HYPD

Welcome to the Hyperion DeFi 2026 second quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Jason Assad, Director of Investor Relations. Thank you. You may begin.

Good afternoon and welcome to Hyperion DeFi's 2026 second quarter earnings call. Joining me today are CEO Hyunsu Jung and CFO David Knox. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the IR section of our website at hyperiondefi.com. We will also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on the website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

We will start this afternoon's call with prepared remarks from Hyunsu and David, followed by Q&A. I will now turn the call over to our CEO, Hyunsu Jung.

Thank you, Jason. To those joining us today, welcome to Hyperion DeFi's second quarter 2026 earnings call. A little over a short year ago, Hyperion DeFi was born from what was formerly Eyenovia, Inc. What once was is no longer. At Hyperion DeFi, we revamped the company's operating strategy to the accumulation of HYPE and directly building in the Hyperliquid ecosystem. We made a firm commitment that we would be more than just HYPE, benefiting from not just holding the asset, but uniquely building multiple businesses atop it that have the potential to utilize it profitably, and most importantly, independent of its underlying price volatility. I am proud to say that we are continuing to deliver on that promise. To that end, our focus has been on developing unique products and services that actively support the growth of the Hyperliquid ecosystem and return that value to our shareholders.

Our model is no longer a concept that we ask investors to envision, it has become reality. We continue to lead in designing and deploying strategies that generate differentiated revenues, not just on our HYPE holdings, but across key on-chain infrastructure, each compounding alongside the fastest-moving ecosystem in the digital asset space. I am most excited to share these developments, covering not just what was accomplished in Q2, but the updates that are happening in real time, which we believe demonstrates our standalone positioning, unique value proposition, and best-in-class business model. At the same time, this was a quarter that truly tested our model. With rapid innovation often comes changes that are challenging to predict and requires a level of adaptivity that can only be found in an agile operation like ours.

To address this directly, in May of this year, USDH, the native stablecoin of Hyperliquid, was replaced with USDC, resulting in the wind-down of two of our core HYPE deployments, accounting for 800,000 HYPE and impacting our planned revenue roadmap. Regardless, the ability for an operating company to respond to change in real time is exactly what distinguishes it from a passive vehicle. We are proud to have been able to respond and adapt within weeks and enter the third quarter with stronger, more durable platforms, which we will cover today. I am grateful for the continued support of our investors and partners as we work diligently to lay foundations that persist and scale with the growth of Hyperliquid. What we are doing has never been done before, and we firmly believe we are asymmetrically positioned to accomplish this, resulting in long-term value creation for our shareholders.

I will start, as always, with the Hyperliquid ecosystem. Hyperion's opportunity surface scales with Hyperliquid's execution, and this is one of the most consequential quarters in the ecosystem's history. We saw Hyperliquid cross a milestone that few blockchains have ever approached. Cumulative protocol revenue surpassed $1 billion, with the overwhelming majority of protocol fees continuing to be returned to the token holders through the assistance fund's buyback mechanism. During the quarter, HYPE reached a new all-time high, and the holder base has continued to broaden, especially with institutions via the launch of various HYPE ETFs. This broader global adoption was accelerated by the continued growth of HIP-3 builder-deployed markets. The permissionless perpetuals framework for real-world assets now represents over half of daily network trading activity, and the deployer set continues to institutionalize.

The core team's progress on unified accounts continues, moving the network toward a single account for spot, perpetuals, and outcome exposure. We are already seeing the impacts of this design. Just earlier this week, xStocks, the tokenized equity framework built by Payward, the parent company of Kraken, launched native spot equity markets on HyperCore, enabling on-chain trading for five major equities and ETFs backed one-to-one by real shares. The tokenized assets include Nvidia, the S&P 500 ETF, QQQ, SK hynix, and Micron. This allows on-chain traders to not only access spot equity markets 24/7, but also the ability to use these assets as collateral for DeFi on the HyperEVM, where we have spent an extensive amount of time building institutional infrastructure. Perhaps most exciting is that Hyperliquid's newest primitive, HIP-4 outcome markets, completed its first full quarter on mainnet.

Launched in May, outcome markets generated approximately $100 million in volume in the first month alone and validated the value and structural advantage of a unified financial layer. Outcome contracts on Hyperliquid trade on the same order book in the same account with materially lower fees at market midpoints than incumbent prediction market venues. In late July, subsequent to quarter end, permissionless HIP-4 deployment reached testnet. Under the framework, each outcome market deployer must stake 500,000 HYPE for the duration of activity. Every new market category on Hyperliquid now creates structural locked demand for the core asset on our balance sheet, which grants us continued opportunities for deployment optimization. Each of these developments compounds the others as Hyperliquid continues to execute its vision of becoming the blockchain to house all finance. In parallel, Hyperion continues to position ourselves as the premier institutional gateway to DeFi innovation within Hyperliquid.

In this quarter, we focused on repositioning our DeFi monetization strategy following the sunset of USDH and a clearer path to permissionless deployment on HIP-4. May was a massive month for Hyperliquid as the ecosystem aligned with Coinbase and Circle on the AQAv2 standard, establishing the path for 90% of the USDC stablecoin revenue to flow back to the Hyperliquid Assistance Fund, ultimately returning value to HYPE holders. Although it greatly benefits our balance sheet holdings, the resulting sunset of USDH created unexpected headwinds for our operating businesses. As we announced in June, Native Markets made the decision to sunset USDH, and the Felix Exchange markets also winded down as settlement across Hyperliquid migrated towards USDC. We reiterated our guidance at the time of that announcement, and we reiterate it again today because the financial impact was immaterial, manageable, and our strategic response was swift.

This is the nature of operating in a fast-moving ecosystem. Individual products will come and go. What endures is our position as a partner builders come to first, and that position was demonstrated within weeks. Just after quarter end, we announced our agreement with Skew Technologies to launch permissionless markets on Hyperliquid, including an institutional listing service. With Hyperliquid's recent HIP-4 announcements in July, we and the Skew team have determined that Hyperion's 500,000 HYPE stake would be better positioned for HIP-4 outcome markets. This structure succeeds and strengthens our permissionless market strategy, pairing our staked HYPE deployment capacity with a team purpose-built for onboarding new market categories to Hyperliquid. We expect these markets to go live in the coming months with economics that improve upon our prior deployer arrangement, in addition to long-term equity and token exposure to Skew.

The early metrics are positive, with over 40,000 unique users signed up to access Skew's private beta. We didn't stop at just one new permissionless markets deployment. We also announced today as part of this release, another HAUS agreement with 500,000 of our staked HYPE supporting Entropy, an upcoming HIP-3 deployer. Not only does this provide Hyperion multiple opportunities to both support and scale unique businesses on Hyperliquid, but it allows us to converge the building blocks we are developing alongside our partners in this ecosystem. Hyperliquid aims to become the blockchain to house all finance, offering a unified substrate for all forms of financial products, including RWAs, perpetuals, outcomes, and more. I wrote at the beginning of the year that tokenization and the adoption of agentic trading would be key components of driving more financial activity on chain, and that has continued to be the case.

Note, for instance, according to the State of Hybrid Finance report from CoinShares and Token Terminal, deposits into lending platforms and DEXs more than tripled year-over-year to $7.4 billion, driven by utilization of RWAs such as tokenized treasuries, private credit, and gold tokens as collateral. We had long been preparing for this shift to occur. Early in the third quarter, we completed our first institutional credit deal through HyperLend Aviya platform, lending 1 million USDC against natively staked HYPE at a rate of 8% APY, far above the overnight rate found in traditional markets. The HYPE collateral remains in secure custody at Anchorage Digital for the duration of the loan. We expect the Aviya platform to scale as demand grows for institutional borrowing and lending against robust collateral, and we are entitled to a revenue share on a portion of future activity on Aviya.

The value of natively staked HYPE continues to be demonstrated as our HYPE Asset Use Service scaled across other clients. Silhouette completed its migration to production during the quarter, and we saw monthly volumes step up from the hundreds of thousands toward over $40 million cumulative, consistent with the trajectory we outlined in May. This was driven by Silhouette's support for RFQ trading, which we expect to accelerate on Hyperliquid as more assets become tokenized and move on-chain. While positioning for this shift, we maintain our pipeline of prospective HAUS clients and continue to be selective, prioritizing structures that return durable volume-linked value to our supported markets. Yield enhancement saw over 50% growth this quarter, supported by HYPE's realized volatility remaining elevated throughout the quarter, including the run to new all-time highs in June and subsequent consolidation. Our systematic approach focused on converting volatility into income.

The program continued to operate within the disciplined risk framework we have described previously: position caps, strike selection anchored to technical structure, and no compromise of our long-term HYPE position. As we operate those strategies internally, we continue to work in parallel with our efforts to expand yield infrastructure built on Rysk, our partner in offering institutional-grade vault strategies known as Rysk Premium. As a result of these efforts, our accumulated Rysk Points continue to grow this quarter, placing us in the top 50 holders and preserving our claim on future protocol incentives. Rysk Premium launched publicly in June, bringing institutional-grade covered call and cash-secured puts vaults fully on-chain while also expanding their smart contract infrastructure to Ethereum Mainnet, demonstrating the ability of our partners to not only succeed in Hyperliquid, but also distribute products cross-chain.

In addition, Rysk announced support for XAUT, Tether Gold, which is a digital token backed by physical gold, showing the first steps towards support of broader RWAs. We are optimistic for and await rulemaking for on-chain markets, crypto vaults, and blockchain settlement infrastructure. We expect additional clarity for on-chain vaults to be critical to driving more institutional adoption of strategies such as Rysk Premium. With further guidance, we position to open up our vault strategies to other depositors and curators, expanding the availability of our on-chain infrastructure. Ecosystem rewards remain variable, but we maintain a positive outlook for the ecosystem tokens we will receive through the remainder of the year. As mentioned earlier, our ecosystem engagement efforts have expanded beyond token representation of the protocols we believe have long-term potential. Hyperion DeFi has now acquired equity positions to various protocols for the benefit of our shareholders.

We continue to deliver on another core objective: to create long-term value for the Hyperliquid ecosystem while simultaneously providing streamlined, comprehensive access to all the valuable components built there. Lastly, on our Hyperion validator operations, in June, we announced our partnership with Blockdaemon to expand institutional Hyperliquid staking. Blockdaemon is trusted by more than 400 institutions, and this partnership opens an additional channel to the institutional HYPE delegation demand we expect as Hyperliquid's profile grows. Perhaps more importantly, we continue to explore opportunities to generate income by building on top of our existing infrastructure. One that is beginning to emerge is a way to leverage our validator infrastructure to provide data services for traders on Hyperliquid. We will share more as things are finalized.

If it hasn't been clear by now, we will continue to build and pioneer on-chain, uniquely positioning our assets and designing partnerships unlike any other team in this space. Opportunities that didn't exist three months ago are real now. Imagine the possibilities of what may come as Hyperliquid continues to dominate on-chain finance. I'll now hand it over to our CFO, David Knox, to give highlights on our financial performance.

Thank you, Hyunsu. In June of 2025, we set out to establish a new kind of company, one which is blockchain and DeFi-native and shares in multiple frontiers of value creation at the same time. Those three frontiers include our growing HYPE treasury, our scalable DeFi businesses, and our embedded economic upside in the Hyperliquid ecosystem, and we call this our HYPEd Triple Dip strategy. In our 12 months of operating performance, we have redefined what it means to be a digital asset treasury. Not only have we substantially grown our treasury position in HYPE, but we have launched multiple businesses and built new products and services on Hyperliquid, all while reducing our costs over time. As promised since day one, we are well on our way to becoming a profitable, positive cash flowing operating company by year-end. Here's our 12-month highlights.

Since June of 2025, our gross HYPE tokens have increased 56%, from 1.31 million to 2.04 million HYPE tokens. From Q3 2025 to Q2 2026, our quarterly adjusted gross profit has grown 162%, from $0.4 million to $1.2 million as our DeFi businesses have begun to ramp. We have consistently earned 2x-3x base HYPE staking yield over several quarters. Meanwhile, our core operating expenses have declined 46%, from $4.3 million to $2.3 million as our legacy biotech segment has been wound down. Also, our quarterly operating cash outflows have declined from $2.8 million to $2.1 million, both as a function of reduced costs and ramping DeFi businesses. Our adjusted gross profit over the past two quarters has been 40%-50% denominated in cash, and we've received equity or token upside in four early-stage builders on Hyperliquid, including Kinetiq, HyperLend, Silhouette, and Skew.

We are also pleased to announce today that we executed a sale of our remaining biotech IP assets to Arctic Vision in July. Our promise on our first call was that we would pursue the monetization and resolution of certain no-longer-core assets, and that is now accomplished. From July 2025 through July 2026, in total, we extinguished $2.7 million of legacy biotech liabilities, not from us paying down liabilities with cash, but from actively working with partners, including Arctic Vision, to release what we owed without cash consideration. With the past behind us, we are now solely a DeFi company. Now on to our Q2 results. Our Q2 adjusted gross profit grew 20% quarter-over-quarter, from $960,000 to $1.2 million. 50% was earned in cash, and we achieved 2.2x base staking yield. The 20% quarterly growth rate in Q2 compares to 17% growth achieved in Q1 versus Q4.

This quarter demonstrated the benefit of our five diversified DeFi income sources, where headwinds in some areas were offset by tailwinds in others and the overall growth trajectory remains positive. I will now go through each of those five segments. Starting with staking yield. In Q2, we earned $527,000 from staking our HYPE to our Kinetiq X Hyperion validator. This was up 69% quarter-over-quarter, driven by the increase in the price of HYPE from an average of 30.8 over Q1 to 51.2 over Q2. Next, validator commissions. In Q2, we earned $42,000 in validator commissions from third-party tokens delegated to our validator, up 4% versus $40,000 last quarter. In Q2, consistent with Q1, we continue from a GAAP perspective to present our validating activities on a net basis in accordance with the treatment that we are agents of the validator.

As Hyunsu mentioned, we recently announced a partnership with Blockdaemon, one of the largest institutional crypto platforms, where they have chosen us to be their staking partner on Hyperliquid. We continue to see multiple opportunities for validator growth driven by the products and services we are creating, plus demand from institutions for world-class validator infrastructure. In total, in Q2, we earned about 11,000 HYPE tokens from staking and validating, in line with what we earned in Q1. Next, our yield enhancement strategies, which primarily monetize volatility on HYPE, including in our vaults with Rysk, generated $334,000 of adjusted gross profit in Q2, which is +58% quarter-over-quarter versus $211,000 in Q1. Our DeFi monetization segment captures a host of products and services we are building on Hyperliquid together with our partners.

This quarter, we had a 36% decline in DeFi monetization from $245,000 in Q1 to $158,000 in Q2, largely driven by the sunset of the USDH stablecoin announced in mid-May, resulting in our HAUS agreements with both Native Markets and Felix being terminated in June and opening up 800,000 of our HYPE tokens to be redeployed into other business opportunities. While we still earned base staking yield on these 800,000 tokens, these wind downs resulted in a Q2 decline in DeFi monetization. Despite this headwind, in June, we chose to announce that we stood by our existing guidance based on our robust pipeline to redeploy our HYPE. As outlined by Hyunsu, we have regained momentum since then. We have already redeployed 1 million HYPE tokens into new HAUS partnerships in Q3, and we expect our new deployments over time to position us better than before.

Ecosystem rewards generated $90,000 of adjusted gross profit in Q2 versus $150,000 in Q1. We stated previously that we expect the quarter-over-quarter change in ecosystem rewards to be volatile, given the unexpected timing of airdrops, token generation events, and other rewards activity. However, this is now the third consistent quarter of activity in this segment, and it continues to be a core part of our triple dip strategy. The Q2 figure reflects two pieces. First, our receipt and subsequent sale of MAX tokens received in an airdrop. Second, a one-time grant from Felix denominated in USDC due to the sunset of USDH. We are also announcing that as part of the July HAUS agreement with Skew, we have the right in the future to 5% of Skew equity and 5% of tokens, should they choose to pursue a Skew TGE.

Our list of ecosystem positions we've accumulated over the past year continues to grow. In Q4, we received 1.92 million KNTQ tokens from Kinetiq. Since then, we have been liquid staking our KNTQ, recently at annual yields exceeding 7%, and have accrued over 40,000 additional KNTQ tokens thus far in 2026. Since we continue to earn Kinetiq points, we expect to be eligible for their next airdrop, which has been announced for Q4 of this year. In Q1, we received 10 million HPL tokens from HyperLend as part of our various partnerships previously discussed. In Q1, we also gained the right to receive 1% future token or equity in Silhouette. We are also earning Rysk Points from our vault activity and may become eligible for future Risk tokens. We expect this list to continue to grow as we deepen our partnerships and relationships across the Hyperliquid ecosystem.

As a reminder, we didn't pay anything for these tokens. We have only paid for HYPE, and we believe the upside we have to the broader Hyperliquid ecosystem is unique among any other U.S. public company. Moving on to our Q2 expenses. Operating expenses, excluding stock-based compensation, declined 21% quarter-over-quarter, from $3.0 million in Q1 to $2.3 million in Q2. As a reminder, the Q2 figure of $2.3 million is about half the $4.3 million we spent in Q3 2025, our first quarter since adopting the new DeFi strategy. The reduced costs speak to our light operating model, offering strong earnings leverage. We substantially wound down all operations related to our legacy biotech segment in the second quarter. With the past behind us, we continue to be laser focused on all cost components as our DeFi businesses evolve and scale.

On the treasury side, our gross HYPE tokens increased from 1.94 million in Q1 to 2.04 million in Q2. The price of HYPE increased from 36.6 at the end of Q1 to 65.0 in Q2. This compares to our aggregate purchase price on HYPE tokens of 39.7, meaning the value of our HYPE treasury at $133 million as of Q2 exceeded our cash basis of $81 million by approximately $52 million. Our net asset value, which adjusts our treasury value for net cash and debt, increased from $70 million as of Q1 to $134 million as of Q2. Treasury gains was $54.8 million in Q2 as the price of HYPE increased, versus a gain of $21.5 million in Q1. In totality, Q2 net income of $31.0 million, another record for the company, compares to Q1 net income of $8.8 million.

Q2 adjusted EBITDA of $53.7 million compares to Q1 adjusted EBITDA of $19.5 million. As with Q1, the primary Q2 reconciliation of net income to adjusted EBITDA is our HYPE liquid staking tokens, or LSTs, for which the GAAP carrying value is the low-water mark price of HYPE. If all our HYPE LSTs were converted back to HYPE at the end of Q2, we believe it would have increased our GAAP net income by approximately $33.2 million. Regarding our cash flows and cash position, as a DeFi company, we have been and expect to continue to be very active with on-chain stablecoin activity, which involves USDC, historically USDH, deposits into our vault, and potentially other activity in the future as we grow. However, stablecoin-based balances and activities are not presented as GAAP cash, and this has caused some period-to-period volatility in our GAAP presentations of cash flows.

Starting today, we are now also presenting two new non-GAAP metrics, adjusted net operating cash flow and adjusted net investing cash flow, with the goal of removing the volatility caused by our stablecoin forward operations. These are all more fully defined and reconciled in our earnings release and earnings supplement available online. Adjusted net operating cash flow was $2.1 million of outflows in Q2, which compares to $2.6 million outflows in Q1. Adjusted net investing cash flow was $6.2 million in Q2 versus $1.5 million in Q1, as we continue to grow our HYPE Treasury position. Net cash provided by financing activities was $11.0 million in Q2, primarily from our May public offering, versus $6.6 million in Q1. As of Q2, we hold $11.8 million in cash equivalents, and stablecoins versus $9.1 million as of Q1. As of August 10th, our common share count is approximately 15.5 million shares.

Looking ahead, in our first earnings call under the new DeFi strategy in November 2025, along with our ambitious goal to create a new kind of operating company, we set out ambitious financial goals, which we continue to stand behind as we innovate and grow our businesses. We originally gave guidance of $4 million-$6 million of adjusted gross profit for 2026 and raised that guidance in May to $5 million-$7 million. In addition, we anticipate our adjusted net operating cash flow to flip positive by the end of the year, and that's what we have been communicating since day one. We continue to be confident in achieving that guidance based on our delivery of consistent quarterly performance, including growing businesses, declining costs, and improving cash flows.

We believe we have the right team, partners, and resources, and the right chosen blockchain in Hyperliquid to achieve these goals. Every day, we remain squarely focused on continued execution, driving value for shareholders over time, while helping to build Hyperliquid into the blockchain to house all of finance. As Hyunsu said earlier, our model is no longer a concept that we ask investors to envision. It has become a reality that stands alone among public companies. We believe the results will continue to speak for themselves. With that, we look forward to answering your questions.

We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Gareth Cassetta with Cantor. Please proceed with your question.

Hey, guys. Thanks for taking the question. You were very quick to kind of reallocate your HAUS deployments to Skew and Entropy. I was wondering if you could talk about how much of a ramp you're expecting from those new deployments in the back half of this year, and if any of that might be baked into guidance. Also how we should think about the pipeline going forward, if you guys have any additional HYPE kind of sitting idle to do more deployments or if you'd have to kind of find a new allocation for that.

Hey, Gareth. Thanks for the questions. I would say that one of our core functions is to continuously have conversations with teams that are either directly building on or looking to come to build on Hyperliquid. A large part of our ability to pivot so quickly was maintaining those relationships and ensuring that our diligence was robust to ensure that these were the right products to launch through our deployment product HAUS. We expect them to ramp relatively quickly with Skew. Their institutional listing service that we're calling Partner Markets is designed to onboard more bespoke products that are not yet listed on Hyperliquid and have them trading relatively quickly, and that's obviously contingent upon the roadmap for permissionless HIP-4.

With Entropy, HIP-3 is already live and we expect the team to start very quickly. We have actually staked the 500,000 HYPE today, and it'll be working on getting the deployer set up. In terms of the longer-term roadmap for this year, we want to see these teams scale their revenues and obviously directly contributing to Hyperion. We'll continue to have conversations either through our listing service or bespoke deployments for individual permissionless markets.

Great. Thank you. Then just a quick one on your validator business. I am wondering if you could provide how much of the 11.1K total HYPE you guys earned was from the validator business. Did you guys see any uplift from the early days of the integration with Blockdaemon? How are you thinking about potential future integrations?

Thanks so much for the question, Gareth. In terms of the commissions earned from validating in isolation, it was about 500 tokens from validating, meaning the majority of our tokens earned in HYPE were from our own native staking. The partnership with Blockdaemon, while announced, is expected to ramp throughout the quarter and into next. I think that the platform that we have set up we believe to be world-class for a number of reasons, right? Kinetiq is the number one liquid staking protocol on Hyperliquid, which means that it is functionally attractive for multiple reasons. The partner that we have on the infrastructure side, Pier Two, who was purchased by MAVAN, owned by Bitmine, one of the largest players in validating across multiple blockchains and a very large player among institutions.

Essentially what happens, and this is what happens with Blockdaemon, like every other financial service product, institutions really care about who they are working with, why they are working with them. They care about the track record, the compliance, the reporting, of course, economics and overall reliability and dependability. Blockdaemon is just the first institutional partnership that we have, and we are expecting others to follow. It is part of the broader trend on Hyperliquid more broadly, where, of course, it has achieved such a large market share of overall crypto activity and financial activity, but so much is still not yet accomplished of institutional adoption. When that shifts, even more balances will flow, even more institutions and other participants will be active. We think, and we believe, and core to our thesis is that they will want to be active with world-class institutions such as ourselves.

Awesome. Thanks for the color, guys, and good quarter.

Thank you, Gareth.

Our next question is from Brian P. Vieten with Siebert. Please proceed with your question.

All right. Thanks, guys. A nice job at the summit in July. I was able to catch it online. Sorry I missed it. In the past, you guys spoke to HIP-4 as kind of a potentially larger opportunity than HIP-3. Is that still how you guys see it?

Hey, Brian. Great to hear from you. Yeah, absolutely. We think that the trend, there is obviously so much that is going on right now, both in the political sphere and the financial sphere with regards to prediction markets, perpetuals, and the changing nature of financial systems moving on-chain. Net-net, we think that there are so many ways to not only directionally express beliefs through markets and prediction markets or outcome markets captures that the best. The advantage with Hyperliquid as a unified settlement layer for all financial services or systems is the fact that you will be able to not only access spot for perpetuals and outcome markets all in that same settlement layer.

Our belief from the Hyperion perspective is that we can not only support perps, which we have already, but also find teams on the outcome market side as HIP-4 moves to permissionless and basically establish infrastructure that enables all of these to functionally grow as a result of volume generally increasing. The other trend that we are seeing is the tokenization of real-world assets, and that continuously drives more utilization, not only to the HyperCore platform but also to HyperEVM. That means that you have many verticals that are using these financial primitives to not only satisfy the use of DeFi in addition to having that collateral to utilize it for outcome markets. Net-net, we think that we are just beginning to scratch the surface of what is possible when you have infrastructure like Hyperliquid.

That is great. We will see some elections or something like that later in the year. Just two other quick ones, hopefully. So great to hear the quick pickup from winding down the Felix relationship. I guess could you guys contextualize the pipeline a little bit more? It seems like the longer, the better, the more volume and activity, the better. Maybe so long as the pipeline is there, it is a relatively costless, painless switch. That is the beauty of the tokens themselves, but I guess how sticky are these folks? How long might someone be in the pipeline ready to go before maybe they go try and find another avenue? Do you guys have a couple of months or some amount of timeline to be able to find a way to work together? Does that make sense?

It varies by each deployer. We take our diligence process very seriously, and I would say that both Skew and Entropy have been well capitalized. They have been participants in the markets for a long time, and we looked at their methodology both for perps and outcome markets and felt very confident in their ability to create products that traders want to trade, both at the retail and institutional level. When it comes to deal structures, I would say the base minimum requirement at the Hyperliquid platform level is 6 months, but we do design longer-term deal structures and again, have revenue share and equity exposure to our partners. So if they are able to generate substantial revenues and use it to allocate to their own HYPE stake, then that is perfectly fine. We still have exposure to their long-term success.

Realistically, for teams that are building new infrastructure, they should be allocating that capital towards the growth of their own product and distribution. That is why we feel very confident in our ability to not only position Hyperion as the bonded capital layer for these deployers, but with products like Partner Markets, with institutional listing services, we can scale both horizontally and vertically. So that is how we think about long-term deployments of HYPE. Again, our unique offering in this market is that we are not just a HYPE holder and provider, but we have also built primitives across the HyperEVM and have services like the HYPE Asset Use Service for fee reductions to offer to traders. So we offer this cohesive partnership-based product that is what enables us to not only engage with, but work long-term with the best builders in the ecosystem.

Okay, that is great. That kind of answers this next one, but just quick housekeeping. I think you guys might have hit on it, but how much of the token holdings are ready to rock as far as deploying to new strategies? Can you just talk about the balance between, hey, let us get out there and track down more tokens to marry them with all the folks in the pipeline versus, hey, it is more about getting the right partnerships, sort of, I guess, quality versus quantity. Could you just talk about the balance a little bit?

Sure. I guess it should be relatively clear, right? We faced a headwind, unexpected event with USDH sunset, and within a month, we were able to deploy more HYPE than we had actually had to undelegate and have built better economic structures. There is a lot of flexibility that we have, and it is the same thing that attributes to our increasing cost efficiency in terms of our operating structure. We are able to use these digital assets most optimally and are able to find the best deal structures that enable long-term growth. When it comes to, again, going to market, most of these times, the teams are coming to us, and we have a lot of privilege to be able to identify the best teams and work with them closely to support the growth of Hyperliquid ecosystem, but also generate and establish long-term revenue opportunity.

It is about maintaining the flexibility around the asset, and then obviously it is critical for us to be able to continue to accumulate and redeploy HYPE and optimize the yield that is possible in the ecosystem.

That is great. Well, you guys are going to lead the charge there, so I had to ask. Thanks again, guys.

Once again, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Jim McIlree with Chardan Capital Markets LLC. Please proceed with your question.

Yeah, thanks a lot. Good evening, guys. I would like to figure out how you get to the adjusted gross profit guidance. You did two in the first half, so you need three, four in the second half, and it is a pretty big jump from Q1. The staking, it looks like it is really driven by the price of the token more than anything else. The delta has got to come from something else, and I am assuming that it is DeFi monetization. Is that true? Secondly, it sounds like it is really going to be more fourth quarter loaded than third quarter loaded. Is that true?

Thanks so much, Jim, for the question. I think when you consider that we had two major partnerships wind down in the second quarter, both impacting DeFi monetization, yes, it is certainly logical to extrapolate that that is where we will have the most recovery and growth following through, both from the partnerships that we have announced and potentially future activity through the remainder of the year. So DeFi monetization should be a large source of growth. Ecosystem awards, to the extent that there are airdrops or other awarded tokens and equity positions could contribute quite a bit. Your point on staking is correct. That is fairly linear to the number of tokens that we have and the price of HYPE. I think that sitting here today, we certainly continue to feel very, very confident in the guidance that we have.

I think that we expect to continue to grow every single quarter. There are reasons why there could be variability, but we expect Q3 to be strong and Q4 to potentially be stronger. But there are a lot of reasons why Q3 might end up stronger than Q4, and vice versa. As you can imagine, as part of our broader triple dip strategy of owning tokens and sharing in the upside in businesses and sharing in the upside in the equity of the various protocols and companies that we support, it supports a long-term way of operating, and that is how we aim to position ourselves for the benefit of shareholders. So quarter-to-quarter numbers are going to continue to be volatile. It is the nature of the way that we operate, and it is the nature of the broader digital assets in the crypto space.

I think that how you've described it is a fair overall sense for where things could land.

Great. Just two more. I'll ask them at the same time. One is the Kinetiq staking yield, is that reported in ecosystem rewards? Secondly, with the sale of the legacy healthcare to Arctic Vision, do you get any significant reduction in operating expenses from the Q2 levels?

Great questions. The additional staking on Kinetiq, where we have our KNTQ staked into sKNTQ, and are continuing to earn yield, we view that as DeFi monetization. As I mentioned earlier on the call, we've accumulated about 40,000 tokens while these tokens continue to be liquid staked. So that is where that is and will continue to be. In terms of the sale to Arctic Vision, Q2, obviously, we saw a substantial decline in our costs from $3.0 million to $2.3 million. However, that doesn't reflect a full quarter of the legacy segments as being run off. So we would anticipate even further declines, Q3 versus Q2, to have a full quarter of lower personnel costs, patent, IP maintenance, and things of that nature.

Can you just frame that in terms of how big that decline might be? Maybe a range.

Sure. I think that an incremental reduction of anywhere between 10%-20% versus the run rate of the core expenses, excluding stock-based compensation, I think would be a good measurement of success for us. Again, keeping that in context, the first quarter that we started Q3 last year, it was $4.3 million, Q3 2025. So we've already reduced to close to half and getting under half of where we started of overall run rate cash would be a great success. Then going to an earlier question, we can do all of these activities with a fairly low enduring cost base. It's infrastructure that we've built. It is legal framework that we have developed, that we've obviously cleared through all of our reporting infrastructure and governance procedures.

This kind of growth can happen only because of scalable blockchain technologies, and in particular, the blockchain that we've chosen, which is Hyperliquid. So yes, you should continue to see declining costs as we saw this quarter-over-quarter, and continue to see further optimization from here as we're laser-focused on how we scale.

Got it. Thanks a lot. Well done, guys.

There are no more questions. We will now turn the call back over to Hyunsu Jung for closing remarks.

Our second quarter was defined by two things, resilience and expansion, supported by sound operating processes and flexible pioneering partners. When the ecosystem shifted, we adapted within weeks and came out with stronger economics and better infrastructure than we had before. That is a core mandate as a true operating company, and today's results reflect it. What excites us most is what's to come. Hyperliquid crossed $1 billion in cumulative revenue this quarter and opened an entirely new frontier in outcome markets, one where existing perpetual infrastructure operates in a unified financial system and where Hyperion is positioned at forefront. From validator operations and the HYPE Asset Use Service to institutional volatility and credit products on the HyperEVM to the next generation of markets on HyperCore, the foundations we spent the past year laying are becoming the infrastructure this ecosystem runs on. Each business line feeds the flywheel.

Revenue tied to utilization, rising value across our partner protocols, and more HYPE bought back and burned. As that flywheel accelerates, so does the global adoption of Hyperliquid, bringing new users, new products, and new capital to the ecosystem we serve. While a passive treasury experiences Hyperliquid's evolution as price volatility, Hyperion experiences it as a pipeline. That is the difference we set out to build, and our objective is to keep proving that each quarter to come. As large shareholders ourselves, our goals have been and always will be directly aligned with yours. We only win if you win. Every decision we make, every partnership, every deployment, every dollar of capital is optimized for that outcome. To our investors and partners, thank you for your continued support as we build the premier institutional gateway to Hyperliquid. Thank you.

This concludes today's teleconference. You may now disconnect.

Greetings. Welcome to the Hyperion DeFi 2026 first quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Jason Assad, Director of Investor Relations. Thank you. You may begin.

Good morning, welcome to Hyperion DeFi's 2026 1st quarter earnings call. Joining me today are CEO Hyunsu Jung and CFO David Knox. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the IR section of our website at hyperiondefi.com. We will also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on our website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

We will start this morning's call with prepared remarks from Hyunsu and David, followed by Q&A. I'll now turn the call over to our CEO, Hyunsu Jung.

Thank you, Jason, and good morning, everyone. Welcome to Hyperion DeFi's first quarter 2026 earnings call. In our first earnings call as Hyperion DeFi, we made a promise stating that we would set ourselves apart from other digital asset treasury companies with our comprehensive ecosystem engagement strategy. At the time, it may have been difficult for investors to understand the concept of DeFi, let alone the idea of a public company using these strategies to generate revenue. We are off to a strong start of the year, continuing to distance ourselves from the crowd, fulfilling past promises resulting in measurable growth across our core proficiencies, positioning ourselves in parallel with the rapid innovation from the Hyperliquid core team. We have seen over the past few months that Hyperliquid continues to execute on its vision to become the blockchain to house all finance.

HIP-3 markets now account for almost 50% of Hyperliquid's daily average trading activity, an incredible testament to the product market fit of a unique on-chain primitive launched only 7 months ago. Just 12 days ago, HIP-4, the network upgrade that unlocks outcome markets for Hyperliquid, went live on mainnet. On its launch day, Hyperliquid's first outcome market for the price of Bitcoin did over 3 times the combined volume of Polymarket and Kalshi. This comes alongside the continued development of unified margin accounts on Hyperliquid, which will ultimately enable users to access a seamless unified platform for positioning and hedging across all markets and products. As Hyperliquid's vision continues to become reality, Hyperion continues to position ourselves as the premier institutional gateway to DeFi innovation.

We are very proud to share with you the results of the continued scaling of our DeFi operating businesses, in addition to the growing network value of our ecosystem engagement. In our previous full year 2025 earnings call, we provided guidance of $4 million-$6 million adjusted gross profit for 2026, which captures our core DeFi operating businesses. We've increased guidance to $5 million-$7 million for 2026 and anticipate cash flow breakeven by year-end, driven primarily by the continued opportunities to build income-generating businesses on Hyperliquid. As we walk through the results of this quarter, it should become clear why we raised capital and how our strategies continue to demonstrate the ability to triple dip on HYPE.

In this quarter, we saw substantial growth in our DeFi monetization strategy, as well as expansion of our yield enhancement strategies, both of which we expect to continue to grow through the remainder of 2026, driven by the continued adoption and growth of the Hyperliquid blockchain. Specific to HyperCore, our DeFi monetization vertical grew by 140% this quarter, driven by our partnership with Native Markets, a stronger quarter of volume on the Felix Exchange, our partnered HIP-3 market, and the initial spot testing volumes on Silhouette. These are three different variants of our HYPE Asset Use Service or HAUS. Fees that are variable but correlated to the price of HYPE, fees that scale based on volume and fees generated on our markets listed on HIP-3, and fees that scale based on aggregate volume and associated fee reductions for trading on Hyperliquid.

This diversified approach creates multiple avenues to generate DeFi income that are scalable over time and agnostic to the performance of just HYPE and crypto markets. We saw early on that the long-term appeal of these products would grow as Hyperliquid evolves to become more than just a platform to trade crypto. It will ultimately serve various real-world assets, outcome markets, and structured products. As a result, we have continued to see demand from clients and partners globally for our HYPE Asset Use Service. We have also had the privilege of consistently being the first to be approached by these various deployers to support their objectives and further integrate them into the Hyperliquid ecosystem. With that responsibility, we continue to take a methodical approach to partner selection and ensure deal structures that create and return the most long-term value to our shareholders.

A prime example is our recent partnership with Silhouette, the privacy layer built on top of Hyperliquid. As they fully migrate into production, we expect volumes to increase from $ several hundred thousand to $ several million in volume, driven both by the launch of the RFQ system, which will enable large positions to be filled by onboard counterparties, as well as the ability to maintain those positions privately on Hyperliquid. This helps prevent the front-running of trades as well as competitors potentially copying client strategies. Silhouette's offering is further enhanced with up to a 30% reduction in trading fees, compounding the benefits by providing them to users through an aggregated trading layer. As part of this deal, Hyperion DeFi has received rights to 1% of Silhouette equity in addition to a revenue share of fee savings.

Long term, we believe that the value of private permissioned trade settlement on Hyperliquid will be an attractive product to various funds, prop firms, and market makers as the platform grows to service increasing financial flows. As such, we position for that future by establishing shared revenue streams and upside exposure to our partners. Yield enhancements saw over 150% growth this quarter, driven by the HYPE token's continued high volatility and our ability to enhance yield on our staked positions. We've optimized this strategy to work in parallel with our efforts to battle test and expand our yield infrastructure built on Rysk, our partner in offering institutional-grade vault strategies, which is known as Rysk Premium. We formalized our strategic agreement with Rysk this quarter, establishing a revenue share model for Rysk Premium, which will become publicly available in the coming months.

Currently, Rysk offers the ability to write covered calls and cash-secured puts across a wide variety of crypto assets, including BTC, ETH, SOL, XRP, HYPE, and USDH, with the potential to expand to real-world assets and other tokenized primitives brought to the HyperEVM. We've had very positive conversations with institutions and foundations about bringing their yield enhancement strategies to Rysk Premium. We see several tailwinds for the total value locked, or TVL, increasing on this product. Actively managed on-chain yield strategies use smart contracts, which eliminates the unavoidable counterparty risk found in executing derivative strategies using off-chain execution desks. Instead, strategies are operated using conditional smart contracts and thus resolve based on a specific coded outcome, whether or not the trade was in or out of the money.

Depending on the outcome, the trade is either filled and settled or the collateral is returned to the user without the need to rely on the counterparty to fulfill their obligation. In addition, because multiple liquidity providers are quoting prices for each trade, there is always competition to win user flows, resulting in the best premiums for the user. More recently, SEC Chair Paul S. Atkins signaled new rulemaking for on-chain markets, crypto vaults, and blockchain settlement infrastructure. We expect additional clarity for on-chain vaults to be critical towards driving more institutional adoption of strategies such as Rysk Premium, especially when considering the safety and yield benefits noted above. Just as we are positioning for the future expansion of HyperCore, we believe that the HyperEVM still has immense opportunities for growth and value capture.

One form of such value capture is our current accumulation of Rysk points, which entitles the company to receive a future incentive from Rysk, most likely governance tokens of the protocol. If Rysk continues to succeed, we believe that value and/or utility will accrue to their token. Broadly, we expect to see continued volatility across markets in tandem with more regulatory clarity for crypto, which would bode well for products like Rysk Premium. The recent expansion of our balance sheet will allow the company to further scale such strategies and return that value to our shareholders. Ecosystem rewards remain variable, but we maintain a positive outlook for the ecosystem tokens we will receive through the remainder of the year. As mentioned earlier, our ecosystem engagement efforts have expanded beyond token representation of the protocols we believe have long-term potential.

Hyperion DeFi has now acquired equity positions to various protocols for the benefit of our shareholders. We continue to stand by and deliver on another core objective, to create long-term value for the Hyperliquid ecosystem while simultaneously providing streamlined, comprehensive access to all of the valuable components built there. For example, last quarter, we announced that we had received 1 million HPL, the native token of the Hyperlend protocol. By the end of March, our current allocation of HPL has increased to 10 million tokens, which represents 1% of the total token supply. Hyperion's engagement with each of our partners is laid on the foundation of building things together that increase the long-term value of the Hyperliquid ecosystem. Today, we are proud to announce Avia by Hyperlend, which offers institutional-grade private credit pools built to create liquidity for various assets unique to institutions.

We are launching with natively staked HYPE, which we will be able to borrow or lend against. Additionally, by staking our 10 million HPL tokens to Hyperlend, Hyperion can access a borrow rebate for the maximum staking tier, a utility unique to the platform. Our HPL token stake is factored into the effective rate, allowing us to borrow at rates below those available to any other participant. This structural advantage, which compounds as our borrowing scales, could later enable us and our partners to arbitrage rates between DeFi platforms or between DeFi and TradFi. As these strategies scale, we expect both the TVL and revenue of Avia to grow, a percentage of which returns to Hyperion as DeFi monetization revenues.

Another partner, Kinetic, also had a busy quarter, surpassing over $3.3 billion in total volume on their HIP-3 markets and the launch of their mobile trading application, which alone has generated over $100 million of volume despite being launched less than 1 month ago. They also successfully completed the implementation of KIP-2 and KIP-3, bringing substantial upgrades to the protocol. KIP-2 routes 50% of validator commission revenues generated by the Kinetic platform to the buyback and redistribution of additional KNTQ to SKNTQ or staked KNTQ holders. Hyperion received nearly 2 million KNTQ tokens in Kinetic's token generation event in November 2025, directly tied to our work and partnership with Kinetic. Now we anticipate earning additional income and price appreciation on our staked KNTQ as another recurring ecosystem rewards channel within our flywheel.

We will also highlight that there is a second Kinetic K-Point season ongoing for which Hyperion has positioned itself to receive additional KNTQ. Investors should begin to see that these are the early signs of a flywheel in development enabled by the full suite of on-chain infrastructure built with our partners. We have covered liquid staking, lending, borrowing, and yield generation, and that's just the start. With the traction we've seen in the above ecosystem reward strategies, we continue to engage in conversations with new builders seeking to come to Hyperliquid, with the goal of making it the premier destination for new capital and users. I will now hand it over to our CFO, David Knox, to give highlights on our financial performance.

Thank you, Hunsoo, and good morning, everyone. As Hunsoo already noted, today we are raising our 2026 full year guidance by approximately 20% or +$1 million to $5 million-$7 million of adjusted gross profit, driven by the momentum of our businesses, the immense opportunities we see, and our success in raising $10 million in a public offering last week. We are very proud of what we have built since our new DeFi strategy launched in June of 2025. The results speak for themselves.

Taking a moment to reflect on the financial outcomes to date across the past three quarters, our Q1 adjusted gross profit has grown by 119% since Q3 and +17% sequentially versus Q4, from $439,000 in Q3 to $821,000 in Q4 to $960,000 in Q1. In addition, our achieved earnings multiple versus base staking yield grew from 1.3x in Q3 to 2.7x in Q4 to 3.1x in Q1, as our triple-dip HYPE strategy continues to demonstrate our unique execution advantage versus our peers. The portion of our adjusted gross profit earned in cash has expanded from 18% in Q3 to 22% in Q4 and 48% in Q1.

Our core costs have declined sequentially each quarter, and we expect our costs to continue to decline as our legacy biotech segment rolls off. Meanwhile, in the past three quarters, the average price of HYPE declined from an average effective price of 45.8 in Q3 to 35.1 in Q4 to 30.8 in Q1. In total, a 33% decline since Q3. We achieved plus 119% total growth in our operating business while the underlying HYPE token price declined by 33% and our expense base also declined. Altogether demonstrating that we are not simply a beta play on the price of HYPE, but that we are independently generating scalable value for our shareholders via our unique identity as the first DeFi public company building on Hyperliquid.

All of this is built on our growing treasury of HYPE and Hyperliquid ecosystem positions, including, as of May 11th, over 2 million HYPE tokens, about 1.9 million KNTQ, 10 million HPL, and the future rights to 1% of Silhouette equity or tokens. Our track record shows we are more than just HYPE, and this is still the beginning of our journey. I will now give detail on each of our DeFi operating businesses. Adjusted gross profit, a non-GAAP metric, aims to capture all of Hyperion DeFi's value-add operating business activities beyond simply buying and holding HYPE tokens. As a reminder, our triple dip strategy is designed to simultaneously support and monetize adoption of the Hyperliquid blockchain by deploying each token into at least 3 of our 5 strategies at once. First, we stake our HYPE.

Second, we deploy the staked HYPE into another business activity, our validator yield enhancement or DeFi monetization. Third, we position ourselves for upside in the ecosystem via token airdrops, protocol points and rewards, or equity in our partners. Starting with staking yield. In Q1, we earned about 10,100 HYPE tokens from staking, up 16% quarter-over-quarter versus about 8,400 in Q4. On a dollar basis, our HYPE earned from staking generated $313,000 adjusted gross profit in Q1 versus $305,000 in Q4, while the effective average HYPE price in period declined from $35.1 in Q4 to $30.8 in Q1. Next, validator commissions.

In Q1, the company earned about 1.3 thousand HYPE tokens from validating roughly in line with 1.4 thousand in Q4, worth $40,000. Over 10 million HYPE tokens were delegated to our validator as of April 30th, and we are the top 6 Hyperliquid validator after the Hyper Foundation. There is a GAAP presentment update related to how we account for validating and staking activities. Industry interpretations have evolved regarding the gross versus net presentment of our validator. On December 15th, 2025, we took unilateral control of our validator operations, and our structure and net economics have not changed. In Q3 and Q4, we presented as net until we took control of the validator on December 15th, after which we presented as gross for the remainder of the year.

However, in the Q1 GAAP financials, we are presenting validator economics on a net basis as a result of the evolving interpretations. These differences in presentment have no impact on our adjusted gross profit. Back to our DeFi businesses. Next, our yield enhancement strategies, which primarily monetize volatility on HYPE, generated $211,000 of adjusted gross profit in Q1 versus $79,000 in Q4, plus 165% quarter-over-quarter. In our DeFi monetization segment, we support and monetize Hyperliquid DeFi activity with sustainable, scalable practices. DeFi monetization generated $245,000 adjusted gross profit in Q1 versus $102,000 in Q4, plus 140% quarter-over-quarter.

Hyunsu Jung earlier gave detail on each of the growth drivers here. In our earnings supplement, we have a section dedicated to what exactly our partnerships do for the Hyperliquid ecosystem, and we showcase how our partners are positioned to grow and succeed. Finally, ecosystem rewards generated $150,000 of adjusted gross profit in Q1 versus $285,000 in Q4. We expect the quarter-over-quarter change in ecosystem rewards to be volatile given the unexpected timing of airdrops, token generation events, and other rewards activity. This quarter, we are establishing a track record demonstrating that receiving upside in these early-stage protocols is a core component of our strategy. The Q1 figure reflects 10 million or 1% of maximum supply HPL tokens we received from Hyperlend in connection with our partnership agreements.

In the future, we expect to recognize tokens or equity from Silhouette and expect additional ecosystem rewards throughout 2026. As demonstrated across all five strategies and as the first U.S. public company building on Hyperliquid, we believe this is a great time for us to own more HYPE and position ourselves to deploy into the Hyperliquid ecosystem. This is why last week we closed a $10 million public common equity raise led by high-quality fundamental investors, including Arrington Capital, Blockchain.com, a mutual fund, a technology-driven investment firm, and others, in a time when other digital asset companies have struggled to raise capital. We anticipate this capital to yield accretion to our financials over time since, as our model and results have shown, we generate a very high ROI with our HYPE, and in Q1 generated over 3 times base staking yield.

We've demonstrated this profile regardless of the price of HYPE over the past few quarters. As Hyunsu Jung mentioned, we have a full pipeline ahead of us, not only from what we believe are emerging opportunities in HIP-4 prediction markets, but also our core HAUS or HYPE Asset Use Service agreements. We now have more fuel for our businesses to expand, and by raising full year 2026 guidance by about 20%, we are demonstrating our confidence and commitment to that expansion and holding ourselves accountable to the trust investors have placed in us. Since the close of the offering as of May 11, we have already bought more HYPE, with our treasury now exceeding 2 million HYPE tokens, and our cash position is at $16 million, while we aim to be thoughtful on our HYPE purchase timing and entry points.

As we acquire more HYPE and as our capacity for deals grows, you can expect we will add to our track record of innovative partnerships as we work to build Hyperliquid into the blockchain to house all of finance. Pivoting back to our operating results. Regarding our expenses, operating expenses excluding stock-based compensation declined 1% quarter-over-quarter from $3 million in Q4 to $2.98 million in Q1. Selling, general, and administrative expenses, subtracting stock-based compensation, decreased 5% quarter-over-quarter from $2.8 million in Q4 to $2.7 million in Q1. We expect a near full wind down of legacy biotech operations by the end of the second quarter, which will eliminate R&D and reduce SG&A expenses on a go-forward basis.

In the last nine months, we have eliminated about $2.6 million of legacy GAAP liabilities related to the biotech business, including through direct engagement and resolution with historical partners. At this time, any monetization outcome on the Optejet is uncertain and could be zero. From the third quarter onward, our entire focus and identity will be on the DeFi businesses. On the treasury side, gross HYPE tokens increased from 1.88 million in Q4 to 1.94 million in Q1 to over 2 million tokens as of May 11th. The price of HYPE increased from 25.4 at the end of Q4 to 36.6 in Q1 and 42.2 as of May 11th.

This compares to our aggregate purchase price on HYPE tokens of $37.9, meaning the value of our HYPE treasury at $84.5 million exceeds our cash basis of $75.9 million by approximately $8.6 million. Our net asset value, which adjusts our treasury for net cash and debt, increased from $44.2 million as of Q4 to $69.9 million as of Q1 to approximately $90 million as of May 11. Treasury gains was $21.5 million in Q1 as the price of HYPE increased versus a treasury loss of $36.8 million in Q4. Based on the HYPE price at May 11, we estimate more than $10 million of additional embedded unrealized treasury gains as a tailwind to Q2.

In totality, Q1 net income of $8.8 million, a record for the company, compares to Q4 net loss of $39.8 million. Q1 adjusted EBITDA of $19.5 million compares to Q4 adjusted EBITDA of negative $38.9 million. The primary reconciliation of Q1 net income to adjusted EBITDA is our HYPE liquid staking tokens, or LSTs, for which the GAAP carrying value is the low watermark price of HYPE, as detailed further in our GAAP to non-GAAP reconciliation section in our earnings release and earnings supplement. If all our HYPE LSTs were converted back to HYPE at the end of Q1, we believe that would have increased our GAAP net income by approximately $11.4 million. Finally, regarding our cash flows and cash position.

Net cash used in operating activities was $4.2 million in Q1, which compares to $4.1 million in Q4. However, Q1 operating cash flow included $1.5 million net increase in the levels of operating assets, including acquiring additional USDH stablecoin, without which net cash used in operating activities would have been $2.7 million. Our cash equivalents, and USDH totaled $9.1 million as of Q1 versus $6.5 million as of Q4. As mentioned, as of May eleventh, we have about $16 million in cash. Net cash used in investing activities to purchase HYPE was $1.5 million in Q1 versus $6.3 million in Q4. Quarter to date, as of May eleventh, we have purchased $2.5 million in HYPE.

Net cash provided by financing activities was $6.6 million in Q1, primarily from our at the market offering, versus $9.4 million in Q4. Through May 11th, quarter to date, we have raised approximately $1.9 million net proceeds from the sale of about 500,000 common shares via our at the market offering. As previously mentioned, we issued $10 million gross and approximately $9 million net proceeds from a public equity offering of approximately 2.8 million shares last week. Following that offering's close as of May 11th, our common share count is approximately 15 million shares. Looking ahead, we continue to expect our net operating activity to flip cash flow positive by the end of 2026.

We set this goal for ourselves in our first earnings call under the new DeFi strategy in November 2025. We have made consistent progress now with a 3-quarter track record of achieving growing adjusted gross profit and declining core operating expenses. We are immensely proud of what we have accomplished in the past 3 quarters. We are just getting started. Until Hyperliquid is the blockchain to house all of finance, our job is not yet done. With that, we look forward to answering your questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. The first question is from Gareth Gacetta from Cantor. Please go ahead.

Hi, guys. Thanks for taking the question. I was really impressed with the DeFi monetization in the quarter, and it's good to see that the activity on Hyperliquid is kind of flowing through to you guys. I was wondering if you could provide a little more color on the type of activity that each partnership you have is concentrated in and how you're thinking about diversifying these DeFi deployments based on what activity is most popular on the different protocols.

Hey, and thanks for the question. As covered in the beginning of the earnings call, it's primarily driven by 3 different forms of what we call HAUS or the HYPE Asset Use Service. Fees that are dependent on trading activity on products listed on Hyperliquid. This is in the form of HIP-3 markets, which has non-crypto Trading for equities, commodities, FX, pre-IPO, and so on. We have a trading fee reduction-based service in addition to generally offering HYPEs to other clients at a variable rate depending on the price of HYPE. We're actually seeing demand across all three of the different forms of HYPE asset use, and we have more opportunities to deploy them potentially for permissionless launch of HIP-4 for outcome markets. We're continuously gauging where the demand is coming from and are optimizing for the highest return on our HYPE.

Great. Thank you. Then on the institutional specific strategies, could you provide any metrics related to, like, how many institutions you might be working with on that end or where the growth might be on these different protocols you have?

Sure. We can't provide any names currently, but what we've done over the past several months, and I think the story is becoming more clear, is that we've built primitives directly on the HyperEVM and on HyperCore that are geared towards eventual institutional use of both sides of the Hyperliquid platform. Right now, we're designing it. We're doing a lot of the battle testing ourselves. We mentioned that with Avia on Hyperlend, the Rysk Premium vaults on Rysk. Once we are very confident in the structure, the technology, the ways that it will be able to operate at scale, we'll look to continue to move forward with those conversations.

The emphasis is on the fact that as more total value locked or capital is brought to these protocols and utilization increases, that does become an additional revenue stream of DeFi monetization for the company.

Great. Thanks for taking the questions and great results.

Thank you.

The next question is from Brian Vieten from Siebert. Please go ahead.

Great. Thanks, guys. Hey, Hyunsu Jung and David Knox, I guess just two for me. A big portion of volume's coming from HIP-3. Does the raise allow you guys to extend to HIP-4 without disrupting the sort of the traction with HIP-3? More broadly, we sort of touched on this, can you just talk about the balance of opportunities for the Treasury assets and can that multiple over staking ratchet higher from here? Like, what's an aspirational number there? Is it 4? Is it 5? Is it 10? Just exclusive of airdrops. Thanks, guys.

Hey, Brian. Thanks for the question. For the first part, there isn't enough detail yet on HIP-4 to clearly determine today what it'll look like between HIP-3 deployments that exist and whether or not they can immediately merge into HIP-4, whether it'll require net new HYPE stake. Regardless of whatever the outcome may be, we're prepared to approach it, if we deem it appropriate to do so. For the time being, we wanna focus obviously on continuing to grow, trading activity onto the existing HIP-3 markets in addition to strategically designing any new markets that may come to Hyperliquid.

Then with regard to the second point on HYPE, what the triple DIP is today versus what it may be in the future, we think that there will always be opportunities to scale what we have built so far, right? That's the beauty of blockchain-based technology is that once the infrastructure is built and designed in a way that is robust, any new user can come net new and be able to use it without having to change input or capital costs from our side. It really is about continuing to the strategic design, and so far we feel very confident in what we've seen and the remainder of the year will be focused on, again, scaling, onboarding new partnerships, and continuing to advance that flywheel.

Love it. Thanks, guys.

The next question is from James McIlree from Chardan. Please go ahead.

Thanks. Good morning. I just wanted to press a little bit more on HIP-4. If you have in mind a timeframe when you think you might participate in that, either by staking somebody or investing in somebody, and if you've soft circled in your mind kind of how much investment you would allocate to HIP-4 over the next 12 months.

Hi, James. Thanks for the question. With regard to HIP-4, we wanna make it very clear it did go live on main net, May 2nd. It's currently the canonical version operated by the Hyperliquid Labs team, historically these kinds of products have been made permissionless for other deployers. Once that information becomes available, we will be able to make a full determination on what that rollout may potentially look like for Hyperion. On the other side of that question and with regard to capital investment and how we build these things with our partners, I wanna make it very clear that everything that Hyperion has received so far in the ecosystem rewards, our equity exposure, our token exposure to other partners, we did not pay for.

It is part of our deployment design that we are receiving that kind of ownership stake in our partners as we design these products. When it comes to HIP-4, again, depending on what the official design is going to look like, it will likely be only the deployment of HYPE that we already have on our balance sheet in addition to strategic partnerships and rolling out in a way that we make sure that we have the best distribution, immediate day one impact and are able to generate revenues very, very quickly, the same way that we saw with our HIP-3 deployment.

Yeah. Thank you, I appreciate that. I guess I'm wondering if, with what you've learned with HIP-3, whether or not that gives you greater confidence or allows you to stake more with partners in HIP-4. I'm just wondering if there's an element of either caution or optimism that you have now that you might not have had with HIP-3 that would affect timing and as well as stakes and potential partners.

Yeah. I would definitely say optimism. I mean, we've seen what HIP-3 has done in terms of creating net new businesses for early deployers, especially teams like Trade and what it enabled for teams like Kinetic with mobile applications, building a brand-new user base and new sources of revenue. The same thing applies to Hyperion. I would say maybe the guidance I can give right now is that we are already having multiple conversations with various teams, but we are being very selective about the design and what we think will work long term, especially given the current regulatory environment around prediction markets specifically, although the outcome markets are a different, more of a financial product built for hedging. More details to come on that as we make the determination.

That's great. David, I know that the accounting is complex, so I'm not, I hesitate to ask this, but I'm gonna ask it anyway. Is the revenue guidance a GAAP measure or is, or not? Secondly, I know that the net and the gross validator income is an issue, but is the gross profit that you show in your charts, is that net growth or some of both, depending on the time period?

Yep. Thanks very much for the question, James McIlree. The adjusted gross profit is a non-GAAP measure, which is meant to capture all of our core DeFi operating activities across all five of the strategies: the staking yields, validator commissions, yield enhancement, DeFi monetization, and ecosystem rewards. The primary reason that we have this one metric is because our, these elements from a GAAP perspective appear in three places. It's in revenue, it's in operating income, and it's in other income. We pull it all together to give a single view of our core activities in the metric adjusted gross profit. To your question on the validator, we have always presented our income here on a net basis in adjusted gross profit.

From a GAAP perspective, you know, interpretations continue to evolve, and as outlined in my remarks earlier, we are presenting Q1 fully on a net basis from a GAAP perspective, but that has no impact whatsoever on how we have calculated, or how we present adjusted gross profit, in any of the quarters, in this quarter or in our forward guidance.

Perfect. That answers my question. Revenue guidance, is that a GAAP measure or not?

At this stage, we are not giving guidance of revenue in isolation because it would not be a complete picture of all of our activities. Some of our adjusted gross profit appears in revenue, but adjusted gross profit is the metric that includes everything altogether. As we operate all of our strategies, there should be increase in revenue, there should be increases in the components of operating income that are within adjusted gross profit, and there should be an increase in components of other income. But we think that the best way for investors and the best way that we look at it ourselves is to continue to focus on that metric, adjusted gross profit, which is obviously fully reconciled in the back of the earnings release and supplements to the GAAP figures.

Yeah, my apologies. I misread that. It's the guidance is adjusted gross profit, not revenue. Excuse me. Thanks a lot, guys. We'll talk to you soon.

Absolutely. Thank you for the question, James McIlree.

There are no more questions. We will now turn the call back over to CEO Hyunsu Jung for closing remarks.

Thank you. Our team has had a productive first quarter of the year. We've put our HYPE to work scaling our business lines and, most importantly, establishing key new partnerships. Today's results reflects this progress, and we are confident in our ability to continue to deliver on our roadmap. That includes, again, raising our guidance by 20% to $5 million-$7 million in full year 2026 from our operating businesses. In the coming months, our view is that our business lines will continue to diversify and evolve to become key infrastructure in the Hyperliquid ecosystem. Ranging from our core validator operations and the HYPE Asset Use Service, all the way to institutional geared products built on the HyperEVM.

The early foundations have been laid, and now is the time to ramp up our efforts to bring that capital to these various products, which we believe will create a flywheel effect. Growing revenue streams tied to utilization, increasing the value of our partner protocols, ultimately resulting in more HYPE buyback and burn. As the flywheel accelerates, so does the broader global adoption of Hyperliquid, in turn, driving new users, products, and capital to the ecosystem. The excitement is palpable, we are thrilled to build alongside our partners, especially as countless new opportunities to innovate present themselves. As large shareholders in the company ourselves, our goals have and always will be directly aligned with our shareholders. We only win if you win. With that as a core objective, our team's efforts will optimize for execution squarely focused on value creation within the Hyperliquid ecosystem.

Once again, we are immensely grateful to our investors and partners for their continued support as we advance our roadmap to build the premier institutional gateway to Hyperliquid.

That concludes today's call. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to the Hyperion DeFi fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jason Assad, Director of Investor Relations. Thank you. You may begin.

Good morning, and welcome to Hyperion DeFi's 2025 fourth quarter and full year earnings call. Joining me today are CEO Hyunsu Jung and CFO David Knox. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the IR section of our website at hyperiondefi.com. We also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on our website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

We'll start this morning's call with prepared remarks from Hyunsu and David, followed by Q&A. I'll now turn the call over to our CEO, Hyunsu Jung.

Thank you, Jason, and good morning, everyone. Welcome to Hyperion DeFi's fourth quarter and full year 2025 earnings call, our second full quarterly earnings call since completing our strategic transformation as the first U.S. publicly listed decentralized finance company building on the Hyperliquid blockchain. In our first earnings call as Hyperion DeFi, we stated that we would set ourselves apart from other digital asset treasury companies with our comprehensive ecosystem engagement strategy. At the time, it may have been difficult for investors to understand the concept of DeFi, let alone the idea of a public company using these strategies to generate revenue. The fact of the matter is a public company can successfully participate in DeFi, especially in the right blockchain ecosystem, using appropriate, meticulously designed on-chain architecture.

We have worked with key protocols to develop first of its kind infrastructure native to Hyperliquid that have the potential to create long-term recurring value to Hyperion, our partners, and for our shareholders. We have executed on every strategy detailed in our previous report and are immensely proud to showcase the long-term possibilities of our unique strategies in today's call. It starts with what we view to be the most important digital asset, HYPE, the native token of the Hyperliquid blockchain. In these market conditions, proper asset selection is paramount. We've seen the impact it can have when looking at the relative performance of numerous companies in the DApp sector. However, our vision always went far beyond just buying the right asset. It is essential to be able to effectively deploy the assets to directly contribute to the growth of the underlying blockchain ecosystem.

This is our DeFi flywheel in demonstrating how effectively we can compound returns on HYPE beyond just staking. DeFi monetization is one of our four strategies, which works by compounding returns on our staked HYPE by effectively re-staking HYPE to unique proprietary strategies. In Q3, our HYPE asset use service or HAUS was a concept just starting to gain traction. In Q4, this business line grew substantially, especially with the mainnet launch of HIP-3 in October 2025, which allowed for the creation of non-crypto asset exchanges on Hyperliquid. I want to take a moment to acknowledge the incredible growth and global adoption that Hyperliquid and specifically HIP-3 have achieved over the past few months.

HIP-3 enabled equities, FX, metals like gold and silver, key commodities such as oil, all to trade permissionlessly 24/7 on Hyperliquid, opening up a universe of new tradable assets to users globally. The impact has been tremendous, to say the least. In late January of this year, Hyperliquid captured almost 2% of total global primary silver trading volume, which comes out to around $2 billion-$3 billion of volume on its HIP-3 markets. Keep in mind that these markets have only been in operation for about six months, and silver markets specifically had only been in operation for about one month before seeing such rapid utilization.

More recently, with the rising conflict in Iran over the weekend of March 6, we saw price discovery on oil happen for the first time on a decentralized exchange, while traditional venues such as ICE and CME were closed. Just last week, S&P Dow Jones Indices licensed its flagship index to enable the first official S&P 500 perpetual contract to be available exclusively on Hyperliquid. This is an incredible institutional cosign and the first of many products from traditional finance to move over to decentralized rails, specifically Hyperliquid. Since the beginning, we have continued to emphasize Hyperliquid's critical role in the future of on-chain financial services, and we are seeing this happen now in real time. Market-moving events are accelerating, and markets themselves must now catch up to become available 24/7. Currently, this is only possible on Hyperliquid.

Within this trend, Hyperion DeFi was the first and only public company to deploy one of these HIP-3 markets on Hyperliquid in November 2025 in partnership with Felix Protocol. Our priority has always been on positioning and agility, having a view of how the digital asset space is evolving and preparing to capture value from that evolution. The Felix Protocol demonstrates the value of this focus in having the required infrastructure available. Gold and silver markets were listed in mid-December, just before the massive market attention to metals began a few weeks later. Oil markets were listed in January 9, months before the conflict in Iran. To date, Felix Protocol has crossed over $2.8 billion in trading volume, with over 14,000 unique traders on a product launched less than six months ago.

More importantly, real dollar-denominated fee revenues were earned from trading volumes on this exchange, a share of which returned to Hyperion as revenue. This is a revenue stream agnostic to the price of HYPE and agnostic to the performance of crypto markets. Of course, all those revenues went to the purchase of additional HYPE, a core component of our DeFi flywheel. As our efforts on-chain became further socialized, we saw demand for HAUS accelerate. We are proud to announce that we have launched HAUS with Silhouette, a privacy-focused front end built on top of Hyperliquid. Due to the nature of on-chain transactions being public, traders often seek ways to place trades that are shielded from public view. Silhouette provides the solution, and we believe their products will see significant demand from traders.

Through this deal, we will have the opportunity to earn additional revenues based on trading activity conducted via Silhouette in addition to future ecosystem rewards. In this quarter, we also saw the benefit of our first ecosystem rewards, receiving around 0.2% of KNTQ, the native token of the Kinetiq Protocol. Kinetiq offers the leading liquid staking protocol on HyperEVM and enables us to access HYPE liquid staking tokens, providing us with the flexibility to pursue volatility strategies on HYPE to generate additional income. Through the utilization of their protocol, Hyperion received Kinetiq points, which converted into KNTQ tokens during Kinetiq's token genesis event. KNTQ grants governance rights to the Kinetiq protocol and benefits from continued buybacks of KNTQ with revenues generated by Kinetiq's various products, similar to Hyperliquid's assistance fund model.

Kinetiq's products include their flagship liquid staking platform, which currently has almost $1 billion in HYPE deposits, as well as Markets by Kinetiq, another HIP-3 market which also crossed over $2 billion in trading volume just four months after launch. Kinetiq currently has a second ongoing points program in which we are participating. We have strong conviction in the long-term value of additional alpha generated from supporting the growth and adoption of key applications built on the HyperEVM. These opportunities are not forever. In the same way that there was a limited window to participate in the airdrops of early protocols like Uniswap, Optimism, Arbitrum, and Jupiter, once the opportunity has passed, it may become more challenging to find. Hyperion DeFi's edge is the ability to find, coordinate, and compound these opportunities, and we've continued to demonstrate this ability.

Following the success of our ecosystem rewards efforts in the fourth quarter, we've received substantial interest from other builders in Hyperliquid to partner and build institutional DeFi infrastructure. In February 2026, we announced the Institutional Volatility Income Vault, a developing partnership with Rysk Protocol. Rysk has recently surpassed over $60 million in total value locked and are working quickly to integrate additional liquidity providers and depositors onto the platform. These upgrades should ultimately enable Rysk to offer users the most competitive options premium on chain in a user-friendly format. As part of supporting this build-out, Hyperion DeFi will earn a share of vault revenues in addition to earning Rysk points. Soon after, in March, we announced private lending pools built by HyperLend Protocol. HyperLend aims to be the credit layer on the HyperEVM, and to date has surpassed over $17 billion in total deposits.

By matching KYC lenders and borrowers using smart contract infrastructure, we have the opportunity to bring new capital to the HyperEVM. These products can provide safer, more efficient, non-custodial infrastructure for accessing credit, which can be used for various strategies both on and off chain. We will provide more detail on these pools once they are fully live. In similar fashion, Hyperion DeFi will earn a share of the revenue on total capital allocated to these pools in addition to earning HPL tokens. Together, our partnerships with Rysk and HyperLend unlock institutional primitives for yield and borrow lending on the HyperEVM in addition to new revenue streams for Hyperion. These also build upon the partnerships with Kinetiq, Native Markets, and Felix, given that we use HYPE LSTs and USDH in the HyperEVM and can coordinate market listings for perpetuals via HIP-3.

The value of early partnerships and directly participating in the growth of the DeFi application ecosystem being built on Hyperliquid cannot be understated. Our recent results are a tangible affirmation of what we have accomplished to date. We recognize that we are early in our journey, but it should be clear to those that have been following our story that Hyperion DeFi is about first principles and positioning, to be able to see what will come before it does and being agile enough to move first and aligning with the right teams to build the best long-term scalable products. This is ecosystem building at its finest. I've done it before, but the opportunity in Hyperliquid is fundamentally different. HyperCore's continued success should serve as a powerful tailwind for the growth of the HyperEVM.

We introduced our DeFi flywheel strategy last quarter, highlighting its ability to accelerate as we create synergies around diversified strategies. We ended the year with growth across all of our core strategies, as well as establishing the infrastructure required to scale them. The past several weeks has demonstrated just the beginning of Hyperliquid truly breaking into the mainstream consciousness. It should be clear now why we have chosen to build our businesses on Hyperliquid. I will again recognize that our innovations are possible because of the breakneck pace of innovation in the Hyperliquid Labs team. In the beginning of March, the next Hyperliquid Improvement Proposal, HIP-4, which allows for outcome markets on Hyperliquid, went live on testnet. Outcome markets, or more colloquially known as prediction markets, create a new form of hedging instrument directly available on the Hyperliquid platform.

This unlocks one-time cost hedging opportunities for assets, starting with digital assets like BTC and HYPE. We believe that this product will quickly expand beyond digital assets and enable options like hedging for real-world assets, the same way we saw the dramatic adoption in HIP-3. We are monitoring the situation closely and are keenly aware that this could be another avenue for Hyperion DeFi to expand our business lines. And what does this mean for our shareholders? It highlights something that we are calling the Hyperion Triple-Dip, our unique ability to generate a multiple above the baseline return on HYPE. This is only possible because of our management team's respective backgrounds that positions us to be at the forefront of DeFi innovation.

David Knox joined Hyperion from PayPal, managing multi-billion dollar loan books, and was a pioneer in building some of the most unique and sophisticated structures in asset-backed finance while at Cantor Fitzgerald and SoFi. Robert Rubenstein has a multi-decade background in the gaming and exchange-traded derivative markets. Altogether, we believe this positions Hyperion as the de facto best solution for compounding HYPE-on-HYPE returns, more so than any other DApp or ETF. We are much more than just HYPE. Long-term, we are positioned to generate more real revenue on HYPE, accelerating our ability to redeploy HYPE to new strategies. We have executed on every objective we set for ourselves, and we don't plan to stop anytime soon. With that, I'll hand it off to David to dive into the numbers and demonstrate how these strategies are starting to show their long-term potential.

Thank you, Hyunsu Jung, and good morning, everyone. On our first earnings call under the new DeFi strategy in November, we laid the groundwork for our core operating businesses and committed to our investors 31%-43% quarter-over-quarter operating growth independent of the price of HYPE. We have exceeded our guidance with Q4 up 87% quarter-over-quarter. Our results show that we have transcended the strategy and capabilities of a simple buy and hold DApp, and instead, we are differentiated as the first publicly listed DeFi company building on the Hyperliquid blockchain. The financial investment thesis in Hyperion DeFi is clear. We are unique among digital asset treasuries with five diversified operating business lines. We earned about three times base staking income in Q4.

Our Triple-Dip HYPE deployment, where we deploy the same tokens into three income strategies at once, is only possible because of our management's unique ability to build and innovate on the Hyperliquid blockchain. We have strong earnings leverage with a low-cost base built for scale and achieved 30% quarter-over-quarter decline in our core costs. At a glance, thinking about us as a sum of parts. First, we have a growing treasury denominated in over 1.93 million HYPE, as well as Hyperliquid community tokens, such as 1.9 million KNTQ and 1 million HPL tokens as of March 23. Second, we have ramping business lines and anticipate $4 million-$6 million adjusted gross profit in 2026, or about 4 times our 2025 full year results.

Third, we are continuing to build out our third-party institutional DeFi capabilities Hyunsu mentioned, including our top ten validator, commodities and equity partner markets, on-chain secured lending, and institutional vaults, which will help bring more institutions onto Hyperliquid while monetizing those outcomes. When you put it together, we believe our financial profile is a growth stage fintech with a growing HYPE and Hyperliquid community treasury and the premier gateway for retail and institutional investors to gain equity exposure to the growing DeFi and blockchain ecosystem. Before we go into detail on the business activities, I'd like to outline some important updates on GAAP presentment. In Q3 2025, three months in, our core DeFi businesses were primarily presented in revenue.

In Q4 2025, as our strategies have expanded and evolved, they now appear in multiple places in the GAAP financial statements, including revenue, operating income, and other income. In addition, on December 15th, we fundamentally changed our joint validator structure, giving us more control of the combined operations. We became principal from a GAAP perspective. So, on and after December 15th, we will now be presenting validator activities on a gross revenue basis, with cost of revenue representing the amounts paid out to third parties. Therefore, our adjusted gross profit presents what we believe is the best singular way to view and compare all our core operating activities period over period.

And that metric, adjusted gross profit, increased 87% quarter-over-quarter from $439,000 in Q3 to $821,000 in Q4, versus prior guidance of 31%-43% quarter-over-quarter growth in our businesses. I will now go into detail on each DeFi income stream. Our first business activity is staking, where we earn staking yield on our HYPE tokens at our validator. In Q4, we earned 8.7 thousand HYPE tokens from staking, up 17% quarter-over-quarter versus 7.4 thousand in Q3.

On a dollar basis, that translated to $305,000 in Q4 versus $340,000 in Q3, a decline of 10% given the effective average HYPE price in period declined from 45.8 in Q3 to 35.2 in Q4. Now, as opposed to other buy and hold DApps who only stake their tokens and don't have operating businesses, we next add four HYPE deployment strategies on top of staking, which is how we generated approximately 3 times base staking income in Q4. Our Triple-Dip strategy is first, stake our HYPE. Second, deploy the staked tokens into another business activity, our validator, yield enhancement, or DeFi monetization. And third, position ourselves to receive airdrops and ecosystem rewards. Our second business activity is running our validator and earning commissions.

11.8 million HYPE tokens were delegated to our validator as of December 31st, which is +43% versus 8.2 million as of September 30. In Q4, we earned 1.4 thousand HYPE tokens as validator commissions, up 197% quarter-over-quarter versus roughly 500 tokens in Q3. On a dollar basis, this translates to $49,000 in Q4 versus $21,000 in Q3, which is up 127% quarter-over-quarter. As we mentioned on our last earnings call, in Q3, our validator receives a roughly 3 million HYPE token delegation from the Hyperliquid Foundation. In addition, as we scale our third-party DeFi businesses, we expect more third-party tokens to be delegated to our validator over time. Our validator is a critical component of our DeFi flywheel.

We are creating a gateway for institutions to participate in our on-chain activities while earning commissions along the way. Our third business activity is yield enhancement. We pursue off-chain and on-chain accretive strategies to enhance yield earned on our assets. Yield enhancement activities generated $79,000 in Q4, +2% versus $78,000 in Q3. These strategies include, for example, selling covered call options on the price of HYPE to institutional counterparties collateralized by our LSTs, so we continue to earn staking yield. In 2026, we have begun executing within our Institutional Volatility Income Vault with our protocol partner Rysk and expect our yield enhancement to ramp throughout 2026. Our fourth business activity is DeFi monetization. We are just beginning to ramp all these strategies Hyunsu mentioned, which generated $102,000 in Q4 versus less than $1,000 in Q3.

Fundamentally, these new businesses generate fees for us as trading volume grows on Hyperliquid and as more financial products and asset classes move on-chain. Our fifth business activity, and our last within digital assets, is ecosystem rewards. Through our active participation in the Hyperliquid DeFi ecosystem, including all of the other business activities I just mentioned, we position ourselves for the receipt of token airdrops, protocol incentives, and other rewards throughout the ecosystem. Ecosystem rewards generated $285,000 in Q4 versus none in Q3 from the receipt of 1.9 million KNTQ tokens from Kinetiq. In Q1, we received 1 million HPL tokens from HyperLend as of March 23. While we expect there to be some quarterly variability in the magnitude of future tokens and rewards, we feel confident that we will receive more throughout 2026.

Our final business activity is our legacy life sciences segment, which did not generate any adjusted gross profit in Q3 or Q4. In our Q3 earnings call, we detailed how we were still developing our proprietary Optejet user-filled device or UFD, our last remaining product within the life sciences segment, and that we were continuing to incur ongoing costs, including personnel and IT maintenance while investing in some additional R&D. The goal was to get the product further along on this development and make it a more attractive asset to the market. Today, we are pleased to announce that in Q1, we executed a non-binding letter of intent to monetize the Optejet. Which the transaction is subject to diligence currently underway as well as other customary closing conditions. But if successful, we expect the transaction to close in the second quarter of 2026.

We expect our ongoing operational expenses to decline, and there is now a potential path for future monetization proceeds from the Optejet. Moving on to operating expenses. Our core operating expenses, R&D plus SG&A, and excluding stock-based comp, declined 30% quarter-over-quarter from $4.3 million in Q3 to $3.0 million in Q4. We expect our expenses to further decline throughout 2026, especially with the pending outcome of the Optejet LOI. The next item I'd like to discuss is a new non-GAAP measure called treasury gains and losses, which is meant to capture all the value movements of our digital assets in period, including HYPE, our LSTs, and any Hyperliquid ecosystem tokens such as KNTQ in the fourth quarter.

It also aims to remove the GAAP nuance as it relates to LSTs, which I described further in our Q3 earnings call, where we have to carry those assets at the lower of cost basis or impaired value, which is the low water mark HYPE price in the period. While we are strongly convicted in our point of view that HYPE is the most attractive digital asset and that the Hyperliquid blockchain is ripe for opportunities to deploy income-generating DeFi businesses. We expect HYPE to remain a volatile asset, i.e. going from about $45 as of September 30 to $25 as of December 31 to $38 as of March 23. This is exactly why we break out our operating businesses within adjusted gross profit, so that our DeFi activities can be presented independent of the mark-to-market movement of our tokens.

Treasury losses were $36.8 million in Q4 versus positive $11.9 million treasury gains in Q3. Based on the March 23 price of HYPE of 38, and depending on where we end the quarter, we could have over $24 million of unrealized treasury gains in Q1 compared to our December 31 mark-to-market price of 25. This is how we think about our total income in the most simplified fashion. Start with our core DeFi activities and adjusted gross profit minus operating expenses, ex stock-based comp, plus treasury value gains and losses, plus some small items and adjusted other income and expense which weren't material in Q3 or Q4.

It gets us to our adjusted EBITDA of -$38.9 million in Q4, versus +$8.0 million in Q3, compared to GAAP net loss of $39.8 million in Q4, versus net income of $6.6 million in Q3. Moving on to the balance sheet. Our gross HYPE tokens increased from 1.72 million as of Q3 to 1.88 million as of Q4, to over 1.93 million as of March 23, or over a 50,000 HYPE increase quarter to date as we continue to buy more HYPE and earn staking and validated income in HYPE. We also currently have 1.9 million KNTQ received in Q4 and 1.0 million HPL received in Q1 as of March 23.

We did not pay anything for those two tokens, but believe their value over time will be driven by each protocol's growth alongside the Hyperliquid ecosystem. Our net asset value, which adjusts for debt and working capital, decreased from $74.5 million as of Q3 to $44.2 million as of Q4. Our $8 million of outstanding debt as of Q4 is at an 8% annual interest rate. It is in an interest-only period until Q1 2027, and half of that interest-only payment is cash, and the other half pays in kind, adding to the balance of the loan. In March, we announced a partnership with HyperLend, whereby we can borrow at a 4.0% fixed rate secured against some of our high HYPE LSTs.

We expect our first draw in the coming weeks and to partially pay down some of our legacy 8% debt with the proceeds. Regarding our cash flows, net cash used in operating activities was approximately $4 million in Q4 versus $3 million in Q3. In Q4, we had a $1.3 million reduction in current liabilities versus Q3 as we continue to streamline the balance sheet and legacy items. Our cash equivalents, and USDH stablecoins total approximately $9.2 million as of March 23, giving us multiple quarters of runway. As our expenses decline and our businesses ramp, we continue to anticipate achieving positive net operating cash flows by the end of the year. Net cash used in investing activities to purchase HYPE was $6.3 million in Q4 versus $20.0 million in Q3.

Q1 quarter to date as of March 23, we have bought another $1.5 million in HYPE. We raised $9.4 million net proceeds from our at-the-market offering in Q4 versus $21.8 million in Q3. Quarter to date Q1 as of March 23, we have raised an additional $6.7 million net proceeds from the ATM. There's additional detail in our earnings content regarding full-year results, comparisons to 2024, and per share metrics, many of which include to a large extent our legacy biotech operations, which the company began to scale back beginning in Q4 2024. Looking ahead to 2026, we expect continued growth in our adjusted gross profit driven by our DeFi businesses. Staking and validator revenues are expected to continue to increase as the Hyperliquid network expands and our staked and delegated positions grow.

We expect our yield enhancement strategies to scale with our new vault partnership with Rysk and private lending pools with HyperLend. Our pipeline for DeFi monetization and protocol partnerships is robust, and we believe that the HIP-4 upgrade on prediction markets may unlock new opportunities for us in 2026. And we anticipate additional airdrops and ecosystem rewards as we get rewarded by the Hyperliquid community for our Triple-Dip strategy supporting its growth. 2025 is a remarkable year of firsts for the company. We already achieved about three times base staking yield in Q4 with our strategies only six months old. In 2026, we believe our flywheel effect to compound our treasury holdings is simply unparalleled. Now imagine this scenario. In a few years' time, Hyperliquid may become the dominant blockchain for financial transactions.

After HIP-4 prediction markets may come HIP-5, 6, 7, further upgrades to create new infrastructure that we haven't even thought of yet. After already achieving scale on trading crypto, metals, oil and gas, and the S&P 500, more and more institutional products and asset classes may become regularly traded on Hyperliquid. Compounding fees permanently burn outstanding HYPE tokens, reducing the maximum supply, and its scarcity versus demand may drive the price higher. Meanwhile, the infrastructure we've helped to build is producing recurring DeFi revenues for our shareholders, and our Hyperliquid community tokens may become more valuable as those protocols that we help support evolve into compelling platforms and businesses in their own right. This is the vision that we believe in at Hyperion DeFi, and every day we are helping to build that vision into reality.

With that, I'll turn it back over to the operator, and we look forward to answering your questions.

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Gareth Gacetta with Cantor Fitzgerald. Please proceed with your question.

Hi. Good morning, guys. I was wondering if you could go into more detail on the HAUS agreements you guys have for HIP-3 markets and maybe how you're thinking about HIP-4 and if you might participate similarly to how you've done with HIP-3.

Yeah, sure thing. HYPE as a use service is our original proprietary design when we realized that there was a lot of utility behind the HYPE token and effectively being able to stake and restake it in the ecosystem. For HIP-3 we saw the value of creating non-crypto perpetual markets that are agnostic to the price of HYPE and agnostic to the performance of crypto markets. It's a revenue stream that is denominated in dollars and basically lets us continue to scale with increasing volumes on our exchange. In partnership with Felix, we earn a share of the revenue from that product design and it's something that we will continue to use. We are seeing significant demand across a global client base as more and more users come to Hyperliquid.

With regard to HIP-4, the only guidance that we have right now from the core team is that it will start canonical and could eventually become permissionless. If there's an opportunity there, we will definitely be positioning and looking to participate given the HYPE that we have on the balance sheet. Thank you.

Thank you. Maybe just a quick follow-up. We really appreciated kind of the increased description on all of these operating business lines. Could you maybe talk about where you might expect some of these to be more consistent or recurring in nature as compared to maybe some that might be less predictable?

Yeah, absolutely. Thank you, Gareth, for the question. Thinking about the five business lines, and I'll go from the bottom up. Staking yield should scale in proportion to the amount of HYPE that we own ourselves. Validator commissions will scale depending on the amount of tokens at our validator, which we believe could increase substantially to the extent that our DeFi monetization activities grow and to the extent that we are able to be successful in bringing others onto the Hyperliquid blockchain through the protocol partnerships that we have. DeFi monetization, that can scale from essentially a parabolic perspective to the extent that there's more trading activity on Hyperliquid, to the extent that there's more financial products, and to the extent that our infrastructure can be adopted by more users.

Yield enhancement similarly, it's first-party strategies that we have, such as selling covered calls, such as cash-secured puts, which increase the yield on our assets while using staked HYPE as the collateral, our liquid staking tokens. So that could be linear somewhat from a first-party perspective, but it also opens up third-party capabilities with the vault partner that we have, which is Rysk. Ecosystem rewards. It's inherently unpredictable to determine the timing of airdrops between Hyperliquid community tokens or potentially HYPE itself, as well as the other sort of rewards that can exist. The way that we position ourselves there, we think is inherently unique and unlike any other public company, especially within the Hyperliquid ecosystem. Thank you, Gareth, for the question.

Thanks, guys.

Thank you. Our next question comes from the line of Brett Knoblauch with Cantor Fitzgerald. Please proceed with your question.

Hi, guys. Thanks for taking my question. On HIP-3, we're seeing obviously significant kind of volume growth month-over-month there. I know HIP-3 in general has only really been around for, you know, maybe five months at this point. From my understanding, we're still kind of in growth mode, or where HIP-3 has growth mode activated, which kind of lowers the fees from those markets. At what point do you think growth mode kind of goes away and this, you know, fee potential of those markets starts to become more material for both you and the ecosystem from a buyback perspective?

Hey, Brett, thanks for the question. We've had weeks or months where growth mode was not applied to certain assets on the exchange that we have with Felix, and we saw the benefits pretty immediately. Right now, for context, growth mode reduces fees across HIP-3 markets by 90%. However, when we talk to TradFi teams or prop firms that are using existing exchanges like CME and so forth, growth mode is necessary right now to be more competitive than, you know, the de facto solution. Right now, we expect that if the leader of the HIP-3 markets, for example, Trade[XYZ], they're kind of setting the baseline rate, and so other markets must follow to be competitive. We expect that as the product base expands, the various markets that are available in HIP-3 evolve.

We do see that coming down over time. That's something that obviously depends upon the user growth and general activity and what is required for Hyperliquid to become more accessible and offerable to institutional players.

Awesome. Maybe just, you know, I know we're kind of waiting for legislation in the U.S. and the Clarity Act, kind of a bit unclear on maybe what that means, if it means anything for Hyperliquid. Do you guys have any thoughts on that and maybe the potential where we see Hyperliquid eventually become allowed in the U.S.? You know, is that something that you guys envision happening anytime soon?

Thank you, Brett, for the question. Taking a step back here, I think it's important to believe fundamentally that industry regulators and consumers are aligned with the long-term goal, which is fair, transparent and efficient markets. That will be driven by the fundamentals of what is available, and we believe that Hyperliquid will be of increased demand and of increased importance, and that the long-term regulatory arc will be supportive of its access and of its growth. That being said, we do not have a crystal ball. We do not know what comes next, at what point in time, and the various incremental steps that will happen. Sitting where we are today, exactly where we are, the business opportunity for Hyperion DeFi is extremely robust.

We will continue to operate in the environments where we are, which is the only thing that we know, and be responsible, be diligent, believing that we have a duty as an innovator within DeFi to be very, very thoughtful on all the activities that we do. However, I do believe there will be long-term upside to us when the regulatory tailwinds continue to accelerate. Thank you for the question.

Thank you, guys. Really appreciate it.

Thank you. Our next question comes from the line of Jim McIlree with Chardan Capital Markets. Please proceed with your question.

Yeah, thanks, good morning. David, could you comment on operating cash flow break even for the year? Then secondly, the adjusted gross profit expectation that you have for the year. It kind of sounds like it's back-end loaded. I mean, not too much, but it does kind of sound back-end loaded. Is that correct?

Thank you, Jim, for the question. Fundamentally, we had about $3 million of core operating expenses, excluding stock-based compensation in Q4, versus our adjusted gross profit of about $821,000. Essentially, we expect those two elements to converge and flip at some point this year in 2026. Some of our operating profiles and businesses are in cash, some of them are in HYPE. Some of our expenses obviously are denominated in cash and some are not. The way that we get there is by our ramping DeFi business lines. It is by partially the outcome of the Optejet LOI, which should reduce our costs, and it's from further cleanup of the balance sheet and a few legacy items that we continue to process through day by day.

We made that commitment in our earnings call in November. That continues to be the main target for us as a company, and it's critical to proving that we are more than just a digital asset treasury, that we are a DeFi company, a Fintech. When we get to that level, we believe that'll be a fundamental inflection point for our growth.

Okay. As far as the adjusted gross profit outlook, it does ramp during the year. I mean, it would be reasonable to think that it's up every quarter. I know you've got some one-time things that are going to impact that, like the HyperLend airdrop. For the most part, the DeFi businesses are going to ramp quarter to quarter.

That's correct. We are not giving individual quarter guidance, and we are not giving guidance on each of the five businesses individually. What's important to note is that we have the ability to navigate and be fluid with the ecosystem. As opportunities present ourselves, we will adapt to the extent that there is a actionable opportunity for us in HIP-4, for example, that could change how we're allocated among our different businesses. However, throughout the year, we believe that they should all ramp. There will be some variability and that, yes, we will end at the end of the year in levels and run rates greater than we were entering into the year.

Great. Lastly, on the Silhouette announcement that you had yesterday, the day before, is that a similar revenue and earnings opportunity for you that you've had with the others, that there's gonna be a revenue share and maybe something else attached to it? When do you think that would become operational for you?

Yeah. Thanks for the question, Jim. HAUS, all of the deals that we write under that structure are revenue share based, in addition to being able to receive ecosystem rewards, which are often reflected in the form of tokens native to each of the counterparties.

This, Silhouette, is interesting because it is more of a platform built on top of Hyperliquid that offers privacy for traders. Those that are using sophisticated strategies are able to do them with them being shielded from public view. We expect there to be a lot of volume being done through the platform, and the traders receive the benefit of significantly reduced fees. That is something that is also scalable with increasing volumes.

We've actually seen the amount of assets in the Silhouette trading accounts rise over the duration of the day after the deal was signed, and so we expect that to continue to ramp up as they also initiate a growth campaign shortly.

That's operational for you right now, is that correct?

That's correct. Yes, we are live now.

That's great. Okay. That's it for me. Thank you.

Thank you, Jim.

Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Brian Vieten with Siebert Financial. Please proceed with your question.

Great. Thanks, guys, and great quarter. Hey, can we just talk about the pipeline of capital as a service agreement, your HAUS agreements? Talk about what you're typically looking for in a partner and maybe how much capital you have ready to deploy into those. That'd be like your total HYPE treasury less what you've already deployed in terms of HYPE tokens. I guess, is that the bottleneck? Are there maybe, you know, five or 10 of these ready to go once you guys have more tokens? I just had a follow-up.

Yeah. I would say there's a substantial pipeline for high asset use. The more that this product becomes socialized and people are able to see the benefits, we are the de facto solution for a lot of new products and services, HIP-3, increased trading fees, and when HIP-4 potentially becomes permissionless, we expect that to be another avenue of opportunity. As we mentioned on the call, we have a little over 1.93 million HYPE. We are at pretty high utilization across our strategies, and as David mentioned, we have the flexibility to migrate or utilize HYPE for different strategies depending on the opportunity available. We are always focused on optimizing the return, and being able to generate the highest, HYPE-on-HYPE or dollar-on-HYPE return across the balance sheet assets.

Our focus is to continue to strategically utilize the ATM, generate revenue, and roll that into increasing the HYPE position so that we can continue to scale and compound these deals. The benefit of that obviously is we expect the tailwinds behind HYPE to continue to persist, which also generates more revenues to the validator and delegation operations, in addition to the growth of general ecosystem products, as we are seeing Hyperliquid really start to break into the mainstream.

That's great. Kind of in the same vein, but can you just talk about the return profile of some of those agreements? Like for HIP-3, you're locking up 500,000 tokens. Others might require fewer tokens or maybe more. Could you just talk about those HYPE-on-HYPE returns of some of the agreements you've made so far? And maybe just for fun, we could, you know, think of the HIP-3 business as if, you know, growth mode were to end at some point and maybe volume sustained. Thanks.

Yeah, sure thing. HYPE assets are actually mostly denominated in dollar-based revenue. As mentioned earlier, Silhouette is trading fee reduction, so as more volumes are deployed through that platform, that will result in more fee savings, and a larger percentage of that will return to Hyperion as revenue. So we actually find that as more of an in-demand product because we are seeing more market makers and teams from traditional finance start to come over to Hyperliquid. When these teams are doing $300-$500 million of volume a day, the fees that they're paying to Hyperliquid are quite substantial. That is a product that we see a lot of opportunity from.

With regard to HIP-3, like I mentioned earlier, if there wasn't growth mode, the model and projections that we've had prior to HIP-3 deployment were quite accurate. It is purely a volume-based product, whereas more trading activity is done through Hyperliquid front end and also through the builder codes, which are effectively mobile applications for distribution. We are seeing substantial growth across the user base, and we are working specifically with our partner at Felix to figure out which regionals, which regions, which markets, and which ways are the most effective mechanisms to bring more users and sustainable trading volume to the HIP-3 exchange.

Awesome. Thanks, guys. Excellent stuff.

Thank you, Brian.

Thank you. That concludes our question and answer session. I'll turn the floor back to Mr. Jung for any final comments.

Great. Thank you. As we conclude today's call, I want to highlight how rapidly Hyperion DeFi has differentiated itself from other companies that are still operating under the digital asset treasury or DAT moniker. In six short months, we have been able to demonstrate the possibilities from a revenue perspective as these unique strategies start to gain momentum. This is rooted in our ability to work together with teams in the Hyperliquid ecosystem to accomplish the ambitious objectives set for ourselves. In many ways, we see these partnerships and the associated products becoming our moat, building upon each other, ultimately accelerating our DeFi flywheel.

At the same time, in a space as dynamic as crypto, it is also paramount that we remain flexible and position quickly for new developments in Hyperliquid. In my shareholder letter published in January, I talked about two mega trends for the year, tokenization and artificial intelligence. We are already seeing the impact of these technologies playing out. Real-world assets like oil and silver, seeing price discovery during off-hours, in addition to increasing experimentation and utilization of AI agents to execute trading strategies on-chain. This comes at a time when we are seeing large-scale institutional adoption across key components of finance, payments, and frontier tech. It is imperative that we continue to operate for the long term and design on-chain products for a future that is highly financialized and autonomous.

The regulatory environment for crypto is also advancing positively, with the recent announcement of the SEC and CFTC working jointly to provide classification and clarity for digital assets. It is encouraging to see the newly founded Hyperliquid Policy Center represent Hyperliquid at the White House, ensuring that our ecosystem's efforts are brought to the attention of key decision-makers. We firmly believe that the future is bright for Hyperliquid. With increasing regulatory clarity and maturing institutional infrastructure, the performance advantages of platforms like Hyperliquid should continue to break into mainstream adoption. This positioning is how Hyperion DeFi positions to win. In 2026, our priorities remain focused on three key areas. Continuing to strategically build our HYPE position, strengthening our partnerships within the Hyperliquid ecosystem, and scaling our portfolio of DeFi services, developing the institutional infrastructure necessary to bring traditional finance onto the Hyperliquid blockchain.

We are so sincerely grateful for the continued support of our shareholders and of course, to our ecosystem partners as we continue to build and scale our on-chain infrastructure directly on Hyperliquid. Hyperion DeFi is building for the future of finance. This is more than just hype. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to Hyperion DeFi's Q3 '25 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Jason Assad. Thank you, Jason. You may begin.

Good afternoon, and welcome to Hyperion DeFi's 2025 Third Quarter Earnings Call. Joining me today are Interim CEO, Hyunsu Jung; and CFO, David Knox. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project and similar expressions, which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the Investor Relations section of our website at hyperiondefi.com. We'll also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on our website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures. We will start this morning's call with prepared remarks from Hyunsu and David, followed by Q&A. [Operator Instructions] I'll now turn the call over to our Interim CEO, Hyunsu Jung.

Thank you, operator, and good afternoon, everyone. Welcome to Hyperion DeFi's Third Quarter 2025 Earnings Call. Our first full quarterly earnings call since completing our strategic transformation from a biotech company to the first U.S. publicly listed digital asset treasury company focused on the Hyperliquid ecosystem. Now before I dive into our Q3 achievements, I want to acknowledge that this has been an extraordinary year for Hyperion DeFi. We successfully executed what I believe is one of the most significant corporate transformations in recent public market history, pivoting from Eyenovia's ophthalmic technology focus to establishing ourselves as a premier institutional gateway to DeFi innovation. Today, Hyperion DeFi stands as the first U.S. public company building a strategic HYPE token treasury. We're not simply holding digital assets. We're actively participating in the sustainable growth and governance of what we believe will become the backbone of next-generation financial services, the Hyperliquid blockchain. Our thesis is straightforward. Traditional finance is undergoing its most significant transformation since the advent of electronic trading. Hyperliquid represents the convergence of institutional-grade performance with decentralized innovation, offering up to 100,000 transactions per second with sub-second finality, all fully on chain. As institutions increasingly recognize the utility of blockchain adoption, we believe Hyperliquid's infrastructure advantages position it to capture significant market share in not only the extensive derivatives market, but also as part of its larger role as a sustainable layer 1 blockchain ecosystem. Let me briefly outline why our conviction on Hyperliquid is so strong and why we decided to establish a digital asset treasury focused on HYPE, its native token. All information is as of October 31, 2025, and based on external resources. Hyperliquid is the #1 revenue-generating blockchain and #11 cryptocurrency by market cap, both figures excluding stablecoins. Hyperliquid generates annualized revenue of approximately $1.3 billion based on an October 2025 observed run rate of $3.5 million per day. Additionally, platforms built on Hyperliquid earn approximately $2 million in fees per day, bringing the total fees to approximately $5 million per day across the blockchain and platforms. Approximately 99% of Hyperliquid revenues are used by the Hyperliquid assistance fund, which has cumulatively purchased and owned 34.25 million HYPE tokens with a market value of approximately $1.45 billion. There have been over 800,000 cumulative Hyperliquid marketplace users since inception. Hyperliquid's token maximum supply is $1 billion, of which circulating supply is approximately $337 million and corresponds to a market capitalization of approximately $14.3 billion. Daily trading volume on Hyperliquid exceeds $12 billion, cumulative Hyperliquid fees have exceeded $700 million since inception and cumulative cryptocurrency perpetuals trading volume on Hyperliquid has exceeded $3 trillion since inception. With that in mind, what sets Hyperion DeFi apart from other digital asset treasury companies is our comprehensive ecosystem engagement strategy. While companies like MicroStrategy pioneered the corporate Bitcoin treasury model and others have followed with various token strategies, our approach with Hyperliquid goes far beyond simple accumulation. The market opportunity we're addressing continues to expand rapidly. Upcoming network upgrades, such as the recently announced HIP3 are expected to create new opportunities for users ranging from retail to institutions to participate in the ecosystem. For example, the requirement for 500,000 HYPE stake to launch new perpetual futures market has generated and is expected to continue to generate natural demand for large long-term token positions, which is exactly what we've worked to build through our strategic accumulation. Our competitive positioning is unique. As the first and largest public company focused on HYPE, we believe we have advantages in capital access, regulatory compliance and institutional credibility that will be difficult for competitors to replicate. We also continue to develop what we expect to be long-term relationships with various participants in this space, ranging from protocols to major market makers and execution counterparties. One of our most significant Q3 achievements was launching our first HYPE Asset Use Service agreement with proprietary trading firm, Credo Payment. This innovative structure allows institutional clients to utilize our stake HYPE position to reduce their transaction costs on Hyperliquid while both parties share the resulting fee savings. This model demonstrates how our treasury position can create unique revenue opportunities that extend far beyond simple token appreciation. We're essentially monetizing our stake in the network infrastructure while maintaining full ownership of our underlying assets, a business model that we believe has no equivalent in traditional finance. Our vision extends beyond generating robust revenues on our treasury assets. We're actively supporting the build-out of institutional infrastructure to bridge traditional finance and decentralized finance. The appointment of David Knox as our Chief Financial Officer exemplifies the strategy. David previously served as both Head of Capital Markets and Head of Finance for Global Credit and Financial Services at PayPal. He brings deep experience in scaling institutional financial product, and we believe his expertise in structured products and capital markets positions us to develop sophisticated financial services built on Hyperliquid's infrastructure. It may be difficult to recognize now, but Hyperion DeFi is in the early phases of building out a unique strategy that we anticipate will benefit from a flywheel effect that circulates both on and off chain. We're not waiting for others to start this flywheel. We're accelerating it day by day alongside other ecosystem builders, developing institutional-grade products and services that leverage Hyperliquid's unique blockchain technology while meeting the regulatory and operational standards that traditional institutions require. Our financial strategy is designed to create long-term shareholder value through multiple pathways. First, direct exposure to HYPE token appreciation as we expect the Hyperliquid ecosystem to continue to grow and capture market share in decentralized derivatives. Second, we anticipate recurring revenue from our growing portfolio of DeFi services, including validation, asset use services and future product offerings. Third, the potential for strategic partnerships or acquisition opportunities as we expect traditional financial institutions to seek exposure to DeFi infrastructure. And fourth, optionality around our legacy assets, including the potential for UFD monetization through strategic partnerships. I want to provide a quick rundown of our 6 business activities in Q3. Number one, staking rewards. This starts with our Kinetiq x Hyperion Validator. The company stakes its HYPE to its Validator and earns HYPE rewards. Number two, Validator commissions. The company operates its Validator under a Joint Validator Operators Agreement together with Kinetiq and Pier Two, earns commissions on rewards delivered to third-party tokens delegated to the Validator. Number three, yield enhancement. The company pursues accretive strategies to enhance yield earned on its tokens. In Q3 '25, this included the launch of the company's HiHYPE or Hyperion Institutional HYPE liquid staking token, gains on covered call option strategies included in the realized and unrealized gains on digital assets income statement line items and certain liquid staking activities. Number four, DeFi monetization. The company supports and monetizes DeFi activity on the Hyperliquid blockchain with practices we believe to be sustainable and scalable. In Q3 '25, this included the launch of the company's proprietary HYPE Asset Use or HAUS platform, which allows its clients to unlock unique utility on Hyperliquid while generating fee income for Hyperion DeFi. We expect to be able to generate new revenue streams on top of staking, something that simply isn't possible with traditional treasury assets. The company announced its first HAUS transaction with Credo in September 2025, which enables Credo to receive the benefit of lower trading fees on the Hyperliquid decentralized exchange with Hyperion DeFi receiving a portion of those savings as income while continuing to earn staking rewards. The company's second HAUS transaction was announced with Felix in October 2025, enabling Felix's launch of new financial markets on the Hyperliquid blockchain with Hyperion DeFi receiving a portion of fees generated from their markets, again, while continuing to earn staking rewards. We have initiated a partnership with native markets to support their qualification of USDH, the Hyperliquid native stablecoin under the network's Aligned Quota framework. We expect the partnership to go live in the fourth quarter and to hold some USDH on our balance sheet. Number five, ecosystem rewards. Through our active participation in the Hyperliquid DeFi ecosystem, we believe the company positions itself for the receipt of future potential token air drops, protocol incentives and other rewards that may become available periodically. In Q3 '25, the company's Validator received over 3 million tokens delegated from the Hyperliquid Foundation. We also anticipate an ecosystem rewards opportunity near term with Kinetiq. Kinetiq is the largest institutional liquid staking protocol on Hyperliquid with over $1 billion in total value locked. As a reminder, through our co-branded Validator partnership with Kinetiq, Hyperion DeFi directly contributes to network security while generating staking yields on both our HYPE as well as HYPE delegated from other network participants toward our Validator. With them, we have created our own liquid staking token used to participate in offchain strategies and in Hyperion DeFi. We have Kinetiq points, and we anticipate being eligible for their token generation event. We expect additional clarity on this topic in Q4. And number six, Life Sciences. Hyperion DeFi continues to develop its proprietary Optejet User Filled Device. As we enter the fourth quarter, we're focused on several key strategic initiatives, expanding our HYPE asset use service offerings, deploying assets into additional DeFi products on HyperEVM and continuing to strengthen our position in supporting HIP3-enabled market launches, which we expect will require significant long-term HYPE stakes. We believe the fundamentals supporting our strategy continue to strengthen. Hyperliquid holds a position as a leading decentralized perpetuals exchange with over 60% market share as of October 31. Daily average revenues continue to exceed $3 million, supporting the buyback mechanism that has sequestered over 30 million HYPE tokens. Our treasury position has grown to over 1.7 million HYPE tokens as of the end of Q3, positioning us to participate in the network's anticipated continued expansion. We believe this is just the beginning of our transformation in the same way that this is still the beginning for Hyperliquid. We're building what we believe is the new category of financial services company, one that combines public market accessibility with cutting-edge DeFi innovation. We hope that you all are as excited as I am for what's to come. With that, I'll turn the call over to David to walk through our third quarter financial results in detail.

Thank you, Hyunsu, and good afternoon, everyone. I'm pleased to join Hyperion DeFi as Chief Financial Officer and participate in my first earnings call with the company. My appointment became effective on September 29, so I've been able to observe our Q3 results from both an external and internal perspective. Having spent my career scaling financial services businesses at institutions like PayPal, SoFi and Cantor Fitzgerald, I believe Hyperion DeFi represents a unique opportunity to participate in the institutional adoption of blockchain technology. The company's strategic positioning and asset base are expected to provide multiple pathways for value creation that simply do not exist in traditional financial services. This was a very positive quarter for us. Let me hit the highlights. We achieved income from operations of $4.4 million and GAAP net income of $6.6 million, both of which are record highs for the company. This results in net income per common share on a basic and diluted basis of $0.26 and $0.05, respectively. We started the quarter with $45.5 million invested in HYPE tokens. We purchased another $20.0 million worth of HYPE, and we recognized GAAP accretion of $7.1 million this quarter. Separate from our treasury gains, our revenues from digital assets businesses, which we just launched in the quarter and are only beginning to scale exceeded $300,000. We also achieved $8.0 million of adjusted EBITDA, which removes some large nonrecurring tailwinds to the quarter, such as debt extinguishment, plus reverses some GAAP nuances on our liquid staking tokens, which otherwise would have resulted in additional mark-to-market gains in the quarter. I'm going to go through in detail our newly established key operating and financial results table, which is included on the first page of our earnings release and the third page of our earnings supplement, both of which can be found on our website. These are metrics that we think matter most to our business. Given the very recent initiation of our digital assets treasury strategy, we do not express any of these non-GAAP measures for periods prior to Q3 '25 as we don't think those comparisons would be useful for investors or for us as management. At the end of the quarter, about half of our digital asset treasury was in HYPE tokens and the other half was in HiHYPE, that's HiHYPE, which is our company's liquid staking token. To keep things simple, in this call, I'm going to refer to our HiHYPE as LST our liquid staking token. Liquid staking means that we can earn staking yields on our LSTs while also deploying them into certain parts of the Hyperliquid DeFi ecosystem and also into some off-chain strategies. For example, in the third quarter, we used some of our LSTs as collateral when we entered into covered call strategies on the price of HYPE, which netted us some profits in Q3. As mentioned by Hyunsu earlier, LSTs also help us in optimizing our positioning for certain potential ecosystem rewards, including the upcoming Kinetiq airdrop. For the avoidance of doubt, we are also able to deploy our HYPE tokens into certain DFA activities, including our HAUS agreement with Credo announced in September and our HAUS agreement with Felix announced in October. The point is we have chosen to own both HYPE and our LSTs for different business purposes, and it's important to understand how the accounting treatment is different between the 2 and how we adjust for those differences in our non-GAAP measures. So when you look at the first row of this table, HYPE digital assets, that is a GAAP measurement of our HYPE tokens in isolation and does not include our LSTs. HYPE tokens are held at fair market value, which was $38.0 million at the end of Q3 on 840,000 tokens and a HYPE price of $45.19. HYPE tokens are remarked each quarter for any mark-to-market changes. In contrast, our LSTs are considered digital intangible assets and are carried at the lower of cost basis and impaired value. To put it simply, we cannot mark up our LSTs. However, sometimes we are required to mark them down from a GAAP perspective. This means that from time to time, our balance sheet carrying value on LSTs could be lower than the market value if we had converted all our LSTs back to HYPE. And in addition, while we accrue HYPE tokens as staking rewards against our LSTs, the balance sheet and income impact of those rewards are not recognized in period from a GAAP perspective until the LSTs are converted back to HYPE. We estimate that the combination of these two factors, both the unrealized market value accretion on our LSTs plus our unrealized staking rewards on our LSTs would have added $4.9 million to our balance sheet and net income if we had elected to convert all our LSTs back to HYPE at the end of the third quarter. Therefore, in the second row of this table, we show our first non-GAAP measure gross HYPE Holdings of $77.8 million, which is the estimated market value of our combined HYPE and LSTs, inclusive of the $4.9 million LST pro forma REIT conversion. And this corresponds to 1.7 million tokens shown in the next row and a HYPE price of $45.19 at the end of the quarter. Next, we show the number of tokens delegated to our Validator as of September 30, which was 8.2 million HYPE tokens. This information is publicly available real time on the Hyperliquid blockchain and website interfaces when you look for the Kinetiq x Hyperion Validator. Therefore, we are also showing this figure as of October 31, which was 13.2 million tokens, representing 60% month-over-month growth versus September. While we expect the total number of tokens delegated to our Validator to increase over the long term, there are multiple forces that could impact this number, and we expect the figure to be volatile going forward. Net asset value, another non-GAAP metric, is meant to cover our estimated liquid digital assets less net debt totaling $74.5 million at the end of the quarter. It is calculated as our HYPE digital assets as adjusted to gross HYPE Holdings plus all current assets minus all current liabilities minus notional outstanding debt. Said another way, in the third quarter, our net asset value was $3.2 million lower than our gross HYPE Holdings as a function of outstanding net debt. Moving on to the next section in the table. We generated $303,000 of revenue in the third quarter completely from the digital asset strategy and none from our life sciences segment. This consisted of staking rewards, Validator commissions and our first HAUS agreement with Credo. Our revenue this quarter was substantially higher than the less than $2,000 of revenue realized in the third quarter of 2024. In order to provide a more consistent view of our staking activities in period and our non-GAAP measure adjusted revenue, we take GAAP revenue and add in the unrealized staking rewards on our LSTs, which gives us the next figure in this table of $361,000 of adjusted revenue in Q3. Our Q3 GAAP income from operations of $4.4 million, a record high for the company, includes $7.1 million total GAAP accretion in our digital assets treasury, including yield enhancement from our covered calls in Q3. In terms of our operating costs, research and development expenses decreased 89% year-over-year from $3.5 million in Q3 '24 to $374,000 in Q3 '25. And selling, general and administrative expenses declined 30% from $3.7 million in Q3 '24 to $2.6 million in Q3 '25. Keep in mind, our company has been through an extraordinary corporate transition over the past year. One year ago, in November 2024, the company provided an update that the Phase III CHAPERONE study on our proprietary drug device combination was not meeting its primary 3-year efficacy endpoint. The company then proceeded to execute significant cuts, which drove the operating cost savings that I just described. Today, we are continuing to pressure test every single expense line item, but we are also continuing to invest in having the right people, systems and processes to ensure that our digital assets treasury and DeFi business lines are both sustainable and scalable. As we continue scaling and diversifying our DeFi operations, we are implementing comprehensive risk management frameworks appropriate for our expanded activities. This includes enhanced treasury policies, operational controls and regulatory compliance procedures. Our Board composition and governance structure have been strengthened to provide appropriate oversight of our DeFi strategy. We are committed to maintaining the transparency and accountability that public market investors expect while operating at the forefront of financial innovation. Back to R&D. We continue to make progress in our development and testing of our next-generation Optejet User Filled Device, and we continue to be on track to have an active registration and listing with the FDA in the coming months. We previously announced that we expect operating costs to further decline once we achieve that milestone. We are also continuing to evaluate various strategic alternatives with regard to the future commercialization of the Optejet. The next row in this table is $6.6 million of net income in the third quarter. This was another record high for the company and compares to a net loss of $7.9 million in Q3 2024. In Q3 '25, other income was boosted by $2.4 million due to reductions in life sciences liabilities, which we do not expect to be recurring. In the third quarter, we had a $795,000 dividend payment to preferred shareholders, resulting in net income attributable to participating securities at $5.8 million. Before we get into per share metrics, let me remind everyone of our capital transition over the last 6 months. In June 2025, we received a $50 million PIPE investment involving the issuance of preferred shares and warrants, and we used the net proceeds primarily to establish our HYPE digital assets treasury. There are important conversion restrictions and other investor considerations related to the PIPE investment, which are more fully described in our SEC filings. However, if warrant holders choose to exercise their warrants for shares of common stock of the company, we would anticipate using a substantial portion of the related net proceeds to buy more HYPE tokens and generate more revenue and income. With all that being said, based on 6.0 million basic weighted average common shares outstanding and 29.0 million diluted weighted average common shares outstanding, net income per common share in the third quarter on a basic and diluted basis was $0.26 and $0.05, respectively. For the last row on this table, we are showing the non-GAAP measure adjusted EBITDA of $8.0 million in the third quarter. There are some important reconciliations from net income, so let's go point by point. Stock-based compensation is removed from our adjusted EBITDA. In Q3, stock-based compensation was negative $1.3 million, meaning it was a tailwind to Q3 net income. This was unusual. It happened primarily because of the timing of certain stock-based awards in connection with recent changes in the company's leadership. Next, we removed $223,000 interest expense in the quarter. Then we removed the $2.4 million of nonrecurring Q3 gains from reductions in life sciences liabilities. These were extinguishments or reductions in liabilities which we held on our balance sheet as of Q2. We also back out a few other nonrecurring items totaling $56,000 of GAAP gains, including gains on sales of life sciences equipment. Finally, we add the same $4.9 million LST pro forma reconversion that I mentioned earlier. From an operational perspective, we aim to optimize our HYPE versus LST holdings for long-term shareholder value and not for near-term income recognition implications. Within income from operations, total accretion on our digital assets was $7.1 million in Q3. But if we had converted all our LSTs back, we believe this figure would have instead been $12.0 million. Over time, we expect this line item on LST reconversion within adjusted EBITDA to cumulatively net to 0. If, for example, all LSTs are reconverted in Q4 '25, we would anticipate a positive $4.9 million tailwind to Q4 net income and would expect an offsetting negative $4.9 million in our Q4 adjusted EBITDA on this line item. That closes out my discussion on the key operating and financial results table. I am now going to briefly touch on cash flows, liquidity and guidance. Net cash used in operating activities decreased from $24.0 million for the 9 months ended September 30, 2024, to $10.7 million for the 9 months ended September 30, 2025. And in the past 3 months, net cash used in operating activities was less than $3 million. Owing to our successful corporate and financial transition over the past year in management's view, the company now has a very solid liquidity profile. At the end of the quarter, we had $8.2 million of cash and cash equivalents. Our outstanding loan owed to Avenue Capital is carried on the balance sheet at $7.7 million, which is net of $599,000 of unamortized debt discount, meaning the notional balance owed is $8.3 million. This loan is in an interest-only period at 8% fixed rate per annum until principal payments begin in 2027. And in addition, only half of the interest is payable in cash and the other half is payable in kind, increasing the balance of the loan, meaning the cash interest expense on this loan effectively at 4% per annum is expected to be less than $90,000 in the fourth quarter of 2025. On the preferred shares, we have a quarterly fixed dividend of $795,000. And while we recently elected to pay this in cash, we also have the option to pay in common shares instead. Our operations and cash flows are more fully described in our filings, but summing up a few items I just mentioned. About $3 million operating cash outflows, plus about $90,000 cash interest plus $795,000 in dividends, which don't need to be paid in cash, equates to approximately $3 million to $4 million combined at Q3 run rate versus $8.2 million of cash and cash equivalents at the end of the quarter. And in Q3, we raised $21.8 million net of expenses via our at-the-market equity offering program or ATM, which we believe demonstrates our ongoing ability to raise funds needed. Quickly highlighting investing and financing cash flows. Net cash used in investing activities increased from $161,000 for the 9 months ended September 30, 2024, to $65.6 million for the 9 months ended September 30, 2025, primarily to purchase HYPE Tokens. In June, we purchased $45.5 million worth of HYPE funded by our PIPE investments. In the third quarter, we raised $21.8 million net proceeds from our ATM and purchased an additional $20.0 million worth of HYPE. Since the end of the third quarter, we have continued raising funds via our ATM, and we have kept buying more HYPE tokens, including during mid-October following the broad market sell-off. We plan to continue to operate with a balanced approach regarding our fundraising and our HYPE purchases, and we'll continue to weigh all relevant financial and liquidity factors, including our opportunities to deploy any HYPE that we purchase. Looking ahead to Q4 2025, we expect continued growth in our DeFi-related revenues. Our pipeline of potential HYPE asset use service clients is robust with several institutional clients expressing interest in similar arrangements to our Credo and Felix partnerships. Staking and Validator revenues are expected to continue to increase as the Hyperliquid network expands and our staked and delegated positions grow. Our Kinetiq x Hyperion Validator currently sits among the top 10 Validators by stake with 13.2 million HYPE delegated as of October 31. On top of our option strategies, we are also exploring additional yield generation opportunities through HyperEVM DeFi protocols, though these remain in early stages. This is now the first time in the company's history that we are initiating financial guidance. As we consider our metrics that matter, while we have a strong point of view that HYPE is the most compelling digital asset and that buying HYPE may produce outsized returns to investors over time, we don't consider it useful to provide near-term price predictions. Instead, given the growth we are anticipating across all our business lines, we are pleased to give guidance focused on our operations. We anticipate Q4 '25 adjusted revenues between $475,000 and $515,000, representing a 31% to 43% quarter-over-quarter increase versus Q3. We expect our adjusted revenue growth rate to continue to accelerate into 2026. We are already off to a great start in Q4 with 2 new DeFi monetization partnerships already announced, plus 60% month-over-month growth on tokens delegated to our Validator from September to October. The other guidance we are providing is that we anticipate our operating cash flow to turn positive in 2026, meaning we aim to achieve a run rate where we don't need to raise funds, draw down on our cash or sell HYPE tokens in order to fund ongoing company operations. We are highly convicted on the opportunity ahead of us. And while 2025 has already been a remarkable year of firsts for the company, we believe that achieving operating cash flow positivity in 2026 will be one of the most important inflection points for our company. We are already engaging in 5 unique digital assets business strategies less than 6 months after establishing our digital assets treasury, and we expect all of them to achieve scale in 2026. As a reminder, these are staking yields, validated commissions, yield enhancement, DeFi monetization and ecosystem rewards. We believe our flywheel effect to compound our HYPE Holdings is simply unparalleled. With that, I'll turn it back over to Jason, and we look forward to answering your questions.

Thank you very much, David. [Operator Instructions] Here's our first question. How did the crypto liquidation event on October 10 impact your business?

Yes. While October 10 was a very unfortunate event that created substantial economic losses for many market participants, it really demonstrated the resilience of on-chain smart contract platforms. So Hyperliquid's centralized exchange suffered 0 downtime or outages and the applications on HyperEVM, including lending and borrowing, worked perfectly without incurring any bad debt, which was not the case for other exchanges. More specific to Hyperion DeFi, none of our business operations were affected given that we have not taken on any leverage positions with our HYPE assets. As we mentioned before, our focus is on deploying natively staked HYPE to secondary yield-generating mechanisms such as HIP3. And we also saw more importantly, that even after this flush out of risk, trading volumes and associated fees quickly returned to Hyperliquid, which demonstrates market that there is demand for participants to continue to position their strategies on decentralized exchanges.

Thank you. What do you think of recent regulatory developments and their impact on DeFi and your business?

Yes, great question. So we are currently in an extremely dynamic regulatory environment that is broadly favorable due to the current administration. And we would expect to continue to see clarity around how crypto and DeFi will interact with existing financial infrastructure. The passing of the GENIUS Act, for example, encourages continued innovation in stablecoins under a more clear regulatory framework, which serves as a tailwind for the development of Hyperliquid native stablecoins like USDH. David, it would be great, too, if you want to add your thoughts here.

Absolutely, and thanks, Hyunsu. We place ourselves on the cutting edge of financial innovation. And because of that, we believe that we have a duty and an obligation to operate responsibly. This means choosing to operate in ways where we believe we can navigate various regulatory outcomes, and we welcome any additional clarity with regards to cryptocurrency, digital assets and DeFi regulation.

Thank you, David. This investor asks, are you considering an additional capital raise?

Great question. So after raising $50 million for our PIPE back in June, we moved very quickly to purchase HYPE and establish the foundations of our business, which, again, as a reminder, is our Validator and the development of the proprietary HAUS platforms and other additional initiatives to engage with and support Hyperliquid. Now these efforts support the growth of the ecosystem, and our focus is not simply buying and holding the assets, but to build and scale real businesses on chain. So we've established that foundation and the focus would be to continue to accumulate HYPE and refining what we've built. I'll hand it off to David here just with regard to capital markets activity.

Sure. Thanks, Hyunsu. We believe that HYPE is the most compelling digital asset and that over time, we are going to purchase more. As we think through how we might contemplate an additional raise and additional fundraisings, we're going to consider important financial factors like liquidity, like market conditions and like how we think we can deploy our HYPE tokens most effectively throughout our various business strategies. As mentioned previously, we did raise $21.8 million via our ATM in the third quarter, with which we bought back another $20.0 million of HYPE tokens and use cash for other purposes. And we have continued raising funds via our ATM in the fourth quarter.

Thank you, David. This one is on Aster and Lighter. They're asking, do you see it as a credible threat to Hyperliquid?

So there have been on-chain perpetuals markets before, like GMX and dYdX, and we expect that others may continue to come in the future. In our opinion, none of them are like Hyperliquid. So holistically, it is true that when a new entrant like Aster or Lighter join a market that is seeing a lot of attention, users may be interested in trying the shiny new thing. Competition is healthy because it encourages everyone to refine their product and be better, and it also helps the pie grow bigger, in this case, on-chain derivatives. But beyond this, Hyperliquid has done so many things differently. It's entirely self-funded with no VC capital. It's distributed over 30% of its token supply to early users. It remains credibly neutral. It's even refunded user funds when network issues have emerged. And more importantly, its rate of innovation is unmatched. It seems that those that are coming into the perpetual debt space now are playing a little bit of catch-up, whereas with Hyperliquid, with products like HIP3, which enable the permissionless launch of non-crypto assets and also aligned quota assets, it creates new demand things for HYPE and expands the universe of participants to Hyperliquid, and that's where we, at Hyperion see the opportunity.

Great. Thank you. Robert asked, is mNAV a useful metric to you?

So we believe mNAV was an appropriate metric during the first generation of digital asset treasuries when there wasn't a proper way to measure the value of the company besides the value of the assets in the balance sheet versus its market cap. We see this kind of changing now with new strategies from the, call it, the second generation of digital asset treasuries with strategies like staking, restaking derivatives. None of them, however, are able to do so far what Hyperion has done within the Hyperliquid ecosystem with real revenue-generating businesses built on top of our treasury asset HYPE. So not to reiterate the point too much, but the HYPE Asset Use Service products are ways of not only just earning the native staking yield, but compounding those returns through mechanisms that also support the growth of new products, expanding the user base to Hyperliquid and also onboarding and scaling financial activities. And so we see a world where companies like ours are actually measured by a combination of both the asset value and future cash flows.

Great. Thank you, Hyunsu. This one is regarding how do we -- what measures do we take to secure our tokens?

So self-custody infrastructure using infrastructure provided by Anchorage Digital Bank. There is also ways to utilize the native multi-sig offered on Hyperliquid to build secondary level protections on top of our existing HSM and MPC infrastructure. And it's our job to continue to diligence other service providers, infrastructure providers to ensure that we are always up to date and using the best mechanisms possible to protect the HYPE assets on behalf of the company and our shareholders.

How would we differentiate ourselves from other [ debts ]?

The simple answer is that we do not just buy and hold our treasury assets. It seems that staking to the network and contributing to security should just be baseline. Now Hyperion runs our own top 10 Validator with over 13 million HYPE stake to it, which does become real revenues for Hyperion. But more so than that, we have so many mechanisms to use that stake HYPE and redeploy it into the ecosystem. And these strategies not just compound yield and generate sources of revenue, but they also help create the flywheel effect that brings more users and activity to Hyperliquid. And as we mentioned before, with the Hyperliquid assistance fund, we have a precedent where the more fees and revenues that are generated within the ecosystem, 99% of them are going back to purchase back HYPE. And so we think this is a really powerful mechanism, and it's our role with Hyperion to continue to innovate financial products that enable this to continue.

Thank you. This one is regarding the Kinetiq airdrop. Is that baked into our forecast?

David, do you want to speak to this one?

Absolutely, and thank you for the question. So here is what we know. We have Kinetiq points. We believe we will be eligible for the token generation of airdrop. We do not know what the financial implications will be, nor do we have a reasonable basis to take a view on if it's going to be material or not material. But there's 2 important points that I want to make here. The first is we have not adversely positioned our balance sheet or our operations to try and take advantage of this opportunity. Our joint Validator agreement between us and Kinetiq and Pier Two is a top 10 Validator on the Hyperliquid blockchain with north of 13 million tokens as of the end of October, which is 60% month-over-month growth. In addition, the activities that we do with Kinetiq include our liquid staking HiHYPE token, which provides real utility to us in terms of being able to stake our HYPE, deploy into HyperEVM and use in off-chain situations like when we used HiHYPE as collateral for our Q3 covered call option strategy, which netted some profits in Q3. So this is why in our earnings supplement, we present these various business activities as compounding on top of each other, staking yields plus Validator commissions plus yield enhancement plus DeFi monetization plus ecosystem rewards. Because we really do believe that this all adds up together. And the second point that we want to make here, we don't know when or if there's going to be other opportunities like this, but we've only been doing this less than 6 months, and there's already been 2. The first was when the Hyperliquid Foundation delegated to our Validator 3 million tokens in the third quarter. And the second now with this Kinetiq rewards, for us, this shows that our flywheel effect is really beginning to work. We are building these businesses on the Hyperliquid blockchain, which both promote and monetize Hyperliquid's use. And now the ecosystem is rewarding us back. So this gives us even more conviction in our core thesis that HYPE is the most compelling digital asset, that the Hyperliquid blockchain is ripe for innovation and monetization. And we're very, very pleased to be simultaneously supporting and sharing in the upside of this growing ecosystem.

Thank you. Jonathan, one of our legacy shareholders asked, why have we not sold the Optejet?

Thanks for the question. Yes, with regard to the Optejet, we're taking a rational approach to that side of the business. It has commercialization potential. We maintain both patents and IP developed over the years. We are still completing R&D and testing to reach a position of commercial viability. So we've had a number of conversations with people in the industry, and we're taking it one step at a time. David, feel free to add some color here.

Thanks, Hyunsu, and that's right. All of our knowledge and conversations support our thesis that the best financial outcome for the company is to continue towards that next milestone of having an active registration and listing with the FDA. And in the fourth quarter, we've continued to do some testing towards that milestone. But we will continue to have a rational approach and evaluate options available to us.

Thank you. I think we have time for one last question. They're asking, are you going to hire more people?

So Hyperion DeFi's mandate is to continue to accumulate and generate revenue on what we believe to be the most compelling digital asset type, so that our shareholders can benefit from this comprehensive exposure to decentralized finance. Now to accomplish that, we must continue to operate responsibly and minimize cost on the operating side. So currently, we do remain fully supported across key business functions, and we want to remain very lean as we continue to move forward. Now the beauty of blockchain-based businesses is that similar to SaaS or other Web 2 products is that once they are properly designed, they are almost infinitely scalable. Hyperion DeFi has long-term ambitions far beyond simply operating in DeFi actually. Our goal is to become the bridge between institutional finance and on-chain financial primatives. And that's going to take time, and it's going to require a team of really some of the best-in-class people across industries, which obviously we've already started to build. And so a very long-winded way of saying it's definitely in the road map, but we want to focus on our core business first, which is ensuring that we develop a robust revenue-generating business lines within this DeFi space built on Hyperliquid.

Thank you. So this concludes the question-and-answer session. If you have additional questions that we didn't get to, please feel free to send them to [email protected]. And we, of course, will be happy to get back with you. At this time, I'd like to now turn the call back over to Interim CEO, Hyunsu Jung, for his closing remarks.

All right. Thank you, Jason. As we conclude today's call, I want to emphasize the significance of what we've accomplished and what lies ahead. Q3 2025 was our first full quarter operating as Hyperion DeFi, and we believe the results demonstrate the viability of our strategic transformation. We believe our performance shows that a public company can successfully participate in DeFi ecosystems while maintaining institutional-grade governance and creating shareholder value. We believe our achievements this quarter were expanding our HYPE treasury to launching innovative revenue-generating services to appointing world-class financial leadership position us for accelerated growth in Q4 and beyond. We view the broader macro environment for institutional DeFi adoption as continuing to improve. In our view, regulatory clarity is increasing, institutional infrastructure is maturing and the performance advantages of platforms like Hyperliquid are becoming more recognizable. We believe Hyperion DeFi is positioned at the center of this transformation. Looking ahead, our priorities remain focused on 3 key areas: continuing to build our strategic HYPE position, expanding our portfolio of DeFi services and developing the institutional infrastructure necessary to bring traditional finance onto blockchain platforms. We're so grateful for the support of our shareholders throughout this transformation and excited about the opportunities ahead. Hyperion DeFi is building for the future of institutional finance, and we are just getting started.

Thank you, ladies and gentlemen. And with that, this does conclude today's teleconference. We thank you for your participation, and enjoy the rest of your evening.