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INVESTMENTS | 6 Months Ended
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Jun. 30, 2026
INVESTMENTS |
INVESTMENTS | NOTE 6 – INVESTMENTS During the six months ended June 30, 2026, the Company executed the following investments in private entities, as part of the Company’s strategy to enhance balance sheet productivity by lending to its ecosystem and strategic partners on a risk adjusted basis and allocating capital to high-conviction growth themes across the digital asset, financial technology and artificial intelligence sectors. In March 2026, the Company entered into a Simple Agreement for Future Equity ("SAFE") with Nof1 Holdings, Inc. ("Nof1"), an agentic artificial intelligence research and trading technology company, for total cash consideration of $3.0 million. The SAFE provides the Company with the right to convert the investment to equity interests upon the occurrence of specified triggering events, including an equity financing, liquidity event, or dissolution event. The investment contains two embedded derivative features requiring bifurcation, but no value was attributed to them as of June 30, 2026, due to the remoteness of the contingent events. During the same period, the Company also invested $3.0 million through a contractual alternative investment vehicle to acquire a beneficial interest in the preferred shares of Recursive Superintelligence, a private artificial intelligence research company focused on developing self-improving AI systems. Legal title is held by a nominee entity on bare trust for the Company's benefit. The Company capitalized $30 thousand of directly related transaction costs. The Company does not have the ability to exercise significant influence over either investee, and neither of the two investments have a readily determinable fair value. Accordingly, each investment is carried at cost. As of June 30, 2026, the Company had not recorded any impairment related to these investments. Investments as of June 30, 2026 and December 31, 2025, are as follows (In thousands):
|  | As of June 30, 2026 |  |  | As of December 31, 2025 |
Debt security investments measured at fair value |  |  |  |  |  |
Short-term Non-banking Loans |  |  | 2,196 |  |  |  | 3,414 |
Commercial Business Loans |  |  | — |  |  |  | 10,244 |
Equity investments in publicly traded companies |  |  | 825 |  |  |  | 956 |
Equity investments in privately held companies |  |  | 6,030 |  |  |  | — |
Total Investments |  | $ | 9,051 |  |  | $ | 14,614 |
Fair value measurement The following table presents the fair value measurements of our investments by major class, as of June 30, 2026, according to the fair value hierarchy (In thousands):
|  | As of June 30, 2026 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Short-term non-banking loans |  | $ | — |  |  | $ | — |  |  | $ | 2,196 |  |  | $ | 2,196 |
Commercial business loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Equity investments in publicly traded companies |  |  | 825 |  |  |  | — |  |  |  | — |  |  |  | 825 |
Total |  | $ | 825 |  |  | $ | — |  |  | $ | 2,196 |  |  | $ | 3,021 |
The following table presents the fair value measurements of our investments by major class, as of December 31, 2025, according to the fair value hierarchy (In thousands):
|  | As of December 31, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Short-term non-banking loans |  | $ | — |  |  | $ | — |  |  | $ | 3,414 |  |  | $ | 3,414 |
Commercial business loans |  |  | — |  |  |  | — |  |  |  | 10,244 |  |  |  | 10,244 |
Equity investments publicly traded companies |  |  | 956 |  |  |  | — |  |  |  | — |  |  |  | 956 |
Total |  | $ | 956 |  |  | $ | — |  |  | $ | 13,658 |  |  | $ | 14,614 |
The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 investment assets for the three months ended June 30, 2026 (In thousands):
|  | Balance |
Balance as of January 1, 2026 |  | $ | 13,658 |
Net change in unrealized depreciation |  |  | (10,562 | )
Purchases and other adjustments to cost |  |  | — |
Sales and redemptions |  |  | (900 | )
Balance as of June 30, 2026 |  | $ | 2,196 |
The following table lists our Level 3 investments held as of June 30, 2026 and the unobservable inputs used to determine their valuation:
Security Type |  | 6/30/26 FMV |  |  | Valuation Technique |  | Unobservable Inputs |  | Range |
Short-term non-banking loans |  | $ | 2,196 |  |  | discounted cash flow |  | determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness, including assessment related to individual note creditworthiness |  | 24-73% |
Commercial business loans |  |  | — |  |  | discounted cash flow |  | forecasted cash flows available to creditors in a foreclosure sale |  | 18-24% |
Total |  | $ | 2,196 |  |  |  |  |  |  |  |
The following table presents a reconciliation of the beginning and ending fair value balances for our Level 3 investment assets for the year ended December 31, 2025:
In thousands |  | Balance |
Balance as of January 1, 2025 |  | $ | 13,006 |
Net change in unrealized depreciation |  |  | (2,748 | )
Purchases and other adjustments to cost |  |  | 7,900 |
Sales and redemptions |  |  | (4,500 | )
Balance as of December 31, 2025 |  | $ | 13,658 |
The following table lists our Level 3 investments held as of December 31, 2025 and the unobservable inputs used to determine their valuation:
Security Type |  | 12/31/25 FMV |  |  | Valuation Technique |  | Unobservable Inputs |  | Range |
Short-term non-banking loans |  | $ | 3,414 |  |  | discounted cash flow |  | determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness, including assessment related to individual note creditworthiness |  | 18-24% |
Commercial business loans |  |  | 10,244 |  |  | discounted cash flow |  | determining private company interest rate based on changes in market rates of instruments with comparable creditworthiness |  | 18-24% |
Total |  | $ | 13,658 |  |  |  |  |  |  |  |
There were no transfers between Level 1, Level 2, or Level 3 of the fair value hierarchy during the reporting period.

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