v3.26.1
DERIVATIVES
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
OTC SOL Options

The Company enters into over-the-counter ("OTC") option contracts referencing the price of SOL in connection with managing the risk and return profile of its digital asset treasury. The primary underlying risk exposure of these contracts is SOL price risk. The contracts are not designated as hedging instruments under ASC 815-20. The Company writes put options to generate premium income on its treasury holdings, and enters into call option spreads to obtain participation in increases in the price of SOL. During the six months ended June 30, 2026, the Company (i) wrote SOL put options, receiving premium in exchange for the obligation to pay at maturity any excess of the strike price over the settlement price, and (ii) entered into SOL call option spreads, purchasing near-the-money calls and simultaneously writing further out-of-the-money calls of equal size and maturity for a net premium paid, obtaining participation in increases in the price of SOL up to the strike price of the written calls. All contracts were cash-settled, except one written put option that provided for physical settlement and expired unexercised, and all were collateralized by SOL (see Note 6) and U.S. dollars posted as initial and variation margin. U.S. dollars posted as margin collateral of $0.2 million as of June 30, 2026, are included in "Prepaid expenses and other current assets".

As of June 30, 2026, the Company’s outstanding SOL put option contracts referenced 288,805 SOL with strike prices ranging from $63.00 to $69.30 and maturities extending through July 10, 2026. See Note 8 for information regarding the fair value measurement of these contracts. On July 10, 2026, the SOL put options expired out-of-the-money.

The following table presents a roll-forward of OTC option contracts for the six months ended June 30, 2026:

Written put options — contractsWritten put options — SOLCall option spreads — contractsCall option spreads — SOL
Open as of December 31, 2025————
Entered during period12824,0896442,703
Settled or expired during period(8)(535,284)(6)(442,703)
Open as of June 30, 20264288,805——

Registered Direct Offering Put Options

In connection with the April 2026 Registered Direct Offering, the Company granted the Purchasers the right to require the Company to repurchase their shares upon certain qualifying events. The Put Options were issued as consideration in that offering rather than for risk management purposes, and their primary underlying risk exposure is the price of the Company's Class A common stock. The Put Options are freestanding derivative instruments classified as liabilities and are not designated as hedging instruments. See Note 9 for the terms of the Put Option Agreements and the related mezzanine equity classification.

The following table presents the derivative liability fair values by type as of June 30, 2026:

Derivatives not designated as hedging instrumentsBalance sheet locationJune 30, 2026December 31, 2025
Digital asset (SOL) price contracts — written put optionsAccrued and other current liabilities$299 $— 
Equity contracts — RDO put optionsDerivative liability4,207 — 
Total derivative liabilities$4,506 $— 

The Company does not offset derivative assets and derivative liabilities on the unaudited condensed consolidated balance sheets. Under the ISDA Agreements, amounts owed between the parties may be set off, and posted collateral may be applied against outstanding obligations, only upon an event of default or termination event with respect to the other party. Because these rights are conditional, the Company presents derivative assets and liabilities on a gross basis. The Put Options are not subject to a master netting arrangement.
The following table presents the gross and net amounts of the Company's OTC SOL option contracts, which are subject to enforceable master netting arrangements under the ISDA Agreements, as of June 30, 2026 (in thousands):

OTC SOL Options
Gross amount of recognized derivative liabilities$299 
Gross amounts offset in the balance sheet— 
Net amount presented in the balance sheet299 
Collateral pledged not offset in the balance sheet(299)
Net amount$— 

The following table presents the gains and losses for derivatives by type for the three and six months ended June 30, 2026 (in thousands):

Three Months Ended
June 30,		Six Months Ended
June 30,
Derivatives not designated as hedging instrumentsLocation2026202520262025
SOL price contracts — written put options(1)
Loss on digital asset derivatives$318 $— $318 $— 
SOL price contracts — call option spreadsLoss on digital asset derivatives(1,000)— (1,000)— 
Equity contracts — RDO put options(1)
Change in fair value of derivative liability(322)— (322)— 
Equity contracts — derivative warrant liabilitiesChange in fair value of derivative liability— (6,028)— (5,919)
Total$(1,004)$(6,028)$(1,004)$(5,919)
(1)Of the total gains and losses included in earnings, a gain of $56 thousand in "Loss on digital asset derivatives" and a loss of $322 thousand in "Change in fair value of derivative liability" are attributable to derivative instruments still held as of June 30, 2026.

Credit-Risk-Related Contingent Features

Certain of the Company's derivative instruments contain provisions that could accelerate settlement or increase collateral requirements upon a deterioration in financial condition. The Put Options may be exercised upon a failure of the Company's net debt to total capitalization ratio to remain at or below 30%. Under the ISDA Agreements governing the OTC SOL options, a single-day decline of 25% or more in the net equity of the Company's subsidiary that is party to those agreements, or a default on indebtedness of $100,000 or more, constitutes an additional termination event, upon which the minimum transfer amount for collateral demands is reduced to zero, the counterparty's obligation to return posted collateral is suspended, and the counterparty may liquidate posted collateral and terminate outstanding transactions.

As of June 30, 2026, the aggregate fair value of derivative liabilities containing such features was $4.5 million, consisting of $4.2 million of Put Options, against which no collateral was posted, and $0.3 million of OTC SOL options, against which the Company has posted collateral with a fair value of $2.6 million. Had these features been triggered as of June 30, 2026, the amount required to settle the Put Options would have been $8.1 million; posted collateral exceeded the net liability under the OTC SOL options, and no additional collateral would have been required.