Note 10. Short-Term Treasury Debt, Cygnet Subsidiary Notes Payable, Promissory Notes, and Convertible Notes

Short-Term Treasury Debt

The following table summarizes the Company’s short-term treasury debt as of June 30, 2026 and 2025:

The Company entered into a credit facility with BitGo Prime, LLC (“BitGo”). Pursuant to a Master Loan Agreement, as of June 30, 2026, there was no remaining availability under the credit facility, which bears interest at a rate of 11.50% per year. The term of the credit facility is for one year and is renewable for successive one-year options. Each individual loan under the facility is negotiable as to the amount, term prepayment or recall (payment demand). The loans shall be collateralized by the Company’s treasury assets, already held at BitGo. The initial availability is based on a 260% collateral level and a margin call level of 175%. There are no requirements or fees for non-use of the credit facility and the facility can be increased in the future based on the value of the assets BitGo is the custodian of for the Company. At June 30, 2026 and 2025, the outstanding balance of the credit facility was $57,295,723 and $20,000,000, respectively. The credit facility was used for the purchase of SOL.

Cygnet Subsidiary Notes Payable and Promissory Notes

The following table summarizes the Company’s Cygnet subsidiary notes payable and acquisition payable as of June 30, 2026 and 2025:

As of June 30, 2026, the entire approximate $3.7 million outstanding balance of the SBA note payable is classified as current because scheduled payments are past due. The SBA note payable maturity date of October 6, 2031 presented above reflects the original contractual maturity date.

During March 2026, an arbitration ruling resulted in the extinguishment of certain debt obligations from the counterparty. In connection with the ruling, the Company extinguished (i) an inventory consignment note with an outstanding principal balance of approximately $1.0 million, (ii) a GF Note with an outstanding principal balance of approximately $0.7 million, and (iii) the elimination of approximately $0.2 million of accrued interest associated with these obligations. As a result, the Company recognized a gain on extinguishment of debt of approximately $1.9 million during the year ended June 30, 2026.

During February 2023, the Company executed a promissory note with an investor in the original principal amount of $560,000. During November 2023, the Company executed an amendment to the promissory note providing for interest only payments for 18 months at 12% per annum and thereafter the amortization of the note over a 12-month period, beginning in June 2025. The $560,000 principal balance was repaid in full during the year ended June 30, 2026.

Convertible Notes

The following table summarizes the Company’s convertible notes as of June 30, 2026 and 2025: 

The following table summarizes the outstanding principal balances and contractual settlement terms of the Company’s convertible notes as of June 30, 2026:

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* The convertible notes are not repayable in cash. If a holder does not elect conversion into shares of the Company’s common stock before maturity, the Company is required to settle the outstanding principal balance through delivery of the contractually specified quantity of SOL, reduced proportionately for any principal previously converted. The Company evaluated the SOL settlement provisions and the conversion features under ASC 815, Derivatives and Hedging. The Company concluded that the SOL settlement provisions do not require bifurcation because they do not meet the definition of a derivative, including the net-settlement criterion. The Company further concluded that the fixed-price conversion features qualify for the scope exception for contracts involving the Company’s own equity and, therefore, do not require separate derivative accounting. Accordingly, no embedded derivative assets or liabilities were recognized in connection with the convertible notes. The outstanding principal balances represent the historical U.S. dollar values assigned at issuance and do not represent the fair value of the associated SOL as of June 30, 2026 or the value of SOL that may ultimately be delivered at settlement.

On July 16, 2025, the Company entered into securities purchase agreements with certain investors, pursuant to which the Company agreed to sell and issue to the investors in a private placement offering secured convertible notes (the “Convertible Notes – July 2025 Issuance”) in exchange for locked and spot Solana in the aggregate, original principal amount of approximately $151.2 million, with a maturity date of July 16, 2027. The applicable interest rate is an annual rate equal to 2.00%. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, and accrues daily commencing on July 16, 2025, with interest paid quarterly. At the maturity date, the holders of the notes are entitled to an amount equal to the accrued and unpaid interest and liquidated damages (if any) and, to the extent unpaid principal remains, the return of the subscription amount (pro-rated to the extent principal was paid down) in the form of digital assets paid to the Company. At any time after the issue date until the notes are no longer outstanding, the notes shall be convertible into shares of common stock of the Company at the option of the holder, at any time and from time to time. The conversion price is $4.25 per share. Furthermore, the Company may deliver forced conversion notices. Under the terms of the forced conversion, if after the legend removal date, the volume-weighted average price for each of the 30 consecutive trading days exceeds $6.37, the Company may within five trading days deliver a notice to the holders to cause the holder to convert all or part of the outstanding principal on the notes.

On January 9, 2026, the Company entered into a securities purchase agreement with an investor, pursuant to which the Company issued to the investor a secured convertible note (the “Convertible Note – January 2026 Issuance”) in the original principal amount of approximately $36.0 million, in exchange for the transfer and contribution of 265,500 units of Solana in the form of locked Solana, with a maturity date of January 9, 2028. The note bears interest at a rate of 1.00% per annum, payable quarterly in cash. At maturity, or upon acceleration following an event of default, to the extent the note has not been converted in full, the investor is entitled to receive a pro rata return of the digital assets corresponding to the outstanding principal balance of the note at such time. The principal amount of the note is convertible, in whole or in part, at the option of the investor at any time, into shares of the Company’s common stock at a fixed conversion price of $2.39 per share, subject to customary adjustments, ownership limitations, and other conditions set forth in the agreement. Furthermore, the Company may deliver forced conversion notices. The note also provides for forced conversion under certain circumstances, subject to satisfaction of specified conditions, including trading price and liquidity thresholds, the effectiveness of a resale registration statement covering the shares issuable upon conversion, and the absence of events of default. Following the June 2026 partial extinguishment, the outstanding principal balance of the January 2026 Convertible Note was $16.4 million as of June 30, 2026.

The Company accounts for convertible notes as a single debt instrument measured at amortized cost. The Company has not identified any embedded features contained within its convertible notes that would require bifurcation from the debt host. As applicable, any debt discount and debt issuance costs incurred in connection with the issuance of the convertible notes are recorded as a direct deduction from the carrying amount of the convertible notes. These amounts are amortized to interest expense using the effective interest method over the expected term of the convertible notes. Upon conversion, the carrying amount of the convertible notes, including any unamortized debt issuance costs and unamortized discounts, are reduced by the amount converted, with any difference being reflected as a change in equity.

During July 2025, the Company issued 276,238 shares of common stock upon conversion of a portion of the Convertible Notes – July 2025 Issuance, resulting in a reduction of the outstanding principal balance of $1,173,046 and accrued interest of $964.

During June 2026, the Company issued 5,250,000 shares of common stock and 6,992,300 pre-funded common stock purchase warrants to purchase up to 6,992,300 shares of common stock for aggregate purchase price of $19,542,635. The aggregate purchase price was satisfied through the retirement and cancellation of $19,542,635 of the outstanding principal under the Company’s Convertible Note – January 2026 Issuance. In connection with the partial extinguishment of the convertible note, the Company recognized a gain on extinguishment of debt of approximately $8.4 million. The note otherwise remains in full force and effect in accordance with its terms, and the conversion price thereunder is unaffected by the transaction.