Hyperliquid Strategies Inc
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
PURR$8.82+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001193125-26-212519
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001193125-26-450174
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 91 current paragraphs.
37 unchanged; 31 reworded; 20 added; 24 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
HYPE Token Acquisitions
Current report
During the three months ended September 30, 2026, we purchased an additional 9,078,739 HYPE tokens for approximately $785.9 million. No HYPE tokens were purchased during the three months ended September 30, 2025.
Current report
Equity Post Closing
Current report
272,478,097 shares and 200,550,458 shares, respectively of Common Stock;
Current report
In September 2026, we amended the Purchase Agreement with Chardan three times. Amendment No. 1, entered into on September 1, 2026, increased the aggregate commitment from $1.0 billion to $2.5 billion and, after aggregate sales reached $1.0 billion, imposed an exchange cap prohibiting sales below $12.02 per share if they would cause such issuances to exceed 42,641,847 shares, or 19.99% of the Common Stock outstanding immediately before the amendment, unless stockholder approval is obtained or Nasdaq rules do not require it. Amendment No. 2, entered into on September 14, 2026 revised the VWAP Purchase Price to 98.5% of VWAP for VWAP and Intraday VWAP Purchases and 97.0% of VWAP for Off-Hour VWAP Purchases, subject to certain adjustments. Amendment No. 3, entered into on September 14, 2026 superseded Amendment No. 2 and amended those updated pricing terms to apply following the sale of the first 160,000,000 shares under the Purchase Agreement.
Current report
As of September 30, 2026 and June 30, 2026, we cumulatively issued 150,704,100 shares and 76,063,600 shares, respectively, of Common Stock under the Equity Facility. Cumulative net proceeds of $1.6 billion and $646.6 million were raised as of September 30, 2026 and June 30, 2026, respectively. For the three months ended September 30, 2026 and 2025, proceeds received are net of a 2.5% fee paid under the Equity Facility, which was equal to $23.4 million and $0 million, respectively.
Current report
Revenue
Current report
Staking Revenue
Current report
Validator Commission Income
Current report
On May 13, 2026, we launched a validator node on the Hyperliquid network in partnership with Nexus Research Labs, Inc., parent of Unit Labs (“Unit”), a digital asset infrastructure and staking services provider, as “Hyperliquid Strategies x Unit” (the "Validator") . We stake the majority of our tokens to the Validator. The Validator operates within the HyperCore infrastructure and participates in the HyperBFT consensus mechanism, producing blocks and validating transactions alongside the network’s active validators. The Validator is able to accept delegations from both us and third-party HYPE holders (the customers), and we earn commission income from staking rewards at the Validator level. Under our validator services agreement with Unit, commission revenue earned at the Validator level is shared with Unit, who is responsible for the day-to-day technical operation of the validator infrastructure, while we exercise direct oversight over validator performance and compliance with our staking risk management framework. The Validator earns commissions, paid in HYPE tokens, for its services. Commission income is recognized as revenue when blocks or transactions are successfully validated in accordance with the protocol. Under our Validator Service Agreement with Unit, Unit controls the operation, maintenance, monitoring, and technical management of Validator Nodes and Platform on behalf of us. As such, we have concluded that we do not control the validator service, and therefore we are not the principal to the validation service. Accordingly, we present validator commission income on a net basis in Staking and Validator Commission revenue, reflecting only the portion of protocol rewards and commission to which we are entitled after amounts payable to Unit.
Current report
Our Equity Facility qualifies as a derivative. Any changes in the fair value of any equity sold between the time the forward was entered into (trade execution under the Equity Facility) and the ultimate settlement is treated as other income (expense). This income (expense) is classified as “Other expense” on our condensed consolidated statements of operations.
Current report
For the Three Months Ended September 30, 2026 Compared with the Three Months Ended September 30, 2025
Current report
Revenue
Current report
The Company did not have revenue for the three months ended September 30, 2025.
Current report
Other Income (Expense)
Current report
No other income (expense) was recognized for the three months ended September 30, 2025.
Current report
No income tax expense (deferred) was recognized for the three months ended September 30, 2025.
Current report
Net cash used in operating activities was approximately ($17.1) million, which includes net income of $620.6 million and net changes in operating assets and liabilities of $3.6 million, offset by ($641.2) million of net non-cash items consisting of $803.0 million of unrealized gains on HYPE digital asset and $12.3 million of staking and validator commission income, partially offset by $171.7 million of deferred income tax expense, $1.7 million of stock-based compensation expense, a $0.5 million loss from equity method investment in Guidant and $0.1 million of issuance of shares to the board of directors.
Current report
There was no net cash used in investing activities during the period.
Current report
Net cash provided by financing activities was approximately $0.3 million, which was attributable to proceeds from the issuance of equity.
Removed paragraphs (24)
Previous report
Concurrently with the execution of the BCA, (i) certain accredited investors entered into subscription agreements with us and Sonnet, pursuant to which Sonnet agreed to issue, and the subscribers agreed to purchase, immediately prior to the Closing, shares of Sonnet common stock, pursuant to a private placement in accordance with Section 4(a)(2) of the Securities Act (the “Closing PIPE”) and(ii) certain accredited investors entered into contribution agreements with Rorschach, pursuant to which such investors agreed to contribute HYPE tokens and/or cash to Rorschach immediately prior to the Closing (the “Contributions”). The gross proceeds received from the Closing PIPE and the Contributions consisted of $299.9 million of cash and 12,517,592 HYPE tokens valued at $580.5 million based on the fair value of the shares issued for the tokens for an aggregate fair value of $880.4 million, before deducting the allocated transaction costs. At the Closing, the shares of Sonnet common stock and membership interests in Rorschach issued pursuant to the Closing PIPE and the Contributions, respectively, were converted into an aggregate of 123,354,259 shares of HSI common stock (“Common Stock”) and 166,173 shares of HSI Series A preferred stock (“Series A Preferred Stock”). The gross proceeds amount of $880.4 million was recorded to Common Stock and Series A Preferred Stock based on the respective par values, with the excess of the gross proceeds above par values recorded to additional paid-in capital. Additional paid-in capital was reduced for the impact of cash paid for transaction costs of $2.3 million related to the PIPE financing. Additionally, as noted in Note 5 of the accompanying financial statements, on the Closing Date, such approximately 12.5 million HYPE tokens were valued at $411.3 million, resulting in a loss on commitment of $169.2 million recognized by the Company on the HYPE tokens. The majority of net proceeds from the Transaction are intended to establish our HYPE treasury strategy. In December 2025, we purchased an additional 321,224 HYPE tokens for approximately $9.0 million at the respective times of purchase. During the three months ended March 31, 2026, we purchased an additional 5,884,940 HYPE tokens for approximately $160.4 million at the respective times of purchase.
Previous report
Pursuant to the terms of the BCA, at the effective time of the Transaction (the “Effective Time”):
Previous report
(i) Each share of Sonnet common stock issued and outstanding immediately prior to the Effective Time (excluding the shares of Sonnet common stock issued to the subscribers in the Closing PIPE) was canceled and converted into the right to receive one-fifth of one share of Common Stock and one Contingent Value Right (a “CVR”) (together, the “Per Share Merger Consideration”)
Previous report
(ii) Each Sonnet vested restricted stock unit (the “Sonnet Vested RSU”) outstanding immediately prior to the Effective Time was canceled and converted into the right to receive the Per Share Merger Consideration;
Previous report
(iii) Each Sonnet in-the-money warrant outstanding immediately prior to the Effective Time was canceled and converted into the right to receive, for each share of our Common Stock the holder of such Sonnet in-the-money warrant would have received had such Sonnet in-the-money warrant been exercised in full in accordance with its terms immediately prior to the Effective Time, the Per Share Merger Consideration;
Previous report
(iv) Each Sonnet out-of-the-money warrant outstanding and unexercised immediately prior to the Effective Time (a) ceased to represent a Sonnet out-of-the-money warrant in respect of shares of Sonnet Common Stock and was assumed by us and automatically converted into a warrant to acquire the same number of shares of Common Stock, subject to the same terms and conditions as were applicable to the applicable Sonnet out-of-the-money warrant immediately prior to the Effective Time, with the right to receive, for each share of Sonnet Common Stock the holder of such Sonnet out-of-the-money warrant would have received had such Sonnet out-of-the-money warrant been exercised in full in accordance with its terms immediately prior to the Effective Time, the Per Share Merger Consideration or (b) entitled the holder of such Sonnet out-of-the-money warrant to such other consideration that such holder was entitled to receive pursuant to the terms of such holder’s out-of-the-money warrant; and
Previous report
(v) All shares of Sonnet Common Stock held in the treasury of Sonnet were canceled without any conversion thereof and no payment or distribution was or will be made with respect thereto.
Previous report
Also pursuant to the terms of the BCA, (a) the equity holders of Rorschach immediately prior to the Closing received, in the aggregate, that number of shares of Common Stock equal to one-fifth of the aggregate amount of the cash and HYPE Tokens Value (as defined in the BCA) held by Rorschach immediately prior to the Closing, divided by $1.25 (except that one equity holder of Rorschach received, in lieu of a portion of the shares of Common Stock otherwise issuable to it, shares of Series A Preferred Stock), and (b) at the Closing we issued to the Advisor (as defined below) 7,761,860 shares of Common Stock (the “Advisor Shares”) and the Advisor Warrants (defined below).
Previous report
124,220,108 shares of Common Stock;
Previous report
Per the requirements of the Purchase Agreement, we paid total fees of $0.0 million and $0.3 million to Chardan for the three and nine months ended March 31, 2026. Additional commitment fees will be required depending on the amount of shares sold by us, including $0.3 million payable once we have received an aggregate of $25.0 million in proceeds from sales of Common Stock under the Purchase Agreement and $0.6 million payable once we have received an aggregate of $50.0 million proceeds from sales of Common Stock under the Purchase Agreement.
Previous report
Contingent Value Rights Agreement
Previous report
Also pursuant to the BCA, at the Closing we entered into a Contingent Value Rights Agreement (the “CVR Agreement”) with Continental Stock Transfer & Trust Company, as rights agent (“Rights Agent”), pursuant to which holders of shares of Sonnet common stock, excluding the shares of Sonnet common stock issued pursuant to the Closing PIPE, and in-the-money warrants, in each case, as of immediately prior to the Effective Time, received one contingent value right (each, a “CVR”) for each then-outstanding share of Sonnet common stock held by such stockholder (or, in the case of Sonnet in-the-money warrants, each share of Sonnet common stock for which such in-the-money warrants was exercisable into as of such date). The CVR Payment (as defined in the CVR Agreement) will be payable upon the closing of a sale, license, transfer, disposition, divestiture or other monetization transaction (i.e., a royalty transaction) (or a series of transactions) and/or winding down of, or other disposition(s) of any the Company Legacy Assets (as defined in the CVR Agreement) during the period beginning on the Closing Date and ending on the third anniversary of the Closing Date. The shares of Common Stock issuable in connection with the CVR Payment are subject to certain deductions pursuant to the terms of the CVR Agreement.
Previous report
Three months ended March 31, 2026
Previous report
Other Income
Previous report
Results of Operations
Previous report
Nine months ended March 31, 2026
Previous report
Revenue for the nine months ended March 31, 2026 totaled $3.1 million, which was net staking revenue. As noted above, we present staking rewards as revenue on a net basis. Thus, there was no cost of revenue for the nine months ended March 31, 2026.
Previous report
IPR&D write-off from Sonnet acquisition
Previous report
We recognized a loss of $35.6 million on acquired IPR&D from the Sonnet acquisition for the nine months ended March 31, 2026, as it was determined to have no alternative future use at the time of the asset acquisition.
Previous report
Our selling, general and administrative and research and development expenses for the nine months ended March 31, 2026 were $10.7 million, which includes professional fees, fees related to the Equity Facility, salaries and wages, insurance, and research and development costs.
Previous report
Other Income
Previous report
Income tax expense (deferred)
Previous report
We recognized an income tax expense of $60.5 million for the nine months ended March 31, 2026 related to the creation of a deferred tax liability at the closing of the transaction in addition to a deferred tax liability created by the increase in value of our HYPE digital tokens during the period.
Previous report
As disclosed in the June 30, 2025 financial statements of Rorschach, there was substantial doubt about Rorschach's ability to continue as a going concern for at least one year from the date the financial statements were issued. This was based on Rorschach having insufficient funds to pay its liabilities, absent any additional funding, which obtaining such funding was uncertain. During the nine months ended March 31, 2026, we raised significant capital through the Closing PIPE, and entered into the Purchase Agreement, which has alleviated the substantial doubt about our ability to continue as a going concern.
Reworded paragraphs (31)
Previous wording
References in this report (the “Quarterly Report”) to “we,” “our,” “us,” “HSI” or the “Company” refer to Hyperliquid Strategies Inc, and references to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations as of March 31, 2026 and for the three and nine months ended March 31, 2026 should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.
Current wording
References in this report (the “Quarterly Report”) to “we,” “our,” “us,” “HSI” or the “Company” refer to Hyperliquid Strategies Inc, and references to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations as of September 30, 2026 and June 30, 2026 and for the three months ended September 30, 2026 and 2025 should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.
Previous wording
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 27, 2025 in connection with the Transaction (as defined below) (the “Final Prospectus”), and in other documents we may file from time to time with the SEC. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Current wording
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the section titled "Risk Factors" included in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “2026 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 27, 2026, and in other documents we may file from time to time with the SEC. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Previous wording
On July 11, 2025, Sonnet BioTherapeutics Holdings, Inc. (“Sonnet”), the Company, Rorschach I LLC (“Rorschach”), Sonnet Merger Sub Inc., and Rorschach Merger Sub LLC entered into a Business Combination Agreement (as subsequently amended, the “BCA”) pursuant to which, subject to the terms and conditions contained in the BCA, (i) Rorschach Merger Sub LLC would merge with and into Rorschach with Rorschach surviving the merger as a direct wholly owned subsidiary of the Company and (ii) immediately following the Rorschach Merger, Sonnet Merger Sub Inc. would merge with and into Sonnet, with Sonnet surviving the merger as a direct wholly owned subsidiary of the Company.
Current wording
On July 11, 2025, the Company, Sonnet BioTherapeutics Holdings, Inc. (“Sonnet”), Rorschach I LLC ("Rorschach"), Sonnet Merger Sub Inc., and Rorschach Merger Sub LLC entered into a Business Combination Agreement (as subsequently amended, the “Transaction Agreement”) pursuant to which on December 2, 2025 (the “Closing Date”), (i) Rorschach Merger Sub LLC merged with and into Rorschach (the "Rorschach Merger") with Rorschach surviving the Rorschach Merger as a direct wholly owned subsidiary of the Company and (ii) immediately following the Rorschach Merger, Sonnet Merger Sub Inc. merged with and into Sonnet (the "Sonnet Merger"), with Sonnet surviving the Sonnet Merger as a direct wholly owned subsidiary of the Company (collectively, the “Transaction”). Prior to the consummation of the Transaction, Rorschach owned 100% of the Company. The combination of Rorschach and HSI was accounted for as a reverse recapitalization (the “Reverse Recapitalization”), with Rorschach surviving as the accounting acquirer. Under the Reverse Recapitalization, the assets and liabilities of the Company were recorded at historical cost. No goodwill or intangible assets were recognized. Consequently, the condensed consolidated financial statements of the Company reflect the operations of Rorschach for accounting purposes, and together with the financial position and results of operations of HSI and Sonnet subsequent to the Closing Date.
Previous wording
As of March 31, 2026, we had the following outstanding securities (in addition to the CVRs):
Current wording
As of September 30, 2026 and June 30, 2026, we had the following outstanding securities (in addition to the contingent value rights issued in connection with the BCA):
Previous wording
Certain out-of-the-money warrants previously issued by Sonnet, exercisable for up to an aggregate of 2,426,481 shares of Common Stock.
Current wording
Certain warrants previously issued by Sonnet, exercisable for up to an aggregate of 1,263,814 shares of Common Stock.
Previous wording
On March 31, 2026, we entered into an asset purchase agreement (the "APA") with Guidant Bio Therapeutics Inc. ("Guidant"). In connection with the consummation of the transactions contemplated by the APA on that date, we transferred $1.325 million in cash, various developmental assets and patents related to Sonnet's tumor delivery platforms, certain employees and Sonnet's Australian subsidiary to Guidant, and provided a deferred purchase price of $1.0 million subsequent to the execution of the APA, which is included with "other current liabilities" as of March 31, 2026 on our condensed consolidated balance sheets. In exchange, we received a 40% common stock interest in Guidant. In connection with the APA, we engaged Guidant under a transaction services agreement (the "TSA") to provide services to us for fees of $0.175 million, paid at the closing of the APA.
Current wording
During the year ended June 30, 2026, we entered into an asset purchase agreement (the "APA") with Guidant Bio Therapeutics Inc. ("Guidant"). In connection with the consummation of the transactions contemplated by the APA, on March 31, 2026, we transferred $1.325 million in cash, various developmental assets and patents related to Sonnet's tumor delivery platforms, certain employees and Sonnet's Australian subsidiary to Guidant, and subsequently, in accordance with the terms of the APA, provided an additional $1.0 million upon the execution of the definitive investment agreements. In exchange, we received a 40% common stock interest in Guidant. In connection with the APA, we engaged Guidant under a transaction services agreement (the "TSA") to provide services to us for fees of $0.175 million, paid at the closing of the APA.
Previous wording
On October 22, 2025, we entered into an agreement (the “Purchase Agreement”) to purchase up to $1.0 billion of shares of our Common Stock with Chardan Capital Markets LLC (“Chardan”). Pursuant to and upon the terms and subject to the conditions and limitations set forth in the Purchase Agreement, beginning on the later of the Closing Date and the date the registration statement registering the resale of such shares is effective (the “Commencement Date”), we have the right from time to time at our option to direct Chardan to purchase up to $1.0 billion of shares of our Common Stock. Sales of our Common Stock to Chardan under the Purchase Agreement, and the timing of any sales, will be determined by us from time to time in our sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of our Common Stock and determinations by us regarding the use of proceeds from any sale of such Common Stock. The net proceeds from any sales under the facility will depend on the frequency with, and prices at which the shares of our Common Stock are sold to Chardan. To the extent we sell shares under the Purchase Agreement, we currently plan to use any proceeds therefrom for general corporate purposes, including potential purchases of HYPE tokens.
Current wording
On October 22, 2025, we entered into an agreement (the “Purchase Agreement”) to purchase up to $1.0 billion of shares of our Common Stock with Chardan Capital Markets LLC (“Chardan”). Pursuant to and upon the terms and subject to the conditions and limitations set forth in the Purchase Agreement, we have the right from time to time at our option to direct Chardan to purchase up to $1.0 billion of shares of our Common Stock. Sales of our Common Stock to Chardan under the Purchase Agreement, and the timing of any sales, are determined by us from time to time in our sole discretion and depend on a variety of factors, including, among other things, market conditions, the trading price of our Common Stock and determinations by us regarding the use of proceeds from any sale of such Common Stock. The net proceeds from any sales under this facility (the "Equity Facility") will depend on the frequency with, and prices at which the shares of our Common Stock are sold to Chardan. To the extent we sell shares under the Purchase Agreement, we currently plan to use any proceeds therefrom for general corporate purposes, including potential purchases of HYPE tokens.
Previous wording
Pursuant to the BCA, on the Closing Date, we entered into an Advisor Rights Agreement (the “Advisor Rights Agreement”) and a Strategic Advisor Agreement (the “Advisory Agreement”) with Rorschach Advisors LLC (the “Advisor”), and we issued to the Advisor three warrants (each, an “Advisor Warrant”). Pursuant to the Advisor Rights Agreement, among other things, for so long as the Advisor and its affiliates continue to own at least 10% of the total number of shares of our Common Stock held by the Advisor as of immediately following the Closing (the “Minimum Holding Condition”), the Advisor will have the right to nominate a number of persons (the “Advisor Directors”) to our board of directors (the “Board”) equal to the result of (rounded up to the nearest whole number) (a) the percentage determined by dividing (i) the number of shares of Common Stock beneficially owned by the Advisor (together with its affiliates) (on an “as-converted” and “as exercised” basis and without applying any “blocker” provisions limiting the exercise or conversion of any securities held by any such person) by (ii) the total number of shares of Common Stock then outstanding (on an “as-converted” and “as exercised” basis), multiplied by (b) the then current size of the Board (counting, for purposes of such determination, all vacancies as filled), but in any event at least one director, who shall be the Chairman of the Board. In addition, for so long as the Minimum Holding Condition is satisfied, we will take all necessary action to cause the Board to be comprised of at least five directors, including the Advisor Directors, and to consist of the requisite number of directors meeting the independence requirements of the Nasdaq Stock Market (or other securities exchange on which the Common Stock is then listed). The Advisor Rights Agreement also provides the Advisor with certain information rights, and subjects the Advisor Shares and Advisor Warrants (and underlying shares of Common Stock) to lock-up restrictions applicable, subject to certain exceptions, for a period ending on the earlier of (x) the first anniversary of the Closing Date, (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, or (z) with respect to any securities subject to the lock-up, the date on which the last sale price of the Common Stock equals or exceeds an amount per share of Common Stock equal to 150% of the price (or deemed price) for which the Advisor acquired such securities.
Current wording
Pursuant to the BCA, on the Closing Date, we entered into an Advisor Rights Agreement (the "Advisor Rights Agreement") and a Strategic Advisor Agreement (the "Advisory Agreement") with Rorschach Advisors LLC (the "Advisor"), and we issued to the Advisor three warrants (each, an "Advisor Warrant"). Pursuant to the Advisor Rights Agreement, among other things, for so long as the Advisor and its affiliates continue to own at least 10% of the total number of shares of our Common Stock held by the Advisor as of immediately following the Closing (the “Minimum Holding Condition”), the Advisor will have the right to nominate a number of persons (the "Advisor Directors") to our board of directors equal to the result of (rounded up to the nearest whole number) (a) the percentage determined by dividing (i) the number of shares of Common Stock beneficially owned by the Advisor (together with its affiliates) (on an “as-converted” and “as exercised” basis and without applying any “blocker” provisions limiting the exercise or conversion of any securities held by any such person) by (ii) the total number of shares of Common Stock then outstanding (on an “as-converted” and “as exercised” basis), multiplied by (b) the then current size of the board of directors (counting, for purposes of such determination, all vacancies as filled), but in any event at least one director, who shall be the Chairman of the Board. In addition, for so long as the Minimum Holding Condition is satisfied, we will take all necessary action to cause the board to be comprised of at least five directors, including the Advisor Directors, and to consist of the requisite number of directors meeting the independence requirements of the Nasdaq Stock Market (or other securities exchange on which the Common Stock is then listed). The Advisor Rights Agreement also provides the Advisor with certain information rights, and subjects the Advisor Shares and Advisor Warrants (and underlying shares of Common Stock) to lock-up restrictions applicable, subject to certain exceptions, for a period ending on the earlier of (x) the first anniversary of the Closing Date, (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, or (z) with respect to any securities subject to the lock-up, the date on which the last sale price of the Common Stock equals or exceeds an amount per share of Common Stock equal to 150% of the price (or deemed price) for which the Advisor acquired such securities. The lock-up restrictions lapsed during the quarter ended September 30, 2026.
Previous wording
Pursuant to the Advisory Agreement, the Advisor has agreed to use commercially reasonable efforts to provide to us with certain technical advisory services related to the digital asset ecosystem, including Hyperliquid and related digital assets, developments in digital asset industries, the selection of third-party vendors with respect to asset management and related digital asset services and other strategic advice regarding digital assets treasury operations for a term of five years (subject to earlier termination under certain circumstances). The Advisory Agreement provides that, unless otherwise agreed by Advisor and subject in all respects to applicable law, in the event that we raise equity or equity-linked financing during the term, the Advisor will be entitled to receive grants of equity in the form of (a) shares of Common Stock equal to 5% of the number of shares of Common Stock issued or issuable pursuant to such financing and (b) warrants to purchase an aggregate number of shares of Common Stock equal to 15% of the number of shares of Common Stock issued or issuable pursuant to such financing, in substantially the same form as the Advisor Warrants, or as otherwise may be agreed by us and the Advisor. The Advisor shall also be entitled to receive such additional compensation, if any, as may be approved by the Board.
Current wording
Pursuant to the Advisory Agreement, the Advisor has agreed to use commercially reasonable efforts to provide us with certain technical advisory services related to the digital asset ecosystem, including Hyperliquid and related digital assets, developments in digital asset industries, the selection of third-party vendors with respect to asset management and related digital asset services and other strategic advice regarding digital assets treasury operations for a term of five years (subject to earlier termination under certain circumstances). The Advisory Agreement provides that, unless otherwise agreed by Advisor and subject in all respects to applicable law, in the event that we raise equity or equity-linked financing during the term, the Advisor will be entitled to receive grants of equity in the form of (a) shares of Common Stock equal to 5% of the number of shares of Common Stock issued or issuable pursuant to such financing and (b) warrants to purchase an aggregate number of shares of Common Stock equal to 15% of the number of shares of Common Stock issued or issuable pursuant to such financing, in substantially the same form as the Advisor Warrants, or as otherwise may be agreed by us and the Advisor. The Advisor has waived its right to receive such additional equity grants on account of any equity or equity-linked financing consummated by us following the Closing, unless and until it revokes such waiver with respect to future financings. Revocation requires two weeks’ advance notice provided to us and no such notice has been provided through the date of this filing. The Advisor shall also be entitled to receive such additional compensation, if any, as may be approved by the board of directors.
Previous wording
During the three and nine months ended March 31, 2026, we granted 326,312 RSUs and recognized stock-based compensation expense of $0.2 million during each period.
Current wording
During the three months ended September 30, 2026, we granted 434,601 RSUs and recognized stock-based compensation expense of $1.7 million. No stock-based compensation expense was recognized for three months ended September 30, 2025.
Previous wording
On December 8, 2025, we announced that our Board had authorized a stock repurchase program of up to $30 million of the Company’s outstanding Common Stock that will be in place for up to 12 months. Through March 31, 2026, a total of 3,067,097 shares of Common Stock were repurchased by us for a total of approximately $10.6 million.
Current wording
On December 8, 2025, we announced that our board of directors had authorized a stock repurchase program of up to $30 million of the Company’s outstanding Common Stock that will be in place for up to 12 months. During the three months ended September 30, 2026 and 2025, a total of 2,726,094 shares and 0 shares, respectively, of Common Stock were repurchased by us for a total of approximately $17.3 million and $0.0 respectively. On October 23, 2026, our board of directors approved an increase to the stock repurchase program from $30 million to up to $100 million of the Company’s outstanding shares of Common Stock, and an extension of the program through October 31, 2027.
Previous wording
Also on the Closing Date, the Board adopted and we filed with the Secretary of State of the State of Delaware a certificate of designation (the “Certificate of Designation”) designating the rights, preferences and limitations of the Series A Preferred Stock. Up to 200,000 shares were designated Series A Preferred Stock, with each share of Series A Preferred Stock having a stated value equal to $1,000 (the “Stated Value”). Each share of Series A Preferred Stock will be convertible, at the option of the holder, into that number of shares of Common Stock determined by dividing the Stated Value by $6.25 (the “Conversion Price”). The Conversion Price may be adjusted pursuant to the Certificate of Designations for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence of a Fundamental Transaction (as defined in the Certificate of Designation). A holder of Series A Preferred Stock will not have the right to convert any portion of its Series A Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.
Current wording
Also on the Closing Date, the Board adopted and we filed with the Secretary of State of the State of Delaware a certificate of designation (the “Certificate of Designation”) designating the rights, preferences and limitations of the Series A Preferred Stock. Up to 200,000 shares were designated Series A Preferred Stock, with each share of Series A Preferred Stock having a stated value equal to $1,000 (the “Stated Value”). Each share of Series A Preferred Stock will be convertible, at the option of the holder, into that number of shares of Common Stock determined by dividing the Stated Value by $6.25 (the “Conversion Price”). The Conversion Price may be adjusted pursuant to the Certificate of Designation for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence of a Fundamental Transaction (as defined in the Certificate of Designation). A holder of Series A Preferred Stock will not have the right to convert any portion of its Series A Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.
Previous wording
Digital assets are initially recorded at cost and then subsequently remeasured at fair value as of the balance sheet date with changes in fair value recognized as unrealized gains or losses in operating income (expense). Upon derecognition of the digital assets, we recognize realized gains or losses in operating income (expense) on the condensed consolidated statements of operations, based upon the fair value of digital assets on the date of derecognition.
Current wording
Digital assets are initially recorded at cost and then subsequently remeasured at fair value as of the balance sheet date with changes in fair value recognized as unrealized gains or losses in operating income (expense). Upon derecognition of the digital assets, we recognize realized gains or losses in operating income (expense) on the condensed consolidated statements of operations, based upon the fair value of digital assets on the date of derecognition. We recognize revenue by applying the guidance in Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).
Previous wording
We recognize revenue by applying the guidance in ASC 606, Revenue from Contracts with Customers (“ASC 606”). HYPE tokens earned from validators, in the form of staking rewards, are recognized as revenue when we satisfy our performance obligations (i.e., providing our tokens to the validator in order to validate blocks or transactions as determined by the protocol) ratably over the contract term. The HYPE tokens earned are non-cash consideration and therefore measured at fair value at the inception of each contract.
Current wording
We stake substantially all of our HYPE tokens. HYPE tokens earned from validators, in the form of staking rewards, are recognized as revenue when we satisfy our performance obligations (i.e., providing our tokens to the validator in order to validate blocks or transactions as determined by the protocol) ratably over the contract term. Staking rewards accrue every minute and are distributed to us on a daily basis. The HYPE tokens earned are non-cash consideration and therefore measured at fair value at the inception of each contract.
Previous wording
Selling, general and administrative and research and development expenses consist primarily of payroll and related expenses, legal and other professional services, insurance expense, and expenses related to the Equity Facility. We anticipate that our general and administrative expenses will decrease in the short term as requirements to support our continued research and development and commercial activities decline subsequent to the establishment of our treasury strategy, in addition to the completion of the BCA and APA, discussed in Note 5 of the accompanying financial statements.
Current wording
Selling, general and administrative and research and development expenses
Previous wording
The Company has selected June 30 as its fiscal year end. The following is a summary of the Company’s results of operations for the fiscal quarter and nine months ended March 31, 2026.
Current wording
The following is a summary of the Company’s results of operations for the three months ended September 30, 2026 and 2025.
Previous wording
Revenue for the three months ended March 31, 2026 totaled $2.6 million, which was net staking revenue. As noted above, we present staking rewards as revenue on a net basis. Thus, there was no cost of revenue for the three months ended March 31, 2026.
Current wording
Revenue for the three months ended September 30, 2026 totaled $12.3 million, which was primarily staking revenue. Our increase in revenue reflects the fact that we stake substantially all of our HYPE tokens and for the three months ended September 30, 2025, no HYPE tokens were purchased or held by us. As noted above, we present staking rewards as revenue on a net basis.
Previous wording
Unrealized gain on digital tokens for the three months ended March 31, 2026 was $198.4 million, resulting from the fair value changes of digital assets during the three months ended March 31, 2026.
Current wording
Unrealized gain on digital tokens for the three months ended September 30, 2026 was $803.0 million, resulting from the fair value changes of HYPE digital assets during the three months ended September 30, 2026. The price per HYPE token increased from $65.04 as of June 30, 2026 to $90.99 as of September 30, 2026.
Previous wording
Unrealized gain on HYPE digital tokens for the nine months ended March 31, 2026 was $105.2 million, resulting from the fair value changes of HYPE at March 31, 2026. Additionally, we recognized a loss on HYPE contribution commitment of $169.2 million, which was the result of a decrease in fair value of the 12.5 million HYPE tokens from the original commitment amount, as further described in Note 5 of the accompanying condensed consolidated financial statements.
Current wording
During the three months ended September 30, 2025, we recognized an unrealized loss on HYPE contribution commitment of $13.4 million, which was primarily the result of a decrease in fair value of the 12.5 million HYPE tokens from a price of $46.37 per HYPE token at the date such HYPE tokens were committed to us from investors, down to $45.19 per HYPE token as of September 30, 2025.
Previous wording
Our selling, general and administrative and research and development expenses for the three months ended March 31, 2026 were $7.2 million, which includes professional fees, salaries and wages, insurance, and research and development costs.
Current wording
Our selling, general and administrative and research and development expenses for the three months ended September 30, 2026 and 2025 were $7.6 million and $0.0 million, respectively, which includes professional fees, salaries and wages and insurance costs. The increase was due to our commencement of substantive operations subsequent to September 30, 2025.
Previous wording
Other income for the three months ended March 31, 2026 totaled approximately $1.4 million. Other income for the three months ended March 31, 2026 primarily resulted from interest income, which is derived from money market funds, treasury assets, and interest received on cash positions held with financial institutions.
Current wording
Other expense for the three months ended September 30, 2026 totaled approximately $14.8 million. Other expense for the three months ended September 30, 2026 primarily resulted from an expense under the Equity Facility related to the increase in the price of our equity between the share issuance and settlement as well as a loss of $0.5 million related to our share of losses from our equity method investment in Guidant. These expenses were partially offset by $1.0 million of interest income, which is derived from money market funds, treasury assets, and interest received on cash positions held with financial institutions.
Previous wording
We recognized an income tax expense of $42.7 million for the three months ended March 31, 2026 primarily driven by the increase in value of our HYPE digital tokens during the period.
Current wording
We recognized an income tax expense of $172.3 million for the three months ended September 30, 2026, primarily driven by the increase in value of our HYPE digital tokens during the period.
Previous wording
Under Accounting Standards Codification (“ASC”) Subtopic 205-40,“Presentation of Financial Statements—Going Concern”, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations as they become due within one year after the date that our financial statements are issued. Since our inception, we have had a history of recurring net losses from operations and working capital deficits.
Current wording
Under ASC Subtopic 205-40,“Presentation of Financial Statements—Going Concern”, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations as they become due within one year after the date that our financial statements are issued.
Previous wording
Our net income (loss) was $152.5 million and ($165.4) million for the three and nine months ended March 31, 2026, respectively. As of March 31, 2026, we had an accumulated deficit of approximately $165.9 million. As of March 31, 2026, we had cash and cash equivalents of $113.1 million and HYPE digital assets with a fair value of $689.0 million, working capital (inclusive of cash and cash equivalents) of $111.0 million and stockholders’ equity of $743.5 million.
Current wording
Our net income (loss) was $620.6 million and $(13.4) million for the three months ended September 30, 2026 and 2025, respectively. As of September 30, 2026 and June 30, 2026, we had accumulated earnings of approximately $925.5 million and $304.9 million, respectively. As of September 30, 2026, we had cash and cash equivalents of $254.6 million and HYPE digital assets with a fair value of $3.5 billion, working capital (inclusive of cash and cash equivalents) of $249.9 million and stockholders’ equity of $3.4 billion. As of June 30, 2026, we had cash and cash equivalents of $137.9 million and HYPE digital assets with a fair value of $1.9 billion, working capital (inclusive of cash and cash equivalents) of $148.7 million and stockholders’ equity of $1.9 billion.
Previous wording
During the nine months ended March 31, 2026, our sources and uses of cash were as follows:
Current wording
During the three months ended September 30, 2026, our sources and uses of cash were as follows:
Previous wording
Net cash used in investing activities for the nine months ended March 31, 2026 was approximately ($160.9) million, which was primarily related to the cash acquired from the acquisition of Sonnet, offset by the purchase of HYPE digital assets.
Current wording
Net cash used in investing activities was approximately ($774.0) million, which was primarily related to the purchase of HYPE digital assets and U.S. Dollar Coin ("USDC"), partially offset by $0.1 million sales of USDC.
Previous wording
Net cash provided by financing activities for the nine months ended March 31, 2026 totaled approximately $289.2 million, which was primarily attributable to $302.1 million of net cash proceeds from the Closing PIPE, and subsequent equity issuances, offset by $2.3 million in payments for equity issuance costs and $10.6 million in payments for the repurchase of Common Stock.
Current wording
Net cash provided by financing activities was approximately $907.7 million, which was primarily attributable to $925.0 million of net cash proceeds from the issuance of equity, partially offset by $17.3 million in payments for the repurchase of Common Stock.
Previous wording
Net cash used in operating activities was approximately ($15.3) million, which includes a net loss of ($165.4) million, offset by $157.1 million of net non-cash items and net changes in operating assets and liabilities of ($7.0) million.
Current wording
Net cash used in operating activities was approximately ($0.1) million, which includes a net loss of $(13.4) million and net changes in operating assets and liabilities of ($0.1) million, partially offset by a loss on HYPE contribution commitment of $13.4 million.
Previous wording
We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. We do not participate in transactions that create relationships with unaudited consolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Current wording
We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2026 and June 30, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Previous wording
In the normal course of business, we enter into contracts for services. The amount owed by us as of March 31, 2026 is $6.4 million and is included in “accounts payable” and “other current liabilities” on the condensed consolidated balance sheets.
Current wording
In the normal course of business, we enter into contracts for services. The amount owed by us as of September 30, 2026 and June 30, 2026 is $6.1 million and $3.7 million, respectively and is included in “accounts payable” and “other current liabilities” on the condensed consolidated balance sheets.
Previous wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. There are no critical accounting estimates as of March 31, 2026.
Current wording
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. There are no critical accounting estimates as of September 30, 2026 and June 30, 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Selling, general and administrative and research and development expenses consist primarily of payroll and related expenses, legal and other professional services, and insurance expenses.
Current report — wording carried from elsewhere
Selling, general and administrative and research and development expenses
Current report — wording carried from elsewhere
During the three months ended September 30, 2025, our sources and uses of cash were as follows:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On December 2, 2025, the closing of the transactions contemplated by the BCA (collectively, the “Transaction”) was completed (the “Closing,” and such date, the “Closing Date”). The combination of Rorschach and HSI was accounted for as a reverse recapitalization (the “Reverse Recapitalization”), with Rorschach surviving as the accounting acquirer. Under the Reverse Recapitalization, our assets and liabilities were recorded at historical cost. No goodwill or intangible assets were recognized. Consequently, our condensed consolidated financial statements reflect the operations of Rorschach for accounting purposes, and together with the financial position and results of operations of HSI and Sonnet subsequent to the Closing Date.
Previous report — wording carried elsewhere
Other income for the nine months ended March 31, 2026 totaled approximately $2.2 million. Other income for the nine months ended March 31, 2026 primarily resulted from interest income, which is derived from money market funds, treasury assets, and interest received on cash positions held with financial institutions.