Hyperliquid Strategies Inc. FORM 10-Q for the Quarter Ended March 31, 2026

Overview of Hyperliquid Strategies Inc.

Hyperliquid Strategies Inc. (HSI) is a publicly-listed digital asset treasury company based in the United States. The company’s primary business is accumulating and managing a treasury of HYPE tokens, the native cryptocurrency of the Hyperliquid Layer-1 blockchain ecosystem. HSI aims to provide investors with exposure to the HYPE token through staking, yield optimization, and active participation in the Hyperliquid ecosystem.

Reverse Recapitalization and Acquisition

In December 2025, HSI completed a reverse recapitalization transaction, merging with Rorschach I LLC and acquiring Sonnet BioTherapeutics Holdings, Inc. This deal provided HSI with $880.4 million in gross proceeds from a private placement and contributions of HYPE tokens. The majority of these funds are intended to establish HSI’s HYPE treasury strategy.

As part of the transaction, HSI issued 123,354,259 shares of common stock and 166,173 shares of Series A preferred stock. The company also assumed certain warrants and other securities from the acquired companies. HSI’s current outstanding securities include:

• 124,220,108 shares of common stock
• 166,173 shares of Series A preferred stock
• 29,821,281 warrants to purchase common stock
• Contingent value rights (CVRs) issued to former Sonnet shareholders

Disposition of Sonnet Assets

In March 2026, HSI entered an agreement to transfer certain developmental assets and patents from Sonnet to Guidant Bio Therapeutics Inc. in exchange for a 40% equity stake in Guidant.

Equity Facility

HSI has established a $1 billion equity facility with Chardan Capital Markets LLC, allowing the company to sell shares of its common stock to Chardan over time. The proceeds from this facility are intended to be used for general corporate purposes, including potential purchases of additional HYPE tokens.

Financial Performance

For the three months ended March 31, 2026, HSI reported the following financial results:

• Revenue: $2.6 million (all from net staking rewards)
• Unrealized gain on digital assets: $198.4 million
• Selling, general & administrative expenses: $7.2 million
• Net income: $152.5 million

For the nine months ended March 31, 2026, HSI reported:

• Revenue: $3.1 million (all from net staking rewards)
• Unrealized gain on digital assets: $105.2 million
• Loss on HYPE token commitment: $169.2 million
• IPR&D write-off from Sonnet acquisition: $35.6 million
• Selling, general & administrative expenses: $10.7 million
• Net loss: $165.4 million

As of March 31, 2026, HSI had the following financial position:

• Cash and cash equivalents: $113.1 million
• HYPE digital assets: $689.0 million
• Working capital: $111.0 million
• Stockholders’ equity: $743.5 million

Analysis of Financial Performance and Position

HSI’s financial results for the three and nine month periods ending March 31, 2026 reflect the significant changes to the company’s business following the reverse recapitalization and acquisition transactions completed in late 2025.

The primary driver of HSI’s financial performance is the value of its HYPE token holdings. The company reported substantial unrealized gains on its digital assets during both the quarterly and nine-month periods, reflecting the appreciation in the value of HYPE. However, HSI also recognized a large one-time loss of $169.2 million related to the decreased value of the HYPE tokens contributed as part of the reverse recapitalization.

HSI’s revenue during this period was entirely derived from staking rewards earned on its HYPE token holdings. The company reported $2.6 million and $3.1 million in net staking revenue for the quarterly and nine-month periods, respectively. This revenue stream is expected to be an ongoing source of income as HSI continues to grow its HYPE treasury.

The company’s selling, general and administrative expenses were $7.2 million for the quarter and $10.7 million for the nine-month period. These costs include professional fees, salaries, insurance, and other overhead associated with operating the business. HSI expects these expenses to decrease in the near-term as it completes the integration of the acquired Sonnet assets and operations.

HSI reported a net income of $152.5 million for the three-month period, but a net loss of $165.4 million for the nine-month period. The quarterly profit was driven by the substantial unrealized gains on digital assets, while the nine-month loss was impacted by the one-time HYPE token commitment loss and the IPR&D write-off from the Sonnet acquisition.

From a balance sheet perspective, HSI appears to be in a strong financial position as of March 31, 2026. The company had $113.1 million in cash and cash equivalents, along with $689.0 million in HYPE digital assets. This provides HSI with ample liquidity and resources to continue executing on its HYPE treasury strategy. The company’s working capital of $111.0 million and stockholders’ equity of $743.5 million further demonstrate its solid financial footing.

Outlook and Key Risks

Going forward, HSI’s success will be closely tied to the performance of the HYPE token and the Hyperliquid blockchain ecosystem. The company’s ability to grow its HYPE treasury and generate staking rewards will be critical drivers of its financial results.

Some key risks and uncertainties facing HSI include:

• Volatility in the price of HYPE tokens and the broader cryptocurrency market
• Potential regulatory changes that could impact the digital asset industry
• Competition from other digital asset investment vehicles
• Challenges in executing its HYPE treasury management strategy
• Integration risks associated with the acquired Sonnet assets and operations

Overall, HSI appears to be well-positioned to capitalize on the growth of the Hyperliquid ecosystem through its HYPE token treasury strategy. The company’s strong financial position, including its substantial cash reserves and digital asset holdings, provide it with the resources needed to weather potential market volatility and continue expanding its business. However, investors should closely monitor HSI’s progress in executing its strategy and managing the risks inherent in the digital asset space.