our Board of Directors and each of Kyle Wood, our Chief Legal Officer and Secretary, Megan Pacchia, our Chief Operating Officer, and Renae Cormier, our Chief Financial Officer, mutually agreed that each such officer would separate from the Company, with each separation effective no later than October 21, 2026. Pursuant to mutual separation agreements and general releases entered into with each such officer, and subject to each officer's execution and non-revocation of a general release of claims, each officer will receive severance of $0.5 million, payable in equal monthly installments over six months, and Mr. Wood, Ms. Pacchia and Ms. Cormier will receive 258,317, 366,392 and 194,495 fully vested shares of our common stock, par value $0.001 per share ("Common Stock"), respectively, under our 2025 Equity Incentive Plan (the "2025 Equity Plan"), subject to the execution of an award agreement and approval of our Board of Directors. We expect to recognize the related severance and share-based compensation expense in the fourth quarter of 2026. Our Board of Directors appointed Catalina Abbey as interim Chief Financial Officer and Caroline Hennigar as Chief Operating Officer, serving as our principal operating officer, in each case effective as of the applicable separation date. As of the date of this Quarterly Report, we have not appointed a successor Chief Legal Officer. See our Current Report on Form 8-K filed with the SEC on October 20, 2026 and Part II, Item 1A, "Risk Factors."

Results of Operations

As discussed in Note 1 to our Unaudited Condensed Consolidated Financial Statements, the comparative financial information presented for the period from June 10, 2025 (inception) through September 30, 2025, reflects the historical results of ProCap BTC.

(All figures in this Item 2 in thousands, except share, per share data, Bitcoin, and per Bitcoin data, unless otherwise indicated)

Comparison of the Components of Statements of Operations for the Three Months Period Ended September 30, 2026, and September 30, 2025

		For the Three Months Ended
		September 30, 2026				September 30, 2025				Increase (Decrease)				Percentage Change
Revenue		$	135			$	77			$	58				75	%
Operating Expenses:
Cost of revenue (exclusive of depreciation and amortization)			488				-				488				100	%
General and administrative			4,838				4,325				513				12	%
Depreciation and amortization			958				-				958				100	%
Stock-based compensation			3,745				-				3,745				100	%
Total Operating Expenses			10,029				4,325				5,704				132	%
Operating Loss			(9,894	)			(4,248	)			(5,646	)			133	%
Other income (expense)
Unrealized gain on digital assets			137,177				34,608				102,569				296	%
Realized loss on digital assets			(3,485	)			-				(3,485	)			-100	%
Interest and dividend income			88				-				88				100	%
Interest expense			(759	)			-				(759	)			-100	%
Change in fair value of derivative liability			-				45,452				(45,452	)			-100	%
Other income, net			133,021				80,060				52,961				66	%
Net income before taxes			123,127				75,812				47,315				62	%
Income tax expense			273				-				273				100	%
Net Income		$	122,854			$	75,812			$	47,042				62	%

Revenues

Revenue for the three months ended September 30, 2026 and 2025 was $0.1 million. Revenue remained limited as we recently launched new revenue generating products relating to Silvia Insights and CFO Silvia. The Company's revenue growth will depend on the successful commercialization of its products and services and the continued execution of its growth strategy. The Company also expanded its asset management platform during 2026 and is pursuing the launch of the proposed Silvia ETFs. However, no revenue has been generated from asset management or ETF-related activities as of September 30, 2026, as the Investment Manager's registration has not yet become effective and the proposed Silvia ETFs have not commenced operations.

Cost of Revenue (exclusive of depreciation and amortization)

Cost of revenue (exclusive of depreciation and amortization) was $0.5 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The increase was primarily driven by software licensing fees incurred for CFO Silvia related services.

General and Administrative Expenses

General and administrative expenses were $4.8 million for the three months ended September 30, 2026, compared to $4.3 million for the three months ended September 30, 2025. The 2026 period reflects operations as a public company and inclusion of $1.7 million of payroll compensation, $1.2 million of software licensing fees, $1.0 million of professional fees (including acquisition related expenses) and $0.9 million of other expenses, including insurance expenses. The 2025 period reflected only limited administrative activities as we had recently commenced operations then and had not yet developed the infrastructure, personnel base, and operational scale necessary to support our current business activities.

Depreciation and Amortization Expenses

Depreciation and amortization expense was $1.0 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The increase was primarily attributable to the amortization of identifiable intangible assets recognized in connection with the CFO Silvia Acquisition.

Stock-based Compensation

Stock-based compensation expense was $3.7 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The increase was attributable to equity awards granted to employees and consultants under the 2025 Equity Plan.

Other Income, net

Other income, net for the three months ended September 30, 2026 was $133.0 million, compared to other income, net of $80.1 million for the three months ended September 30, 2025. The increase was primarily driven by the change in fair value of digital assets as a result of an increase in Bitcoin market prices.

Unrealized gain on digital assets

Unrealized gain on digital assets was $137.2 million for the three months ended September 30, 2026, compared to an unrealized gain on digital assets of $34.6 million for the three months ended September 30, 2025. The change was primarily attributable to an increase in the fair value of the Company's Bitcoin holdings during the three months ended September 2026.

Realized loss on digital assets

Realized loss on digital assets was $3.5 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The loss was attributable to sales of digital assets during the 2026 period.

Interest and dividend income

Interest and dividend income was $0.1 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The increase was primarily attributable to income earned on cash, cash equivalents, and investments held during the 2026 period.

Interest expense

Interest expense was $0.8 million for the three months ended September 30, 2026, compared to $0 for the three months ended September 30, 2025. The increase was primarily attributable to the amortization of debt discount and debt issuance costs associated with the Company's convertible notes issued in connection with the Business Combination (the "Convertible Notes") during the 2026 period.

Change in fair value of derivative liabilities

Change in fair value of derivative liabilities was $0 for the three months ended September 30, 2026, compared to income of $45.5 million for the three months ended September 30, 2025. The change was attributable to the derivative liability recognized in the preferred units of ProCap BTC issued in connection with the preferred investment of ProCap BTC prior to the Business Combination. The derivative liability was no longer outstanding during the 2026 period.

Comparison of the Components of Statements of Operations of the Nine Months Ended September 30, 2026, and the Period from June 10, 2025 (Inception) through September 30, 2025

		For the Nine Months Ended				Period from June 10, 2025 (Inception) through
		September 30, 2026				September 30, 2025				Increase (Decrease)				Percentage Change
Revenue		$	173			$	77			$	96				125	%
Operating Expenses:
Cost of revenue (exclusive of depreciation and amortization)			489				-				489				100	%
General and administrative			19,144				4,333				14,811				342	%
Depreciation and amortization			2,207				-				2,207				100	%
Stock-based compensation			11,008				-				11,008				100	%
Total Operating Expenses			32,848				4,333				28,515				658	%
Operating Loss			(32,675	)			(4,256	)			(28,419	)			668	%
Other income (expense)
Unrealized (loss) gain on digital assets			(17,652	)			48,904				(66,556	)			-136	%
Realized loss on digital assets			(6,161	)			-				(6,161	)			-100	%
Change in fair value of convertible notes conversion feature			946				-				946				100	%
Realized loss on put option liability			(914	)			-				(914	)			-100	%
Gain on extinguishment of debt			5,933				-				5,933				100	%
Interest and dividend income			959				-				959				100	%
Interest expense			(2,619	)			-				(2,619	)			-100	%
Change in fair value of derivative liability			-				55,782				(55,782	)			-100	%
Other (expense) income, net			(19,508	)			104,686				(124,194	)			-119	%
Net (loss) income before taxes			(52,183	)			100,430				(152,613	)			-152	%
Income tax benefit			(2,231	)			-				(2,231	)			100	%
Net (Loss) Income		$	(49,952	)		$	100,430			$	(150,382	)			-150	%

Revenues

Revenue for the nine months ended September 30, 2026 and for the period from June 10, 2025 (Inception) through September 30, 2025 was $0.2 million and $0.1 million, respectively, as we recently launched new revenue generating products during the 2026 period relating to Silvia Insights and the CFO Silvia Acquisition. The Company also expanded its asset management platform during 2026 and is pursuing the launch of the proposed Silvia ETFs. However, no revenue has been generated from asset management or ETF-related activities as of September 30, 2026, as the Investment Manager's registration has not yet become effective and the proposed Silvia ETFs have not commenced operations.

Cost of Revenue (exclusive of depreciation and amortization)

Cost of revenue (exclusive of depreciation and amortization) was $0.5 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was primarily driven by software licensing fees incurred for CFO Silvia related services.

General and Administrative Expenses

General and administrative expenses were $19.1 million for the nine months ended September 30, 2026, compared to $4.3 million for the period from June 10, 2025 (Inception) through September 30, 2025. The 2026 period reflects operations as a public company and inclusion of $9.4 million of payroll compensation (including a one-time signing bonus of $5.0 million for the Chief Technology Officer), $2.5 million of software licensing fees, $3.8 million of professional fees (including acquisition related expenses), and $3.4 million of other expenses, including insurance expenses. The inception period reflected only limited administrative activities as we had recently commenced operations then and had not yet developed the infrastructure, personnel base, and operational scale necessary to support our current business activities.

Depreciation and Amortization Expenses

Depreciation and amortization expense was $2.2 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was primarily attributable to the amortization of identifiable intangible assets recognized in connection with the CFO Silvia Acquisition.

Stock-based compensation

Stock-based compensation expense was $11.0 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was attributable to equity awards granted to employees and consultants under the 2025 Equity Plan.

Other Income (Expense), net

Other expense, net was $19.5 million for the nine months ended September 30, 2026, compared to other income, net of $104.7 million for the period from June 10, 2025 (inception) through September 30, 2025. The change was primarily attributable to unrealized losses on digital assets recognized during the 2026 period.

Unrealized gain (loss) on digital assets

Unrealized loss on digital assets was $17.7 million for the nine months ended September 30, 2026, compared to an unrealized gain on digital assets of $48.9 million for the period from June 10, 2025 (inception) through September 30, 2025. The change was primarily attributable to declines in the fair value of the Company's Bitcoin holdings during the 2026 period.

Realized loss on digital assets

Realized loss on digital assets was $6.2 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The loss was attributable to sales of digital assets during the 2026 period.

Change in fair value of Convertible Notes

Change in fair value of Convertible Notes conversion feature resulted in income of $0.9 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was attributable to changes in the fair value of the conversion feature embedded within the Company's Convertible Notes.

Realized loss on put option liabilities

Realized loss on put option liabilities was $0.9 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The loss was attributable to the settlement of put option liabilities during the 2026 period.

Gain on extinguishment of debt

Gain on extinguishment of debt was $5.9 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The gain was primarily attributable to the repurchase of a portion of the Company's outstanding Convertible Notes at a discount to the principal outstanding.

Interest and dividend income

Interest and dividend income was $1.0 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was primarily attributable to income earned on cash, cash equivalents, and investments held during the 2026 period.

Interest expense

Interest expense was $2.6 million for the nine months ended September 30, 2026, compared to $0 for the period from June 10, 2025 (inception) through September 30, 2025. The increase was primarily attributable to amortization of debt discount and debt issuance costs associated with the Company's Convertible Notes.

Change in fair value of derivative liabilities

Change in fair value of derivative liabilities was $0 for the nine months ended September 30, 2026, compared to income of $55.8 million for the period from June 10, 2025 (inception) through September 30, 2025. The decrease related to derivative liability recognized in the preferred units of ProCap BTC issued in connection with the preferred investment of ProCap BTC prior to the Business Combination. The conversion feature liability was no longer outstanding during the 2026 period.

Liquidity and Capital Resources

As of September 30, 2026, we had cash and cash equivalents of approximately $7.0 million and working capital of approximately $(87.4) million. The working capital deficit resulted primarily from the classification of the Company's outstanding Convertible Notes as current liabilities as of September 30, 2026 because the holders' contractual repurchase right is exercisable on June 5, 2027, within 12 months of the reporting date.

As of September 30, 2026, the aggregate principal amount of the outstanding Convertible Notes was $99.6 million. Although the Convertible Notes mature in December 2028, holders may have contractual repurchase rights that become exercisable beginning June 5, 2027. As a result, the Convertible Notes were classified as current liabilities as of September 30, 2026. See Note 7, Convertible Notes, for additional information.

As of September 30, 2026, we held approximately 5,035 Bitcoin with an aggregate fair value of approximately $420.7 million, a portion of which serves as collateral for the Convertible Notes.

As of September 30, 2026, we currently have no off-balance sheet finance arrangements other than the collateral arrangements associated with the Convertible Notes and approximately $8.3 million of unfunded investment commitments of the Initial Fund and the SPV Fund (collectively, the "Consolidated Investment Companies"), consisting of $8.0 million related to the SPV Fund and $0.3 million related to the Initial Fund.

We do not maintain any committed external sources of liquidity, including credit facilities or other financing arrangements. In evaluating our liquidity position, we considered our anticipated operating cash needs, the timing and nature of potential obligations under the Convertible Notes, our current cash and cash equivalents balance, and the availability of financing and capital-raising alternatives. While our Bitcoin is held for long-term appreciation, we also considered it in the overall evaluation of our liquidity position given its active trading market. As a result, a significant increase or decrease in the market value or liquidity of Bitcoin would impact our evaluation.

Based on these considerations, we believe the Company has sufficient resources to satisfy its obligations as they become due, including any obligations that may arise under the Convertible Notes.

In the near term, we expect to use available resources primarily to fund operating expenses, working capital requirements, investments in technology and infrastructure, and the development of our asset management and exchange-traded fund businesses, including registration and compliance costs, personnel and systems, the General Partner's capital contributions to the Initial Fund and seed capital, expense limitation or reimbursement obligations we agree to provide in connection with the Silvia ETFs, if any. As of the date of this Quarterly Report, we have not committed to provide seed capital to any Silvia ETF. We committed to investing in three privately held companies that had not yet been funded. Unfunded commitments totaled $8.0 million for the SPV Fund and $0.3 million for the Initial Fund. Amounts we commit to these businesses would not be available for our existing operations, debt service, acquisitions or other corporate purposes. We expect these costs to increase in future periods and to be incurred before, and substantially in advance of, any related revenue. In addition, we expect to pay aggregate severance of $1.5 million to our former Chief Financial Officer, Chief Operating Officer and Chief Legal Officer in equal monthly installments over the six months following their separations in October 2026.

Over the longer term, we may deploy capital to support strategic acquisitions, business expansion initiatives, investments in digital assets, and potential share repurchase programs. The timing and magnitude of these expenditures will depend on market conditions, the availability of capital, and strategic opportunities.

Based on our assessment of our anticipated operating cash needs, potential obligations under the Convertible Notes, financial position, and available financing and capital-raising alternatives, we believe that the Company has sufficient resources to satisfy anticipated working capital and operating requirements for at least the next twelve months.

Cash Flows for the Nine Months Ended September 30, 2026 and for the Period from June 10, 2025 (Inception) through September 30, 2025

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended September 30, 2026 and for the period from June 10, 2025 (Inception) through September 30, 2025 (In thousands):

		For the Nine Months Ended				Period from June 10, 2025 (Inception) through
		September 30, 2026				September 30, 2025
Net cash used in operating activities		$	(18,678	)		$	(704	)
Net cash used in investing activities			(8,254	)			(476,008	)
Net cash (used in) provided by financing activities		$	(160,943	)		$	476,712

Cash Flows Used in Operating Activities

Net cash used in operating activities was $18.7 million for the nine months ended September 30, 2026, compared to $0.7 million for the period from June 10, 2025 (inception) through September 30, 2025.

For the nine months ended September 30, 2026, net cash used in operating activities reflected the Company's net loss of $50.0 million, adjusted for non-cash items of $33.8 million. The most significant adjustment was $17.7 million of unrealized losses on digital assets resulting from declines in the fair value of the Company's Bitcoin holdings during the period. Changes in operating assets and liabilities resulted in a net use of $2.5 million of cash during the 2026 period.

For the period from June 10, 2025 (inception) through September 30, 2025, net cash used in operating activities was $0.7 million. Net income of $100.4 million, primarily attributable to unrealized gains on digital assets and gains recognized from changes in the fair value of the conversion feature liability of the Convertible Notes, was largely offset by non-cash fair value adjustments and changes in working capital accounts.

Cash Flows Used in Investing Activities

Net cash used in investing activities was $8.3 million for the nine months ended September 30, 2026. The use of cash was primarily attributable to $36.0 million of purchases of digital assets, $3.8 million of purchases of investments by the Consolidated Investment Companies, $1.3 million paid in connection with the CFO Silvia Acquisition, and $0.3 million of capital expenditures for property and equipment. These cash outflows were partially offset by $33.3 million of proceeds from sales of digital assets.

For the period from June 10, 2025 (inception) through September 30, 2025, net cash used in investing activities consisted primarily of $476 million of purchases of digital assets.

Cash Flows Used in Financing Activities

Net cash used in financing activities was $160.9 million for the nine months ended September 30, 2026. The use of cash primarily consisted of $119.2 million of payments to repurchase a portion of the Company's outstanding Convertible Notes, $38.7 million of treasury stock repurchases pursuant to the share repurchase program authorized by our Board of Directors on December 11, 2025 (the "2025 Repurchase Program"), $1.7 million of purchases of derivative securities, $1.7 million of tax payments associated with the vesting of restricted stock units, and $0.6 million of settlements of derivative securities. These outflows were partially offset by $0.9 million of proceeds received from derivative securities.

For the period from June 10, 2025 (inception) through September 30, 2025, net cash provided by financing activities consisted primarily of $476.0 million of proceeds from the issuance of preferred units of ProCap BTC in connection with the preferred investment of ProCap BTC prior to the Business Combination, which were used principally to fund the acquisition of digital assets.

Critical Accounting Policies and Estimates

Our Unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included elsewhere in this Quarterly Report are prepared in accordance with GAAP. The preparation of our Unaudited Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses, and related disclosure. We have based our estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We are subject to uncertainties such as the impact of future events, economic and political factors, and changes in our business environment; therefore, actual results could differ significantly from these estimates under different assumptions or conditions. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows could be materially affected.

We consider an accounting estimate to be critical if it requires assumptions about matters that were highly uncertain at the time the estimate was made and if changes in those assumptions, or changes in the estimate that are reasonably likely to occur from period to period, would have a material effect on our financial condition or results of operations.

Our critical accounting estimates are described in the Annual Report. During the nine months ended September 30, 2026, we identified the following additional critical accounting estimates as a result of the CFO Silvia Acquisition.

Business Combinations

We account for acquisitions in accordance with ASC 805, Business Combinations. The allocation of purchase consideration to the assets acquired and liabilities assumed requires significant estimates and management judgment, particularly with respect to the valuation of identifiable intangible assets, contingent consideration arrangements, estimated useful lives of acquired assets, and certain tax-related matters.

The valuation of acquired intangible assets and contingent consideration involves the use of significant assumptions, including projected future cash flows, royalty rates, customer attrition rates, discount rates, expected volatility, and other market-based inputs. Changes in these assumptions could materially impact the amounts assigned to acquired assets and liabilities, the resulting amount of goodwill recognized, and future amortization expense. In addition, because the purchase price allocation remains subject to measurement period adjustments, future revisions to estimates may result in changes to the recorded amounts of assets acquired and liabilities assumed.

Share-Based Compensation

We account for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation. The determination of the grant-date fair value of certain share-based awards requires significant judgment and the use of valuation models, particularly for awards containing market-based vesting conditions.

Valuation of these awards requires management to develop assumptions regarding expected stock price volatility, expected term, risk-free interest rates, dividend yield, and other market-based inputs. Changes in these assumptions may significantly affect the estimated fair value of awards and, accordingly, the amount and timing of compensation expense recognized in future periods.

See "Summary of Significant Accounting Policies" described in Note 2 to our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for a description of our significant accounting policies.

Off-Balance Sheet Arrangements

Other than collateral arrangements associated with the Convertible Notes and the unfunded investment commitments of our Consolidated Investment Companies described in Note 13, Commitments and Contingencies, to our Unaudited Condensed Consolidated Financial Statements, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

Recent Accounting Pronouncements

See "Recent Accounting Pronouncements" described in Note 2 of our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Emerging Growth Company Status

We are an emerging growth company ("EGC"), as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we(i) are no longer an EGC or (ii) affirmatively and irrevocably opt-out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, the Company intends to rely on such exemptions, it is not required to, among other things: (i) provide an auditor's attestation report on its system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer's compensation to median employee compensation.

We will remain an EGC until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock that is held by non-affiliates is $700 million or more as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.

Bitcoin Market Price Risk

Our Bitcoin investment is measured using observed prices from active exchanges and adjustments are recorded in net income through "other income (expenses), net" in our condensed consolidated statements of operations. The Bitcoin market price may fluctuate significantly and a decline in the market price of Bitcoin could result in a material adverse effect on our financial results in future periods. See the risk factors included under the heading "Risks Related to Our Business and Bitcoin Treasury Strategy" in our Annual Report for more information regarding the risks related to our Bitcoin holdings. As of September 30, 2026 and December 31, 2025, the fair value of our Bitcoin investment included in digital assets was $420.7 million and $441.8 million, respectively. For the nine months ended September 30, 2026, we recognized an unrealized loss from the remeasurement of our Bitcoin holdings of $17.7 million.