IP Strategy Holdings, Inc. Releases Preliminary Q4 and Full-Year 2025 Financial Results — Major \$IP Token Fair Value Loss Drives Significant Net Loss

IP Strategy Holdings, Inc. (“the Company”, Nasdaq: IPST) today announced its preliminary unaudited financial results for the fourth quarter and full-year ended December 31, 2025. These results include key revenue figures, details on the impact of the Company’s \$IP Token holdings, major balance sheet changes, and updates on corporate restructuring initiatives. Investors should note that these numbers are preliminary and subject to adjustment upon completion of the Company’s annual audit.

Key Highlights

• Q4 2025 Net Revenues: Expected to range from approximately \$4.6 million to \$4.8 million, a significant increase from \$3.0 million in Q3 2025.
• Full-Year 2025 Net Revenues: Estimated between \$9.8 million and \$10.3 million, up from \$8.4 million in 2024.
• Q4 2025 Net Loss Before Taxes: Massive loss of ~\$380 million to \$384 million, primarily due to the mark-to-market fair value loss on \$IP Token holdings, compared to a net income of \$245.7 million in Q3 2025.
• Full-Year 2025 Net Loss Before Taxes: Estimated at \$146.5 million to \$148.5 million (compared to 2024 net income before taxes of \$0.7 million), with approximately \$126.5 million to \$129.5 million of the loss attributable to changes in \$IP Token fair value.
• Significant \$IP Token Volatility: The Company acquired 53.2 million \$IP Tokens as part of an August 2025 equity offering at an average cost of \$3.93 per token. The market price dropped from \$8.54 on September 30, 2025 (valued at ~\$455.6 million) to \$1.732 on December 31, 2025 (valued at ~\$82.2 million), leading to a major swing in reported earnings and losses.
• Aggregate Cash and \$IP Tokens: As of December 31, 2025, the Company held approximately \$82 million in cash and \$IP Tokens.
• Validator Operations: Revenues from validator operations for 2025 expected to be between \$4.75 million and \$5.25 million at gross margins in excess of 95%.
• Debt Reduction: In August 2025, the Company eliminated \$19.3 million in senior secured debt and long-term obligations, including full repayment of all secured debt. This move is expected to save more than \$2 million in annualized interest expenses.
• Corporate Restructuring: The Company announced the shift to third-party spirits production and closure of retail tasting rooms in October 2025, with associated headcount reductions. This restructuring is anticipated to save more than \$5 million in annual operating expenses starting in 2026, with expected revenue loss from retail closures of about \$3.5 million.
• Audit Status: The preliminary results have not yet been audited by CBIZ, the Company’s independent registered public accounting firm.

Key Points for Shareholders and Potential Share Price Sensitivity

• Extreme \$IP Token Price Volatility: The Company’s earnings are highly sensitive to the market price of \$IP Tokens, as required by mark-to-market accounting. The sharp decline in \$IP Token value from September 30 to December 31, 2025, resulted in a swing from a massive Q3 profit to a massive Q4 loss. This introduces significant ongoing earnings volatility, with future GAAP results likely to be heavily influenced by crypto market swings, which may not reflect core business performance.
• Improved Core Operations Revenue and Margins: Despite the dramatic net loss from the token price drop, core operations (especially validator revenues) are growing with strong margins, and the Company generated higher quarterly and annual revenues compared to 2024.
• Deleveraging and Cost Savings: The elimination of all secured debt and the planned annual cost savings from restructuring could materially enhance future profitability and cash flows, particularly if \$IP Token values stabilize or recover.
• Restructuring Risks and Revenue Impact: The move to third-party spirits production and closure of retail operations will reduce future operating expenses but also reduce revenue from retail operations by approximately \$3.5 million per year.
• Audit and Forward-Looking Cautions: These are preliminary unaudited results. The final audited results may differ and investors should be alert to the risk disclosures especially regarding crypto asset volatility, regulatory concerns, and the Company’s dependency on the \$IP Token price for its reported results.

Outlook and Forward-Looking Statements

The Company notes that future results will continue to be exposed to significant swings in \$IP Token values, and that its financial statements may experience material volatility from quarter to quarter, depending on crypto market dynamics. The Company also expects to benefit from lower interest and operating expenses in 2026 due to debt repayment and restructuring.

Signature

This report was signed by Justin Stiefel, Chief Executive Officer, on behalf of IP Strategy Holdings, Inc.

Disclaimer: This article is a summary and interpretation of preliminary, unaudited results from IP Strategy Holdings, Inc. Actual audited results may differ from those reported herein. The article contains forward-looking statements subject to risks and uncertainties, including but not limited to, the volatility of digital asset markets and the Company’s operating performance. Investors are urged to consult the official filings and perform their own due diligence before making investment decisions.

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