Stablecoin Development Corp 2026 Annual Report

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallerreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller Large accelerated filer☐Accelerated filer☐Emerging growth companyNon-accelerated filer☒Smaller reporting company☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes☐No☒ Stablecoin Development Corporation TABLE OF CONTENTS PART IFINANCIAL INFORMATION Item 1.Financial Statements Condensed Consolidated Balance Sheets: March 31, 2026 (unaudited) and December 31, 2025 Condensed Consolidated Statements of Operations: Three months ended March 31, 2026 and 2025(unaudited)Condensed Consolidated Statements of Stockholders’Equity (Deficit): Three months ended March 31, 2026 and2025(unaudited) PART IIOTHER INFORMATION Item 1.Legal ProceedingsItem 1A.Risk FactorsItem 2.Unregistered Sales of Equity Securities and Use of ProceedsItem 3.Defaults Upon Senior SecuritiesItem 4.Mine Safety DisclosuresItem 5.Other InformationItem 6.ExhibitsSIGNATURES On February 20, 2026, we effected a 1-for-5 reverse stock split of our common stock (the “Reverse Stock Split”). Except as otherwisespecifically noted, all share numbers, share prices, exercise/conversion prices and per share amounts in this report have been adjusted, PART IFINANCIAL INFORMATION Table of Contents NOTE 1.ORGANIZATION Stablecoin Development Corporation (“Stablecoin Development” or the “Company” or “our,” “we,” or “us”), formerly known asNovaBay Pharmaceuticals, Inc., is an on-chain holding company focused on long-duration participation in protocol-aligned digital assetecosystems and providing public market access to the stablecoin economy. The Company’s initial digital asset focus is the Sky Protocolecosystem, with SKY as its core holding. Through staking and other on-chain activities, the Company seeks to generate protocol-level On January 16, 2026, the Company completed a private placement of pre-funded warrants to purchase an aggregate of 167,539,227shares of common stock for aggregate gross proceeds of approximately $134.0 million, consisting of approximately $25.0 million incash and approximately $109.0 million in SKY tokens and stablecoins (the “January 2026 Private Placement”). The proceeds from theJanuary 2026 Private Placement, together with proceeds from any future capital raises, are intended to support a multi-year capitalallocation strategy focused on acquiring and holding a portfolio of select digital assets that exhibit revenue-generating characteristics, SKY, the governance token of the Sky Protocol, is currently the only digital asset deployed under the Company’s current strategy andrepresents the Company's primary digital asset holding. As of March 31, 2026, the Company held 2,153,141,678 SKY tokens,representing approximately 9% of the total supply of SKY at such date. The Company's SKY holdings are deployed in staking activities The Company intends to hold digital assets as part of a long-duration strategic position. The Company retains discretion to monetize aportion of its digital asset holdings if and when management determines it appropriate to do so. On April 2, 2026, the Company’s corporate name change from NovaBay Pharmaceuticals, Inc. to Stablecoin Development Corporationbecame legally effective. On April 6, 2026, the Company’s common stock commenced trading on the NYSE American under the newticker symbol “SDEV”. The name change and new ticker symbol reflect the Company’s strategic repositioning as an on-chain holdingcompany focused on protocol-aligned digital asset ecosystems and is reflected throughout this report. The Company is incorporated under the laws of the State of Delaware. The Company has one operating and reportable segmentencompassing its consolidated operations as of March 31, 2026. On February 20, 2026, we effected a 1-for-5 reverse stock split (the “Reverse Stock Split”). Except as otherwise specifically noted, allshare numbers, share prices, exercise/conversion prices and per share amounts in this quarterly report have been adjusted, on a Discontinued Operations Historical financial results related to each of the businesses and assets divested above are now presented as discontinued operations inthe Company’s Unaudited Condensed Consolidated Financial Statements (see Note 13, “Divestitures”). Liquidity Based on funds available as of March 31, 2026, management believes that the Company's existing cash and cash equivalents will besufficient to fund its planned operating expenses at least through one year from issuance of these finan