Q3 2025 Hyperion DeFi Inc Earnings Call

Speaker #1: If anyone should require operator assistance during the I will now turn the conference over to Jason Assad . Thank you . Jason . You may begin .

Speaker #2: afternoon and welcome Good to Hyperion . Defies third quarter 2025 call . Joining me earnings today are interim CEO , Hyunsu Jung and Knox .

Speaker #2: Before we get CFO David please note that our started , remarks today may include forward looking statements . These statements are risks and subject to uncertainties , and actual may results differ materially .

Speaker #2: During this call , use words like anticipate , could enable , , intend estimate , expect , believe will , should , project , and similar expressions which indicate forward looking For a more , potential , statements .

Speaker #2: discussion of other comprehensive these and risks , please our filings with refer to SEC available on sec.gov and in the Investor Relations section of our website at We'll Hyperion .

Speaker #2: reference certain non-GAAP financial measures also today . Please earnings refer to our release and earnings supplement Com . for a full these reconciliation of non-GAAP measures to the most comparable GAAP measures .

Speaker #2: reference certain non-GAAP financial measures also today . Please earnings refer to our release and earnings supplement Com . for a full these reconciliation of non-GAAP measures to the most comparable GAAP measures . morning's call will start with remarks from Hansu and David , followed by Q&A prepared this .

Speaker #2: We be Questions may submitted via email IR at Hyperion to Com now turn the call over to interim our CEO , Hyunsu Jung .

Speaker #2: .

Speaker #3: the hyper acknowledge that successfully executed what I believe is one of the most

Speaker #3: establishing ourselves as a premier institutional gateway to corporate . Today , innovation Hyperion Defy Hyperion . stands as public company building a focus to strategic ophthalmic height token .

Speaker #3: We're not simply holding digital Treasury . assets . actively We're participating in the sustainable growth and of what we become the backbone of next I'll financial services .

Speaker #3: hyper liquid defy thesis is blockchain straightforward finance is most significant the traditional trading governance . liquid Our represents the convergence of institutional grade of performance with electronic decentralized innovation , offering up to 100,000 transactions per subsecond finality fully on .

Speaker #3: all institutions the first US increasingly recognize the blockchain . As utility of adoption , second with infrastructure advantages position it to capture market only share extensive derivatives but also as part of its larger sustainable layer one blockchain ecosystem .

Speaker #3: token native all is as of information October 31st , based on external significant resources , Hyper liquid is the number one revenue generating 2025 , and blockchain and 11 cryptocurrency by market cap .

Speaker #3: Both figures , focused on excluding stablecoins the , hyper decided generates revenue of approximately annualized based on And not an October 2025 observed run of 3.5 million per day .

Speaker #3: Both figures , focused on excluding stablecoins the , hyper decided generates revenue of approximately annualized based on And not an October 2025 observed run strong , Additionally , on hyper liquid platforms built are rate per day , total bringing the fees to approximately 5 million per day .

Speaker #3: Across the blockchain and platforms . Approximately 2 million in fees 99% of hyper liquid revenues are used by approximately hyper liquid Assistance Fund , which is cumulatively and owned 34.25 million tokens with a value of market approximately 1.45 billion .

Speaker #3: There have been over 800,000 cumulative Hyperlipid marketplace purchased users since inception Liquid's . Hyper token maximum supply is 1 billion , circulating supply is 337 million and corresponds to a market approximately capitalization of approximately 14.3 billion .

Speaker #3: There have been over 800,000 cumulative Hyperlipid marketplace purchased users since inception. Liquid's Hyper token has a maximum supply of 1 billion, with a circulating supply of 337 million, which corresponds to a market capitalization of approximately $12 billion in trading volume on Liquid Hyper.

Speaker #3: Cumulative hyper liquid fees have 700 million since exceeded inception , and cumulative cryptocurrency perpetuals trading volume on hyper liquid has exceeded 3 trillion since inception .

Speaker #3: With that in mind , what sets Hyperion Defy apart from other digital asset treasury companies is our comprehensive engagement strategy . While companies like MicroStrategy pioneered the corporate Bitcoin ecosystem treasury model and others have followed with various token strategies , our approach with hyper goes liquid far beyond simple accumulation .

Speaker #3: The market opportunity we're addressing continues to expand Upcoming rapidly . network upgrades , such as the recently announced Hp3 , expected to create are new for users opportunities retail to participate in the institutions to ecosystem .

Speaker #3: For example , the requirement for 500,000 stake to launch new perpetual futures market has generated and is expected to continue to generate natural demand for large , long term token which is exactly what positions , we've worked to build through our strategic accumulation .

Speaker #3: Our positioning is competitive unique as the public company focused on believe we first and largest have advantages in hype . capital We access , regulatory compliance and credibility that will be difficult for institutional competitors to replicate .

Speaker #3: 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 .

Speaker #3: One of our most Q3 was achievements launching our first hype asset use service agreement with trading proprietary firm crypto K9 . This innovative structure allows institutional clients to stake type position utilize our reduce their costs on transaction hyper liquid , while both parties share the fee resulting savings .

Speaker #3: 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.

Speaker #3: A business model that we believe has no equivalent in traditional finance . Our vision extends beyond generating robust revenues on our treasury assets .

Speaker #3: We're actively supporting the buildout of institutional infrastructure to bridge traditional finance and decentralized finance . The appointment of David Knox as our chief financial officer exemplifies the strategy .

Speaker #3: David previously served as both head of capital head of finance markets and 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 hyper liquid infrastructure .

Speaker #3: 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 We're not waiting for others chain .

Speaker #3: to start this flywheel . We're accelerating it day by day alongside other ecosystem builders developing institutional grade products and services that leverage Hyper liquids , unique blockchain technology .

Speaker #3: 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 .

Speaker #3: First , direct exposure to token appreciation . As we expect , the hyper liquid ecosystem to continue to grow and capture market share decentralized in derivatives .

Speaker #3: Second , we anticipate recurring revenue from our growing portfolio of DeFi including services , validation , asset use services , and future product offerings .

Speaker #3: 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 including the assets , potential for USD monetization through strategic partnerships .

Speaker #3: I want to provide a quick rundown of our six business activities in Q3 . Number one , staking rewards . This starts with our Kinetic Hyperion validator .

Speaker #3: The company stakes its hype to validator and its earns hyper rewards . Number two validator commissions . The company operates its under a joint validator operator's agreement , together with Kinetic and Pier two earns commissions on rewards delivered to third party tokens delegated to the validator number three yield enhancement .

Speaker #3: The company pursues accretive strategies to enhance yield earned on its tokens in Q3 25 . This included the launch of the company's high hype 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 staking liquid activities .

Speaker #3: Number four: DeFi monetization. The company supports and DeFi monetizes activity on the hyper-liquid blockchain, with practices we believe to be sustainable and scalable.

Speaker #3: In Q3 25 . This included the launch of the company's proprietary hype asset Use or House platform , which allows its clients to unlock unique utility on hyper liquid while generating fee Hyperion .

Speaker #3: income for 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 .

Speaker #3: The company announced its first House transaction with Credo in September 2025 , which enables credo to receive the benefit of lower trading fees on liquid the hyper decentralized exchange with Hyperion DeFi receiving a portion of those savings as income .

Speaker #3: While continuing to earn staking rewards . The company's second house transaction was announced with Felix in October 2025 , enabling Felix's launch of new financial markets on the hyper liquid blockchain with Hyperion DeFi receiving a portion of fees generated from their markets .

Speaker #3: Again while continuing to earn staking rewards . We initiated a have partnership with native markets to support their qualification of USD . The hyper liquid native stablecoin under the network's quote aligned asset framework .

Speaker #3: We expect this partnership to go live in the fourth quarter and to hold some USD on our balance sheet . Number five ecosystem rewards there are active participation in hyper liquid DeFi ecosystem .

Speaker #3: We believe the company positions itself for the receipt of future potential token airdrops . Protocol incentives , and other rewards that may be become available periodically in Q3 25 , the company's validator received over 3 million tokens delegated from hyper Liquid Foundation .

Speaker #3: We also anticipate an ecosystem rewards opportunity near term with kinetic . Kinetic is the largest institutional liquid staking protocol on hyper liquid , with over 1 billion in total value locked .

Speaker #3: As a reminder , there are co-branded validator partnership with Kinetic Hyperion D5 directly contributes to network security while generating staking yields on both our hype as well as hyper delegated from other network participants toward our validator .

Speaker #3: them , we have created With our own liquid staking token used to participate in off chain strategies and an hyper DeFi . We have kinetic points , and we anticipate being eligible for their token generation event .

Speaker #3: We expect additional clarity on this topic in Q4 , and number six , Life Sciences . Hyperion DeFi continues to develop its proprietary user filled device .

Speaker #3: As we enter the fourth quarter , we're focused on several key strategic initiatives expanding our hype , asset use service offerings , deploying assets into DeFi products on hyper , EVM , and continuing to strengthen our position in supporting Hip three enabled market launches , which we expect will require significant long term hype stakes .

Speaker #3: believe the We fundamentals supporting our strategy continue to strengthen hyper liquid holds a position as a leading decentralized , perpetual exchange with over 60% market share as of October 31st .

Speaker #3: Daily average revenues continue to exceed 3 million , supporting the buyback mechanism that is sequestered over 30 million tokens . Our Treasury position has grown to over 1.7 million tokens as of the end of Q3 , positioning us to participate in the network's anticipated continued expansion .

Speaker #3: We believe this is just the beginning of our transformation , in the same way that this is still the beginning for hyper liquid building , we're what we believe is a new category of financial services company , one that combines public market accessibility with cutting edge DeFi innovation .

Speaker #3: 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 results in detail third quarter financial .

Speaker #4: Thank you . Hyunsu Jung , 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 .

Speaker #4: appointment My became effective on September 29th , I've been so able to observe our results Q3 from both an external and internal perspective .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: 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 tokens .

Speaker #4: 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 .

Speaker #4: We also achieved $8.0 million of adjusted EBITDA , which removes some large , non-recurring tailwinds to the quarter , such as debt extinguishment plus reverses , some GAAP our liquid nuances on staking tokens , which otherwise would have resulted in additional mark to market gains in the quarter .

Speaker #4: I am 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 .

Speaker #4: 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 , 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 .

Speaker #4: At the end of the quarter, about half of our digital asset treasury was in Hype tokens and the other half was in High Hype.

Speaker #4: That's high . Why ? Which is our company's liquid staking token things . To keep simple in this call , I'm going to refer to our high hype as LST .

Speaker #4: 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 hyper liquid DeFi ecosystem , and also into some off chain strategies .

Speaker #4: 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 .

Speaker #4: As mentioned by Hyunsu Jung earlier , LSTs also help us in optimizing our positioning for certain potential ecosystem rewards , including the upcoming kinetic AirDrop .

Speaker #4: For the avoidance of doubt, we are also able to deploy our hype tokens into certain DFA activities, including our House agreement with Credo, announced in September, and our House agreement with Felix, announced in October.

Speaker #4: 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 two .

Speaker #4: 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 and tokens isolation and does not include our LSTs .

Speaker #4: Hype tokens are held at fair market value , which was $38.0 million at the end of Q3 on 840,000 tokens and a high price of $45.19 .

Speaker #4: 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 .

Speaker #4: To put it simply , we cannot mark up our LSTs . However , sometimes we are required to mark them down to make GAAP perspective .

Speaker #4: 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 .

Speaker #4: 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 the 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 sheet balance and net income if we had elected to convert all our LSTs back to hype at the end of the third quarter .

Speaker #4: Therefore , in the second row of this table , we show our first non-GAAP measure hype gross 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 reconversion .

Speaker #4: 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.

Speaker #4: Next , we show the number of tokens delegated to our validator . As of September 30th , which was 8.2 million tokens . This information is publicly available real time on the hyper liquid blockchain and website interfaces .

Speaker #4: When you look for the kinetic Ex , Hyperion validator , therefore , we're also showing this figure as of October 31st , which was 13.2 million tokens , representing growth month versus September .

Speaker #4: expect the While we 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 .

Speaker #4: 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 .

Speaker #4: It is calculated as our digital assets as adjusted to gross hype Holdings all , plus 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 .

Speaker #4: Moving on to the next section in the table, we generated $303,000 of revenue in the third quarter, completely from the Digital Assets strategy and none from our Life Sciences segment.

Speaker #4: This consisted of staking rewards , validator commissions , and our first house agreement with Credo . Our revenue this quarter was substantially higher than the less than $2,000 of revenue realized in the third quarter of 2020 .

Speaker #4: For , 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 .

Speaker #4: Our Q3 , GAAP income from operations of $4.4 million , a record high for the company , includes 7.1 million total GAAP in our digital Treasury assets , , including yield enhancement from our covered calls in Q3 .

Speaker #4: terms of our In 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 .

Speaker #4: Keep in mind , our company has been through an extraordinary corporate transition over the past year . One year ago , in November 2020 , for the company provided an update that the phase three chaperone study on our proprietary drug device combination was not meeting its primary three year efficacy endpoint .

Speaker #4: The company then execute proceeded to 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 and having the right people , systems and processes to ensure that digital our assets , treasury and DeFi business lines are both sustainable and scalable .

Speaker #4: 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 .

Speaker #4: Our board composition and governance have been structure strengthened to provide appropriate oversight of our DeFi strategy . We are committed to maintaining the transparency and accountability that public market investors expect .

Speaker #4: 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 user filled device , and we continue to be on track to have an active registration and listing with the FDA in the coming months .

Speaker #4: We previously announced that we expect to operating costs to further decline once we achieve that milestone . also continuing to We are evaluate various strategic alternatives with regard to the commercialization of the Jet .

Speaker #4: The next row in the table is $6.6 million of net income. This was another record high for the company and compares to a net loss of $7.9 million in Q3 2024.

Speaker #4: In Q3 , 25 other income was boosted by $2.4 million due to reductions in sciences life liabilities , which we do not expect to be recurring third in the we had a $795,000 dividend payment to quarter , preferred shareholders , resulting in net income attributable to participating securities at $5.8 million .

Speaker #4: Before we per get into share metrics , let me remind everyone of our capital transition over the last six months . In June 2025 , we received a $50 million Pipe investment involving the issuance of preferred shares and warrants .

Speaker #4: And we use the net proceeds primarily to establish digital our assets . Treasury are . important There conversion restrictions and other investor related to the considerations Pipe investment , which are more fully described our in SEC filings .

Speaker #4: 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 buy more to Hype tokens and generate more and revenue income .

Speaker #4: 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 .

Speaker #4: 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 we are table , showing the non-GAAP measure adjusted EBITDA of $8.0 million in the third quarter .

Speaker #4: 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 .

Speaker #4: Stock-based compensation was meaning it -$1.3 million, which was a tailwind to Q3 net income. This was unusual. It happened primarily because of the timing of certain stock-based awards and connections with recent changes in the leadership of the company.

Speaker #4: Next, we removed $223,000 in interest expense for the quarter. Then, we removed the $2.4 million of non-recurring Q3 gains from reductions in life sciences liabilities.

Speaker #4: These were extinguishments or reductions in liabilities , which we held on our balance sheet . As of Q2 also back out a few .

Speaker #4: other non-recurring We 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 long for shareholder value and not for near-term income recognition implications within income from operations .

Speaker #4: 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 time , we expect .

Speaker #4: this line item Over on LST reconversion within adjusted to EBITDA cumulatively net to zero . 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 -$4.9 million in our Q4 adjusted EBITDA on this line item closes out my discussion on the key operating that and financial results table .

Speaker #4: I am going to briefly touch on cash flows , liquidity and guidance . Net cash used in operating activities , decreased from $24.0 million for the nine months ended September 30th , 2024 , to $10.7 million for the nine months ended September 30th , 2025 , and in the past three months , net cash used in operating activities was less than $3 million , owing to our successful corporate and financial transition over the past year and management's the company now has a very solid liquidity profile .

Speaker #4: the end of At 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 , is net of $599,000 of Unamortized debt discount , meaning the balance notional owed is $8.3 million .

Speaker #4: 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 .

Speaker #4: On the preferred shares . We have a quarterly fixed dividend of $795,000 , and while we elected to recently pay this in cash , we also have the option to pay in common shares instead .

Speaker #4: Our operations and cash flows are more fully described in our filings . But summing up a few items , I just mentioned , $3 million operating about cash outflows , plus about $90,000 cash interest , plus dividends , which $795,000 in don't need to be paid in cash , equates to approximately 3 to $4 million combined at Q3 run rate , versus $8.2 million of cash and cash equivalents at the end of the quarter .

Speaker #4: 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 nine months ended September 30th , 2024 , to $65.6 million for the nine months ended September 30th , 2025 , primarily to purchase Hype tokens .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: We plan to continue to operate with a balanced approach regarding our fundraising and our hype purchases, and will continue to weigh all relevant financial and liquidity factors, including our opportunities to deploy any hype that we purchase.

Speaker #4: Looking ahead to Q4 2025 , we expect continued growth in our DeFi related revenues . Our pipeline of hype , potential asset use service clients is robust , with several institutional clients expressing interest in similar arrangements to our credo .

Speaker #4: And Felix partnerships staking and validator revenues are expected to continue to increase as the Hyperlipid network expands and are staked and delegated positions grow .

Speaker #4: Our kinetic Hyperion validator currently sits among the top ten validators by stake , with 13.2 million hype delegated as of On top of October 31st .

Speaker #4: Our option strategies are also exploring additional yield generation opportunities through hyper EVM, DeFi protocols, though we remain in the early stages.

Speaker #4: 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 .

Speaker #4: Instead , given the growth we are anticipating across all our business lines , we are pleased to give guidance focused on our operations .

Speaker #4: We anticipate 25 adjusted Q4 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 .

Speaker #4: We are already off to a great start in Q4, with two new DeFi monetization partnerships already announced, plus 60% month-over-month growth in tokens delegated to our validator from September to October.

Speaker #4: 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 tokens in order to fund ongoing company operations .

Speaker #4: 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 .

Speaker #4: We are already engaging in five unique digital assets business strategies . Less than six months after establishing our digital assets , Treasury , and we expect all of them to achieve scale in 2026 .

Speaker #4: As a reminder , these are staking yields , validator commissions , yield enhancement , DeFi monetization , and ecosystem rewards . We believe our flywheel effect to compound our hype holdings , is simply unparalleled .

Speaker #4: With that , I'll turn it back over to Jason and we look forward to answering your questions .

Speaker #2: Thank you very much, David. As a reminder to those listening in, questions may be submitted via email to IR at Hyperion.

Speaker #2: Com here's our first question . How did the crypto liquidation event on October 10th impact your business ?

Speaker #3: Yeah , while October 10th 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 .

Speaker #3: So hyper liquids , the centralized exchange suffered zero downtime , downtime or outages , and the applications on hyper EVM , including lending and borrowing , worked perfectly without incurring any debt , which was not the case for other exchanges .

Speaker #3: More specific to Hyperion , DeFi , none of our business operations were affected . Given that we have not taken on any leveraged positions with our hype assets .

Speaker #3: As we mentioned focus before , our is on deploying natively staked hype to secondary yield generating mechanisms such as Hip three , and we also saw , more importantly , that even after this flush out of risk trading volumes and associated fees , quickly returned to hyper liquid , which demonstrates the market that there is demand for participants to continue to position their strategies on decentralized exchanges .

Speaker #2: Thank you. What do you think of recent regulatory developments and their impact on DeFi and your business?

Speaker #3: Yeah , great question . So we're 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 .

Speaker #3: 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 hyper liquid native stablecoins like USD .

Speaker #3: David would be great too . If you want to add your thoughts here .

Speaker #4: Absolutely , and thanks Hyunsu Jung . We place ourselves on the cutting edge of financial innovation and because of that , we believe that we have a duty and a obligation to operate responsibly .

Speaker #4: This means choosing to operate in ways where we believe we can navigate various regulatory outcomes, and we welcome any additional clarity with regard to digital cryptocurrency, assets, and DeFi regulation.

Speaker #2: Thank you, David. This investor asks, are you considering an additional capital raise?

Speaker #3: 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 house platforms and other additional initiatives to engage with and support hyper liquid .

Speaker #3: Now . 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 .

Speaker #3: And we've established that foundation, and the focus would be to continue to accumulate hype and refine what we built. I'll hand it off to David here, just with regard to capital markets activity.

Speaker #4: Sure . Thanks , Hyunsu Jung . 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 .

Speaker #4: 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 used our cash for other purposes.

Speaker #4: And we have continued raising funds via our ATM in the fourth quarter.

Speaker #2: Thank you . David . This one is on Astor and Leiter . They're asking , do you see it as a credible threat to hyper liquid ?

Speaker #3: So, there have been on-chain perpetual markets before, like GME, and they died. We expect that others may continue to come in the future.

Speaker #3: In our opinion, none of the hyper them are liquid. So holistically, it is true that when a new entrant like Astor or Leiter joins a market that is seeing a lot of attention, users may be interested in trying the shiny new thing.

Speaker #3: Competition is healthy because it encourages everyone to refine their and be product better , and it also helps the pie grow bigger in this case , on chain derivatives .

Speaker #3: beyond But this , hyper liquid 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 .

Speaker #3: It remains credibly neutral . It's even refunded user funds when network issues have emerged and more importantly , its rate of innovation is unmatched .

Speaker #3: It seems that those that are coming into the Perpetuals deck space now are playing a little bit of catch up , whereas with hyper liquids , you know , with products like hyp three , which enable the permissionless launch of non assets and also align , cloud assets , it creates new demand sinks for hype and expands the universe of participants to hyper liquid .

Speaker #3: And that's where we, as Hyperion, see the opportunity.

Speaker #2: Great . Thank you . Robert asked Is Manav a useful metric to you ?

Speaker #3: We believe Manav 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.

Speaker #3: Besides the value of the balance sheet versus its market cap , we see this kind of changing with new strategies from the called the second generation of digital asset treasuries , with strategies like staking , risk taking , derivatives them , however , .

Speaker #3: are None of able to do so Hyperion has done within the hyper liquid far , what ecosystem with real revenue generating businesses built on top of our treasury asset hype .

Speaker #3: 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 hyper liquid , and also onboarding and scaling financial activities .

Speaker #3: 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.

Speaker #2: Thank you, Great. Hansoo, this one is regarding how do we know what measures we take to secure our tokens?

Speaker #3: So, self-custody infrastructure using infrastructure provided by Anchorage Digital Bank. There are also ways to utilize the native multisig offered on Hyper Liquid to build secondary level protections.

Speaker #3: 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 .

Speaker #3: Assets on behalf of the company and our shareholders.

Speaker #2: How would we differentiate ourselves from other DApps ?

Speaker #3: The simple answer is that we do not just buy and hold our treasury assets. It seems that for the network, staking and contributing to security should just be baseline.

Speaker #3: Now Hyperion runs our own top ten validator with over 13 million hype staked to it , which does become real revenues for Hyperion .

Speaker #3: But more so than that , we are so many mechanisms to use that staked hype and redeploy it into the ecosystem these . And 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 hyper liquid .

Speaker #3: And as we mentioned before, with the Hyper Liquid 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.

Speaker #3: 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 .

Speaker #2: you . Thank This one is regarding the kinetic kinetic airdrop . Is that baked into our forecast ?

Speaker #3: Do you want to speak to this one?

Speaker #4: Absolutely . And thank you for the question . So here is what we know . We have kinetic points . We believe we will be eligible for the token generation event airdrop .

Speaker #4: 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.

Speaker #4: But there are two 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.

Speaker #4: Our joint validator agreement between us and kinetic and Pier two is a top ten validator on the hyper liquid blockchain with north of 13 million tokens as of the end of October , which 60% month over is month growth .

Speaker #4: In addition , the activities that we do with kinetic include our liquid staking , hi hype token , which provides real utility to us in terms of being able to stake our hype deploy into hyper EVM , and use an off chain situations like when we used high hype as collateral for our Q3 covered call option strategy , which netted some profits in Q3 .

Speaker #4: 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.

Speaker #4: Because we really do believe that this all adds up together. And the second point that we want to make here is that we don't know when or if there are going to be other opportunities like this, but we've only been doing this for less than six months, and there's already been two.

Speaker #4: The first was when the hyper liquid foundation delegated to our validator 3 million tokens in the third quarter , and the second . Now , with this kinetic rewards for us , this shows that our flywheel effect is really beginning to work .

Speaker #4: We're building these businesses on the hyper liquid blockchain , which both promote and monetize hyper liquid use . And now the ecosystem is rewarding us back .

Speaker #4: So this gives us even more conviction in our core thesis that hype is the most compelling digital asset that the hyper liquid blockchain is ripe for innovation and monetization , and we're very , very pleased to be simultaneously supporting and sharing in the this upside of growing ecosystem .

Speaker #2: Thank you, Jonathan. One of our legacy shareholders asked, "Why have we not sold the Optic Jet?"

Speaker #3: Thanks for the question. Yeah, with regard to the jet, we're taking a rational approach to that side of the business.

Speaker #3: 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.

Speaker #3: 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.

Speaker #4: Thanks, Hyunsu Jung. 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.

Speaker #4: And in the fourth quarter, we've continued to do some testing toward that milestone, but we will continue to have a rational approach and evaluate options available to us.

Speaker #2: Thank you . All right . I think we have time for one last question . They're asking , are you going to hire more people ?

Speaker #3: So Hyperion D5'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.

Speaker #3: 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 business key functions , and we want to remain very lean as we continue to move forward .

Speaker #3: Now , the beauty of blockchain based businesses is that similar to SaaS or other Web2 products is that once they are properly designed , they are almost infinitely scalable .

Speaker #3: A 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 primitives .

Speaker #3: 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 .

Speaker #3: And so very long winded way of saying it's definitely in the roadmap , but we want to focus on our core business first , which is ensuring that we develop a robust revenue generating business lines within the DeFi space built on hyper liquid .

Speaker #3: Thanks . Thanks again .

Speaker #2: 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 IR at Hyperion .

Speaker #2: DeFi . Com . 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 .

Speaker #3: All right . Thank you , Jason , as we conclude today's call , I want to emphasize the significance of what we accomplished and what lies ahead .

Speaker #3: Q3 2025 was our first full quarter operating as Hyperion DeFi, and we believe the results demonstrate the viability of our strategic transformation.

Speaker #3: We believe our performance shows that a public company can successfully participate in DeFi ecosystems while maintaining institutional-grade governance and creating shareholder value.

Speaker #3: 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 .

Speaker #3: 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 Hyper Liquid are becoming more recognizable.

Speaker #3: We believe Hyperion DeFi is positioned at the center of this transformation . Looking ahead , our priorities remain focused on three key areas continuing to build our strategic position , expanding our portfolio of DeFi services , and developing the institutional infrastructure necessary to bring traditional finance onto blockchain platforms .

Speaker #3: 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.

Speaker #1: 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 .