Canton Strategic Holdings, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the three months ended June 30, 2026, was $1,495,859, compared to $0 in the same period in 2025.
• Revenue sources included $1,304,633 from "Other Revenue" (Locking-as-a-Service) and $191,226 from Network validation revenue.
• Net loss from continuing operations was $17,954,081, or $(0.08) per basic and diluted share, compared to a net loss of $1,432,587, or $(0.50) per share, in Q2 2025.
• Net loss from discontinued operations was $1,300,745, or $(0.01) per share, compared to $422,566, or $(0.15) per share, in Q2 2025.
• Total net loss for the quarter was $19,254,826.
• Adjusted EBITDA for the quarter was $(820,449), an improvement from $(1,126,984) in Q2 2025.
• Adjusted Operating Expenses were $2,628,156, compared to $1,122,991 in Q2 2025.
• Adjusted Operating Expenses Coverage Ratio was 56.9%, compared to 0.0% in Q2 2025.
• Unrealized loss on digital asset holdings was $23,735,950 for the quarter.
• Total assets were $564,570,386 as of June 30, 2026, compared to $519,146,435 as of December 31, 2025.
• Total stockholders' equity was $454,902,612 as of June 30, 2026, compared to $397,925,880 as of December 31, 2025.
• Cash and cash equivalents were $37,241,568 as of June 30, 2026, up from $12,007,148 as of December 31, 2025.
• Canton Coin holdings totaled 3,714,204,876 units with a fair value of $523,353,752, up from $501,760,369 as of December 31, 2025.
• Cost basis of Canton Coin holdings was $584,064,579 as of June 30, 2026, compared to $523,770,731 as of December 31, 2025.
• Net cash used in operating activities for the six months ended June 30, 2026, was $9,873,492.
• Net cash provided by financing activities for the six months ended June 30, 2026, was $91,245,141.

Guidance and Future Outlook

• Active Super Validator weight is expected to grow from 0.5 to the full 15 by the first quarter of 2028, contingent on meeting specific deliverables and receiving approval from the Canton Foundation's Accountability Committee.
• The remaining 14.5 weight under CIP-0102 is scheduled to unlock in tranches through the first quarter of 2028.
• Under CIP-0114, 50% of allocated weight becomes eligible for release following the first quarterly review, with one-fourth of the remaining 50% becoming eligible at each of the next four quarterly reviews.

Business Segments and Product Lines

• The Company recognized its first operating revenue from Locking-as-a-Service (LaaS), launched in April 2026, which generated approximately $1.3 million.
• LaaS allows the Company to lock Canton Coin on behalf of Super Validators and Featured Applications to meet network requirements while retaining legal and beneficial ownership; compensation includes interest rates, network reward shares, or equity grants.
• Validator and Super Validator operations generated $191,226 in revenue from CC rewards earned for providing validation and liveness services.
• The Company completed the sale of its legacy biotechnology subsidiary, Gravitas Life Sciences, Inc., on July 17, 2026, in exchange for a $3.5 million unsecured promissory note bearing 15% payment-in-kind interest plus contingent development milestone payments.
• Active minting for Super Validator operations began on May 9, 2026, with the Company holding a total approved SV weight of 15 (4 under CIP-0102, 11 under CIP-0114) and an active weight of 0.5 as of June 30, 2026.

Market and Competitive Landscape

• The Company is the first publicly traded entity to leverage Canton Coin to support the digitization of traditional financial markets.
• The Company's strategy focuses on capitalizing on commercial ventures aligned with the Canton Network's ability to transform financial markets.
• Canton Network rules (CIP-0105 and CIP-0116) require Super Validators and Featured Applications to maintain locked CC balances, creating the demand for the Company's LaaS offering.

Risks and Challenges

• Actual results may differ from forward-looking statements due to risks including the ability to execute growth strategy, raise and deploy capital, and achieve Super Validator weight unlock deliverables.
• Risks include the developing nature of the Canton Network, evolving legal and regulatory treatment of digital assets, and market performance of Canton Coin.
• The Company faces risks related to government regulation of cryptocurrencies and its limited history of generating revenue.

Management Commentary and Tone

• Mark Wendland, Chairman and CEO, stated the Company is pleased to see its disciplined strategy pay off with meaningful operating revenue recognized in the second quarter.
• Management described the diversified approach to value accretion as seeking opportunities to capitalize on commercial ventures aligning with long-term conviction in the Canton Network.
• Wendland noted that the growing operating business and Canton Coin treasury provide shareholders with differentiated exposure to network adoption rather than passive exposure to a single token.

Other Key Points

• The Board approved a $50 million share repurchase program on June 11, 2026; no shares were repurchased during the period.
• The Company secured approval for an expanded Super Validator weight of 15 under CIP-0102 and CIP-0114.
• The Company elected Sean Galvin, Pamela L. Carter, and Rishi Nangalia as directors at its 2026 annual meeting on July 13, 2026.
• For the six months ended June 30, 2026, stock-based compensation included $32,228,509 of expense related to Strategic Advisor warrants and Advisor RSUs issued in connection with the November 2025 PIPE transaction.
• The Company held no digital assets prior to November 2025.