Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2025, for Twenty One Capital, Inc. (the "Company" or "Pubco"). The filing reflects the financial position of the Company as a successor entity and its predecessor, Twenty One Assets, LLC ("Twenty One Assets"), prior to a business combination consummated on December 8, 2025. The transaction involved a reverse recapitalization with Cantor Equity Partners, Inc. ("CEP"), resulting in Twenty One Assets and CEP becoming wholly-owned subsidiaries of the newly formed public parent, Twenty One Capital, Inc. The Company is focused exclusively on Bitcoin-related business lines, including Bitcoin accumulation and the development of educational content.
Key Financial Metrics
The financial data presented below reflects the stand-alone operations of the Successor (Pubco) and Predecessor (Twenty One Assets) as of September 30, 2025, prior to the December 2025 closing.
Twenty One Capital, Inc. (Successor)
| Metric | Three Months Ended Sept 30, 2025 | Period from Inception (March 7) to Sept 30, 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(57,798) | $(65,554) |
| Cash Balance | $0 | $0 |
| Total Liabilities | $65,554 | $65,554 |
| Working Capital | $(65,554) | $(65,554) |
Twenty One Assets, LLC (Predecessor)
| Metric | Three Months Ended Sept 30, 2025 | Period from Inception (April 17) to Sept 30, 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(656,070) | $(1,063,452) |
| Cash Balance | $808,230 | $808,230 |
| Total Liabilities | $687,282 | $687,282 |
| Working Capital | $136,548 | $136,548 |
Material Changes and Operational Highlights
- No Operating Revenue: Neither the Successor nor the Predecessor generated revenue during the reporting period. Operations were in a start-up phase focused on organizational setup and transaction preparation.
- Expense Drivers:
- Successor: Net loss consisted entirely of general and administrative expenses ($65,554 for the period from inception).
- Predecessor: Net loss consisted of general and administrative expenses ($980,152) and sales and marketing expenses ($83,300) for the period from inception.
- Liquidity Position: The Successor (Pubco) had zero cash and a working capital deficit. The Predecessor (Twenty One Assets) held $808,230 in cash, funded by $1.2 million in capital contributions, resulting in a positive working capital position of $136,548.
- Related Party Transactions: An affiliate advanced $15,600 to the Successor to cover operating costs, recorded as "Due to affiliate." The Predecessor had a corresponding receivable of $15,600 from an affiliate.
Guidance, Outlook, and Risks
Business Combination and Capital Raise
The Company completed a business combination on December 8, 2025. Key financial terms of the transaction include:
- Convertible Notes PIPE: Issuance of $486.5 million in 1.0% convertible senior notes due 2030.
- Equity PIPE: $200 million in April Equity PIPE and $165 million in June Equity PIPE (including in-kind Bitcoin contributions).
- Bitcoin Contributions: Tether and Bitfinex contributed an aggregate of 31,500 Bitcoin. Tether also purchased additional Bitcoin (PIPE Bitcoin) to be sold to Pubco at closing, totaling approximately 7,110 Bitcoin across Initial, Option, and June PIPE tranches.
- Net Proceeds: The Company received net cash proceeds of approximately $119.3 million in connection with the closing.
Strategic Outlook
Post-combination, the Company intends to:
- Actively accumulate and manage Bitcoin holdings as a strategic reserve.
- Develop and monetize educational materials and branded content to drive Bitcoin literacy.
- Pursue Bitcoin-centric financial services leveraging its holdings.
Risks and Contingencies
- Going Concern: Management has determined that the liquidity condition of the Successor (Pubco) raises substantial doubt about its ability to continue as a going concern for twelve months from the date of the financial statements, absent the capital raised in the business combination.
- Bitcoin Volatility: Future results will be heavily dependent on the price of Bitcoin. Under ASU 2023-08, Bitcoin is revalued at fair value each period, with changes recognized in net income, creating potential earnings volatility.
- Regulatory and Custodial Risk: The business faces risks related to the evolving global regulatory landscape for digital assets and reliance on third-party custodians (e.g., Anchorage) for asset security.
Investor Verification Checklist
- Transaction Closing: Verify the final closing date (December 8, 2025) and the actual amount of Bitcoin and cash received post-closing, as the 10-Q reflects pre-closing stand-alone figures.
- Capital Structure: Confirm the final share count and the specific terms of the $486.5 million convertible notes issued to PIPE investors.
- Bitcoin Holdings: Verify the total Bitcoin balance held by the combined entity immediately following the closing and the valuation methodology applied under ASU 2023-08.
- Going Concern Resolution: Confirm that the "substantial doubt" regarding the Successor's going concern status has been resolved by the proceeds from the business combination.
- Related Party Agreements: Review the Services Agreement with Tether ($30,000 per quarter) and the Governance Agreement regarding voting rights between Class A and Class B stock.