Business Context and Reporting Period
Company: Forum Markets, Inc. (formerly ETHZilla Corporation)
Filing Type: Form 10-Q
Reporting Period: Three and six months ended June 30, 2026
Business Overview: The Company has transitioned from legacy biotechnology and gaming operations to a financial technology model focused on blockchain infrastructure, digital asset treasury management, and the tokenization of Real-World Assets (RWAs). Key activities include aircraft engine leasing, auto and manufactured home loan financing, and digital asset staking.
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
Dec 31, 2025 (Balance Sheet) |
|---|---|---|---|
| Total Revenue | $1,365 | $4,224 | - |
| Net Loss (Continuing Ops) | $(12,421) | $(89,955) | - |
| Net Loss (Total) | $(12,818) | $(89,082) | - |
| Cash and Cash Equivalents | $4,102 | - | $8,018 |
| Total Assets | $159,031 | - | $306,297 |
| Total Liabilities | $31,229 | - | $66,879 |
| Stockholders' Equity | $127,802 | - | $239,418 |
| Digital Assets (Fair Value) | $21,644 | - | $61,587 |
| Outstanding Debt | $25,950 | - | $57,714 |
Note: Revenue for the prior year periods (2025) was $0 due to the strategic shift away from legacy operations.
Material Changes vs. Prior Period
- Revenue Generation: The Company generated revenue for the first time under its new strategy, driven by aircraft engine rental revenue ($1.4M for Q2) and staking revenue ($1.8M for YTD). This contrasts with $0 revenue in the prior year periods.
- Asset Composition: Total assets decreased from $306.3M to $159.0M. This reduction is primarily due to the sale of approximately 57,726 ETH for $128.1M and the derecognition of liquid staking receivables ($181M) which were converted to digital assets or settled.
- Debt Reduction: Total liabilities decreased significantly from $66.9M to $31.2M. The Company fully repaid a $31.5M Aave loan during the period. A $26.0M collateralized loan with Equities First remains outstanding, secured by 12,441 ETH.
- Operating Expenses: General and administrative expenses increased to $10.3M (Q2) and $17.3M (YTD) compared to $1.4M and $3.3M in the prior year, driven by professional fees, stock-based compensation, and public company costs associated with the strategic transition.
- Share Repurchases: The Company repurchased 7.1 million shares for $31.3M during the six months ended June 30, 2026, under its stock repurchase program.
Guidance, Outlook, and Risks
Management Commentary & Outlook:
- Strategic Alternatives: A Special Committee of independent directors was established to evaluate strategic alternatives, including mergers, asset sales, or capital distributions, to maximize shareholder value.
- Tokenization: The Company is scaling its RWA tokenization strategy, including the issuance of "Eurus Aero Tokens" linked to aircraft engine cash flows.
- AI Infrastructure: The Company is exploring participation in short-term bridge loans for AI chip infrastructure financing, targeting mid-teens annualized returns.
- Stock Repurchase Program: The program was amended to extend through June 30, 2027, with the authorization reduced from $250M to $100M.
Risks and Contingencies:
- Digital Asset Volatility: Results are highly sensitive to ETH price fluctuations. The Company recognized $6.4M in unrealized digital asset losses for Q2 2026.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to a material weakness in the classification and technical accounting review of significant transactions. Remediation efforts are underway.
- Regulatory Environment: Evolving regulations regarding digital assets, staking, and tokenized securities pose compliance and operational risks.
- Zippy Make-Whole Obligation: A contingent liability of approximately $4.3M exists related to the Zippy investment, with payments triggered by stock price performance.
Investor Verification Checklist
- Internal Control Remediation: Verify the progress of remediation for the material weakness in internal controls over financial reporting.
- Debt Covenants: Review the terms of the $26.0M Equities First loan, specifically collateral requirements and liquidation risks given ETH price volatility.
- Strategic Alternatives: Monitor updates from the Special Committee regarding potential M&A, asset sales, or liquidation scenarios.
- Revenue Sustainability: Assess the longevity of aircraft engine lease contracts and the scalability of the RWA tokenization platform.
- Zippy Settlement: Track the three upcoming make-whole determination dates (July, September, December 2026) and potential cash outflows.