Streamex Corp.: Form 10-Q for the period ended Jun 30, 2026

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.

Business Overview

Streamex Corp. (“Streamex,” the “Company,” “we,” or “us”) is developing digital infrastructure for the tokenization and exchange of real-world assets (“RWAs”), initially focused on physical gold and gold-linked financial products. Following our acquisition of Streamex Exchange Corporation (“Streamex Exchange”) on May 28, 2025, we expanded beyond our historical focus as a medical-device technology company. We conduct our tokenized gold program through Streamex Ltd., a Cayman Islands special-purpose entity that we consolidate as a variable interest entity (“VIE”) because we are its primary beneficiary. Streamex Ltd. issues GLDY tokens, which represent non-voting participating equity interests designed to provide holders with economic exposure to physical gold bullion and gold-denominated leasing returns.

During the six months ended June 30, 2026, we launched the GLDY token program, acquired physical gold bullion to back the program, earned our first gold lease income, and subscribed for a $2,000 interest in Metalayer Digital Fund I (“Metalayer”) funded in USDC digital assets, and we held $6,001 of digital assets (principally USDC) at June 30, 2026. We also completed a January 2026 underwritten public offering and settled our secured convertible debentures in February 2026, eliminating all outstanding debt. We operate as a single operating and reportable segment.

Results of Operations

The following discussion should be read together with the Company’s unaudited condensed consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. All amounts in the discussion below are presented in thousands, except percentages, share amounts, and per-share data.

Comparison of the Three Months Ended June 30, 2026 and 2025

Gold Lease Income

Gold lease income was $146 for the three months ended June 30, 2026, compared with no income in the prior-year period, which preceded the commencement of our gold-leasing activities. We earn this income by deploying our own physical gold into a third-party leasing program in exchange for a stated in-kind return; the arrangement is outside the scope of ASC 606 and is recognized over the lease term on an effective-yield basis, with a $54 gold-denominated receivable recorded at June 30, 2026 for yield earned but not yet settled in gold. Substantially all of our gold lease income, and the entire related receivable, is with a single counterparty; a loss of, or adverse change in, that relationship would eliminate or materially reduce our only current source of income. The current-period amount is not indicative of future results, which will depend on the quantity of gold accepted into leases, prevailing lease yields, settlement timing, investor adoption of GLDY, and platform commercialization.

General and Administrative Expense

General and administrative expense decreased by $5,975, or 30.2%, to $13,836 for the three months ended June 30, 2026 from $19,811 for the prior-year period. The decrease was driven primarily by a $5,003 decrease in stock-based compensation (to $7,117 from $12,120, a 41.3% decrease) and a $3,573 decrease in consulting and platform-development costs, partially offset by increases in marketing and investor relations cost of $1,234, personnel and board-related costs of $704, insurance cost of $498, legal and regulatory cost of $295, and accounting and audit cost of $234, and by decreases in public-company readiness costs of $247 and corporate infrastructure costs of $226. The lower stock-based compensation reflects the timing and vesting of prior-year equity grants, and the higher marketing, personnel, insurance, and professional costs reflect the build-out of our public-company and tokenization functions following the Streamex Exchange acquisition.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $917, or 165.5%, to $1,471 for the three months ended June 30, 2026 from $554 for the prior-year period. The increase resulted primarily from a full quarter of amortization of the trade name, developed technology, legal and compliance framework, and other identifiable intangible assets recognized in the May 2025 Streamex Exchange acquisition. The prior-year period included only approximately one month of amortization following the acquisition date.

Other Income (Expense), Net

Total other income, net, was $105 for the three months ended June 30, 2026, compared with total other expense, net, of $3 for the prior-year period. The current-period amount consisted principally of $200 of other income, net (primarily foreign-currency and other individually immaterial items) and a $14 gain from changes in the fair value of marketable securities, partially offset by a $106 realized loss on marketable securities and $3 of net interest expense. Other income, net, is stated after a $172 unrealized loss on our investment in Metalayer, which we measure using the fund’s reported net asset value per share as a practical expedient for fair value.

Income Tax Benefit

We recognized an income tax benefit of $505 for the three months ended June 30, 2026, compared with none in the prior-year period. The benefit resulted primarily from the reversal of a portion of the deferred tax liability associated with amortization of the identifiable intangible assets recognized in the Streamex Exchange acquisition, which are held through our Canadian operations.

Net Loss and Loss Per Share

Net loss was $14,551 for the three months ended June 30, 2026, an improvement of $5,817, or 28.6%, from $20,368 for the prior-year period, driven primarily by lower operating expenses and the commencement of gold lease income. After net income attributable to noncontrolling interests of $1 and preferred stock dividends of $2, net loss attributable to common stockholders was $14,554 for the three months ended June 30, 2026, compared with $20,372 for the prior year period. Basic and diluted loss per share was $(0.08), compared with $(0.74), based on weighted-average common shares outstanding of 182,015,405 and 27,706,780, respectively. The increase in weighted-average shares reflects the January 2026 underwritten offering, the February 2026 conversion of debenture principal into common stock, and the inclusion of exchangeable shares in basic shares outstanding following our November 2025 stockholder approval.

Comparison of the Six Months Ended June 30, 2026 and 2025

Gross in-kind gold lease income

Gold lease income was $146 for the six months ended June 30, 2026, compared with no income in the prior-year period. The three-month and six-month amounts are the same because approximately $12 of gross in-kind gold lease income earned in the first quarter of 2026, comprising $11 of in-kind lease yield and $1 of contractual revenue share, but not recorded in our previously issued interim financial statements for that period, was recognized in the second quarter of 2026 as an out of period correction. Excluding that first-quarter catch-up, gold lease income earned in the second quarter of 2026 was approximately $134. Investors comparing sequential quarters should take this correction into account when assessing the trend in gold lease income. As with the quarterly period, substantially all of this income is concentrated in a single counterparty.

General and Administrative Expense

General and administrative expense increased $25,316, or 111.2%, to $48,089 for the six months ended June 30, 2026 from $22,773 for the prior-year period. The increase was driven principally by an $18,293 increase in stock-based compensation (to $32,487 from $14,194, a 128.9% increase), together with increases in marketing and investor relations ($3,491), personnel and board-related costs ($2,995), insurance ($1,114), and combined legal, regulatory, accounting and audit costs ($1,594), partially offset by a $2,117 decrease in consulting and platform-development costs and smaller decreases in public-company ($45) and corporate infrastructure ($134) costs. The increases reflect the expansion of our executive, finance, legal, technology, compliance, and corporate functions, and the marketing and commercialization activities supporting the GLDY program, following the Streamex Exchange acquisition.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $2,386, or 413.5%, to $2,963 for the six months ended June 30, 2026 from $577 for the prior-year period, reflecting a full six months of amortization of the acquired identifiable intangible assets, compared with approximately one month in the prior-year period following the May 28, 2025 acquisition date.

Other Income (Expense), Net

Total other expense, net, was $11,409 for the six months ended June 30, 2026, compared with total other income, net, of $181 for the prior-year period, an unfavorable change of $11,590. The change was driven principally by $12,198 of net interest expense — substantially all of which (approximately $203 of contractual interest and approximately $11,979 of non-cash amortization of debt discounts and issuance costs) related to the secured convertible debentures settled in February 2026 — and by a $3,057 loss on extinguishment of those debentures. These items were partially offset by a $2,938 realized gain on the February 2026 sale of previously pledged gold bullion, a $497 gain from the change in fair value of the debentures’ embedded derivative before its derecognition on settlement, and a $377 net realized gain on marketable securities (including the gain realized on the sale of our investment in Empress Royalty Corp.). Other income, net, of $153 is stated after the $172 unrealized loss on our Metalayer investment. Because the debentures were settled in the first quarter of 2026, the interest expense, extinguishment loss, and derivative fair-value changes that drove other expense for the six-month period are not expected to recur.

Net Loss and Loss Per Share

Net loss was $61,245 for the six months ended June 30, 2026, an increase of $38,076, or 164.3%, from $23,169 for the prior-year period, driven principally by higher stock-based compensation and the debenture-related interest expense and extinguishment loss recognized in the first quarter of 2026. After preferred stock dividends of $4, net loss attributable to common stockholders was $61,249, compared with $23,185. Basic and diluted loss per share was $(0.34), compared with $(0.95), based on weighted-average common shares outstanding of 177,787,337 and 24,286,234, respectively. Potentially dilutive securities were excluded from diluted loss per share because their effect would have been antidilutive.

Liquidity and Capital Resources

As of June 30, 2026, we had working capital of approximately $32,841 and cash of $5,605. For the six months ended June 30, 2026, we used $21,918 in operating activities, net cash provided by investing activities was $9,163 and net cash used in financing activities was $1,882.

During the six months ended June 30, 2026, the Company strengthened its liquidity position through financing transactions and asset monetization activities and eliminated its outstanding convertible debt. In January 2026, the Company completed an underwritten public offering generating net proceeds of $37,184. The Company also received $21,003 from the sale of marketable securities and $26,410 from the sale of gold bullion that had been classified as held for sale as of December 31, 2025, resulting in a realized gain on the sale of gold of $2,938. In February 2026, following the conversion of $15,000 of principal under the secured convertible debentures into 3,750,000 shares of common stock, the Company paid approximately $38,903 in cash to settle the remaining obligations, consisting of $35,000 of principal, a $3,500 prepayment premium, and approximately $403 of accrued interest. The Company recognized a loss on extinguishment of the convertible debentures of $3,057, and all related security interests and liens were released.

During the six months ended June 30, 2026, the Company received approximately $1,000 of USDC digital assets in connection with the transfer of an ownership interest in Streamex Ltd. to a noncontrolling interest holder.

As of June 30, 2026, the Company’s principal sources of liquidity, in addition to cash on hand, included marketable securities of $12,861, digital assets of $6,001, and its investment in Metalayer, with a carrying amount of $1,828, which is measured using net asset value per share as a practical expedient for fair value and, following expiration of a three-month lock-up on August 26, 2026, is redeemable only as of the last business day of each calendar quarter upon 15 calendar days’ prior written notice, such that the earliest available redemption date is September 30, 2026

During the second quarter of 2026, the Company engaged an advisor to assist in evaluating monetization, licensing, sale, or other strategic alternatives for its PURE EP™ patent portfolio. As of June 30, 2026, the Company had not received any definitive offer, letter of intent, indication of interest, or term sheet and had not committed to any transaction. Accordingly, the Company cannot predict the amount, timing, or likelihood of any potential proceeds, and its liquidity forecasts do not assume any proceeds from the patent portfolio.

Off-Balance Sheet Arrangements

As of June 30, 2026, the Company did not have any material off-balance-sheet arrangements as defined by applicable SEC rules.

Cash Flows

Operating Activities

Net cash used in operating activities was $21,918 for the six months ended June 30, 2026, an increase of $19,525 from $2,393 for the prior-year period, reflecting the expanded scale of operations following the Streamex Exchange acquisition and the launch of the GLDY program. The six-month net loss of $61,245 included significant non-cash items — $32,487 of stock-based compensation, $11,979 of amortization of debt discounts and issuance costs, $3,057 of loss on debenture extinguishment, $2,963 of depreciation and amortization, and a $172 unrealized loss on the Metalayer investment — together with cash outflows for personnel, professional services, platform development, marketing, insurance, and regulatory compliance.

Investing Activities

Net cash provided by investing activities was $9,163 for the six months ended June 30, 2026, compared with $366 for the prior-year period. The current-period inflow was driven by $26,410 of proceeds from the February 2026 sale of previously pledged gold bullion and $21,003 of proceeds from sales of marketable securities, partially offset by $23,900 of purchases of marketable securities and $14,375 of purchases of gold held at cost.

Financing Activities

Net cash used in financing activities was $1,882 for the six months ended June 30, 2026, compared with net cash provided by financing activities of $4,700 for the prior-year period. Current-period activity reflected $37,184 of net proceeds from the January 2026 underwritten public offering and $350 of proceeds from the issuance of equity interests in Streamex Ltd. to noncontrolling interest holders, more than offset by $38,500 paid to settle the secured convertible debentures. In January 2026, we issued 13,416,667 shares of common stock (including the underwriters’ over-allotment) at $3.00 per share for net proceeds of $37,184. In February 2026, the debenture holder converted $15,000 of principal into 3,750,000 shares of common stock, and we paid approximately $38,903 in cash to settle the remaining obligations ($35,000 of principal, a $3,500 prepayment premium, and approximately $403 of accrued interest), recognizing a $3,057 loss on extinguishment. Upon settlement in February all related security interests and liens were released.

Operating Losses and Liquidity Outlook

We expect to continue incurring operating losses and negative cash flows until our digital infrastructure platform, including Streamex Exchange’s tokenization and GLDY offerings, achieves sustained commercial scale. During the six months ended June 30, 2026, the Company recognized its first gross in-kind gold lease income from the tokenized gold platform; however, income recognized to date remains immaterial. We expect to incur additional costs related to platform development, regulatory compliance, personnel, professional services, marketing, strategic partnerships, and public-company reporting as the Company seeks to expand its income-generating activities. The timing and extent of future income growth will depend on, among other things, continued investor adoption of GLDY, growth in assets under management, completion of development milestones, regulatory considerations, market conditions, and the successful commercialization of the Streamex Exchange platform and related offerings.

Based on management’s liquidity forecast and available financial resources, management concluded that substantial doubt about the Company’s ability to continue as a going concern was not raised as of the issuance date of the unaudited condensed consolidated financial statements. See Note 2 — Liquidity for additional information regarding the Company’s liquidity position, going-concern evaluation and related assumptions.

Capital Strategy and Uses of Cash

Our capital strategy is focused on maintaining sufficient liquidity to support ongoing operations, platform development, commercialization, regulatory compliance, personnel and infrastructure investments, public-company reporting, and strategic initiatives while preserving balance-sheet flexibility. We may evaluate additional capital sources from time to time, including:

• Public or private equity offerings
• Equity-linked financing arrangements;
• Strategic partnerships or licensing arrangements
• Government grants or non-dilutive funding
• Debt financing, where feasible
• Monetization of financial or other assets.

While the Company has implemented cost-saving measures in prior periods, it has increased spending in certain areas to support the development and commercialization of the Streamex Exchange platform and related initiatives. These investments are intended to support long-term growth but may increase near-term liquidity requirements.

Future financing may include the issuance of equity or debt securities, credit facilities, strategic arrangements, or other forms of financing. Any equity or equity-linked financing could result in dilution to existing stockholders. Debt financing could impose restrictive covenants, require collateral, or result in securities or claims senior to those of the Company’s common stock. Market volatility, regulatory developments, the Company’s operating performance, and macroeconomic conditions may adversely affect the Company’s ability to obtain financing on acceptable terms. There can be no assurance that additional financing will be available when required, on acceptable terms, or at all. If additional capital is required and is not obtained on acceptable terms, the Company may be required to delay or reduce platform-development, commercialization, marketing, infrastructure, or other strategic activities, or enter into strategic arrangements that could require the Company to relinquish rights to certain technologies, products, or commercial opportunities.

The Company’s future capital requirements will depend on a number of factors, including:

• the timing and amount of operating expenditures;
• the pace of development and commercialization of the Streamex Exchange platform and related tokenization infrastructure;
• investor adoption of GLDY and other tokenized products;
• the scale and timing of the Company’s gold-leasing and other income-generating activities;
• regulatory and compliance requirements applicable to the Company’s platform, digital assets, tokenized products, and public-company operations;

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• personnel and infrastructure investments required to support platform scalability, compliance, custody, cybersecurity, and operations;
• costs associated with public-company reporting, corporate governance, accounting, audit, legal, and regulatory compliance;
• costs associated with the development, maintenance, and protection of the Company’s intellectual property;
• the availability, timing, and cost of financing and strategic partnerships;
• general economic and financial-market conditions; and
• conditions in the commodities and digital-asset markets.

The Company’s liquidity forecast includes assumptions regarding the timing and availability of its financial resources, the pace of platform-development and commercialization activities, planned operating and capital expenditures, cost-containment measures, and the timing and amount of potential income. Actual results may differ materially from those assumptions.

Critical Accounting Estimates

The preparation of our unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosures. A critical accounting estimate is one that requires assumptions about matters that were highly uncertain at the time the estimate was made and for which different estimates reasonably could have been used, or changes reasonably likely to occur from period to period, would have a material impact on our financial condition or results of operations.

There have been no material changes to the critical accounting estimates disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025, other than the estimates described below, which relate to transactions and activities that commenced during 2026.

Stock-Based Compensation — Awards with Market Conditions. During 2026, we granted performance stock units containing a market condition. We estimate the grant-date fair value of these awards using a Monte Carlo simulation, which requires significant assumptions, including expected volatility, risk-free interest rates, and the derived service period. These assumptions are inherently uncertain, and the use of different assumptions could result in materially different compensation expense. Expense for market-condition awards is recognized over the derived service period and is not reversed if the market condition is not achieved.

Consolidation of Variable Interest Entities. We consolidate variable interest entities for which we are the primary beneficiary. Determining whether we are the primary beneficiary of Streamex Ltd. requires significant judgment regarding which activities most significantly affect the entity’s economic performance, our power to direct those activities, and our exposure to benefits and losses that could be significant. Changes in these judgments could materially affect whether the entity is consolidated and the amounts recognized in our financial statements.

Gold Lease Income and Gold-Denominated Consideration. We recognize gold lease income, a portion of which is settled in physical gold. Measuring this income requires estimates regarding the fair value of gold-denominated consideration, the timing of recognition over the lease period, and the assessment of collectability. Differences between the estimated value of gold-denominated consideration recognized as income and the value realized upon settlement are recognized as settlement gains or losses and could be material in future periods as leasing activity scales.

We review our estimates and assumptions on an ongoing basis and recognize revisions in the period in which the estimates are revised and in any future periods affected. Our significant accounting policies are described in Note 3, Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2026. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below and previously reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Material Weaknesses in Internal Control Over Financial Reporting

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified the following material weaknesses in the Company’s internal control over financial reporting as of December 31, 2025:

(i) inadequate identification, recording, and reporting of stock-based compensation;

(ii) ineffective review processes over period-end financial disclosure and reporting, including review of information produced by the entity (“IPE”);

(iii) inadequate segregation of duties for transaction posting and processing; and

(iv) ineffective review controls over business combinations and related financial instruments.

The material weaknesses did not result in any identified misstatements to the unaudited condensed consolidated financial statements and there were no changes to previously released financial results. These material weaknesses had not been remediated as of June 30, 2026, and accordingly, management concluded that our disclosure controls and procedures were not effective as of June 30, 2026.

Remediation Plan

Management has initiated and continues to execute remediation plans to address the material weaknesses described above. During the three months ended June 30, 2026, management undertook the following remediation actions:

• Hired a corporate controller with public-company technical accounting and financial reporting experience to strengthen the Company’s accounting function, enhance the design and operation of controls over financial reporting, and support the timely preparation and review of the Company’s consolidated financial statements
• Continued to enhance the Company’s formal review procedures over the recording and reporting of complex and non-routine transactions, including business combinations, consolidation of variable interest entities, equity and share-based compensation, and digital-asset arrangements;
• Engaged third-party technical accounting and financial-reporting advisors to assist management in the analysis, documentation, and review of complex accounting matters; and
• Continued to formalize and document key accounting policies, processes, and control activities, including segregation of duties and review controls over the financial statement close process.

Management believes these actions, once fully implemented and operating effectively for a sufficient period of time, will remediate the underlying control deficiencies. The material weaknesses will not be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. There can be no assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.

Changes in Internal Control Over Financial Reporting

Except for the remediation actions described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except for the following risk factors, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on March 31, 2026. The following risk factors supplement, and should be read in conjunction with, the risk factors disclosed in such Annual Report.

Our reliance on USDC as the primary settlement medium for GLDY transactions exposes us to risks related to stablecoin depegging, Circle Internet Financial, LLC's ("Circle") financial stability, and the broader banking relationships underlying USDC reserves.

Substantially all secondary-market transactions in GLDY — including instant-settlement purchases facilitated through our liquidity arrangements with an independent proprietary trading firm — are denominated and settled in USDC. USDC is not insured by the Federal Deposit Insurance Corporation (the "FDIC"), and Circle's ability to maintain the 1:1 peg of USDC to the U.S. dollar depends on the sufficiency and liquidity of its reserves, which are held primarily in U.S. Treasury securities and cash deposits at regulated financial institutions.

In March 2023, USDC temporarily lost its dollar peg after Circle disclosed that approximately $3.3 billion of its reserves were held at Silicon Valley Bank, which had entered FDIC receivership. Although the peg was subsequently restored, this event demonstrated the vulnerability of stablecoins to contagion from the traditional banking system. A similar or more prolonged depegging event could materially impair the ability of GLDY holders to redeem their tokens at fair value, reduce confidence in GLDY's secondary market pricing, and require us to seek alternative settlement mechanisms on short notice.

Furthermore, the GENIUS Act, signed into law in July 2025, imposes new regulatory requirements on stablecoin issuers and their reserve management practices. To the extent that future regulatory actions restrict Circle's operations, reduce USDC liquidity, or impose additional compliance burdens that affect our use of USDC, our ability to provide efficient settlement for GLDY could be materially and adversely affected.

A significant portion of our liquid resources has been deployed to a single trading counterparty to support GLDY secondary-market liquidity, and we could lose all or part of those assets.

On July 1, 2026, we transferred $5.0 million of USDC and 1,069 GLDY tokens to an independent proprietary trading firm under an interest-free loan agreement, representing a substantial majority of our digital asset holdings as of June 30, 2026. The loan is unsecured, and the loaned assets are not held in a segregated or custodial account for our benefit. Under the agreement, if the loaned assets are lost or become inaccessible as a result of the insolvency or failure of a trading venue or other third party, and the loss did not result from the counterparty's gross negligence, willful default or fraud, the amount owed to us is reduced accordingly and we bear the loss. Either party may terminate the arrangement on 30 days' notice, following which the loan balance is required to be returned within two business days, but we cannot assure you that the loaned assets will be returned in full or on a timely basis, or that we could replace this liquidity support on comparable terms. The loss of all or part of these assets, or the loss of instant-settlement capacity for GLDY, could materially and adversely affect our liquidity, financial condition, operating results, and the market price of our common stock.