PALM BEACH, Fla., Dec. 16, 2025 /PRNewswire/ -- ETHZilla Corporation (NASDAQ:ETHZ), a technology company bringing decentralized finance infrastructure to traditional finance, today published a shareholder letter to highlight recent strategic execution and momentum around its go-forward value creation roadmap. The full text of the letter can be found below.

Dear Fellow Shareholders,

As we near the end of the calendar year, I want to take the opportunity to reflect on the progress we have made and share our vision for 2026 and beyond. When we launched ETHZilla just five months ago, we set out on a mission to reimagine how a public company could connect institutional capital with decentralized finance through Ethereum. Our plan was simple: accumulate Ether (ETH) and deploy it with discipline to generate yield, while we build an operating business to bring real-world assets (RWA) on-chain through tokenization. Our plan has been to lay the foundation for growth through disciplined capital deployment and strategic partnerships to power the business. Since that time, we have executed on several elements of the strategy and our focus on these goals has only intensified.

Creating the Foundation for RWA Tokenization

Over the past few months, we have established the core capabilities needed to successfully bring RWA on-chain through tokenization. In October, we announced a partnership with Liquidity.io, a regulated broker-dealer and one of only a handful of SEC-registered Digital Alternative Trading Systems (ATS), which included an equity stake in its parent company. This critical partnership provides ETHZilla with exclusive access to a fully regulated exchange where we intend to create Ethereum Layer 2 (L2) tokenized assets and turn them into tradable, compliant instruments with primary and secondary liquidity. This represents the necessary foundation upon which we plan to scale and grow our tokenization business and provided us confidence to move to the next phase of our growth plan: building strong pipelines of RWA to bring on chain.

The Right Strategic Partnerships

The total addressable market for tokenization of RWA is projected to be trillions of dollars, thus we have chosen to initially focus our efforts in specific areas:

Auto loans, with the opportunity to further expand into consumer credit
Manufactured home loans, with the future potential to participate in mortgages
Aerospace equipment, with the prospect to enter maritime and other heavy equipment markets
Land/commercial real estate, with the ability to expand into broader real estate

We believe strategic partnerships are attractive and necessary to rapidly scale our tokenization business. Recently, we announced strategic partnerships and equity stakes in Karus and Zippy, partners that expand our access to high-quality, scalable credit assets -- auto loans and manufactured housing loans – establishing a foothold in our first two focus areas. These two large markets are well suited for tokenization and have historically been dominated by a handful of large private and institutional investors. This creates an opportunity to tokenize assets that most investors cannot readily access today, opening up an entirely new investment category. Our strategic investments in Karus and Zippy were established through competitive processes and extensive rounds of due diligence, and we were the partner of choice due to our capabilities and infrastructure on Ethereum L2s as well as strong alignment on our joint vision of the market opportunity.

Karus and Zippy both provide ETHZilla with exclusive access to large, high-quality asset pools that we intend to aggregate, structure, and bring to market as tokenized income products on Ethereum L2 protocols. These partnerships are helping us create a tokenization pipeline, which gives us line of sight into revenue and cashflow generating opportunities in 2026:

Karus brings AI-driven credit modeling, a deep origination network of over 20,000 car dealerships, credit unions and banks, and a platform that has processed more than $5 billion in auto loans. By bringing auto loans on-chain, we're able to open these high-quality, income-generating assets to a global investor base for the first time, as historically, they have been limited to complex securitization structures from large institutional investment firms.
Zippy provides an institutional-grade lending and servicing platform for manufactured housing, a growing segment of the U.S. credit market, and has serviced over 5,000 loans. Manufactured home loans are a high-yield, high-quality asset class historically accessible only to a handful of private lenders, despite representing a ~$14 billion market[1]. Tokenization allows us to open this segment to a broader range of investors, making it a compelling fit for ETHZilla's on-chain securitization framework. We also believe that facilitating financing breadth for manufactured homes is an important step in adding housing supply amidst an ongoing national shortage.

In the heavy equipment market, we will initially focus on aerospace assets such as aircraft engines and airframes to tokenize. Members of our leadership team and board have deep relationships in the aerospace industry, which we are leveraging to build an initial pipeline of assets to tokenize without the need for additional partnerships. This represents a large, growing market with quality high-yielding assets, and we believe it is a very attractive space for tokenization.

The progress we have made in the early stages of building our tokenization pipeline and expanding the asset base we plan to bring on-chain demonstrates the momentum we believe we can generate. The multi-trillion-dollar U.S. commercial real estate market represents what we believe is yet another attractive sector for tokenization.

A Scalable Model for On-Chain Income

To make tokenized income products a core part of the financial landscape and accessible globally through regulated infrastructure, our tokenization model brings together four complementary economic engines for ETHZilla:

Yield: Yield generation on assets ETHZilla acquires and holds on our balance sheet until they are tokenized
Origination Fees: Creation of tokenized investment products on Liquidity.io from those assets, generating revenue and origination fees when they are sold, which can then be reinvested into acquiring additional assets to tokenize
Asset Management Fees: Recurring revenue generation from asset management fees as investors hold these tokens
Transaction Fees: Revenue from a portion of the bid/ask spread transaction fees as these tokens are eventually traded on the secondary market on Liquidity.io

As additional assets come online, we believe this pipeline will support meaningful revenue growth and scalable, recurring cash flow. The businesses we are entering exhibit minimal underlying cash flow volatility, supported by rigorous, AI-assisted underwriting standards, diversified exposures, and aligned partnership dynamics. Our progress to date and future goals demand that we retain access to capital to pursue and redeploy toward accretive opportunities.

Entering the Next Phase of Execution & Looking Ahead

On December 10, we announced our intention to redeem the outstanding $516 million of our 2028 convertible notes. This action streamlines our capital structure and enhances flexibility as we enter a new period of product launches, revenue generation, and operational scaling.

ETHZilla has secured our first assets for tokenization, and we intend to fund the transaction using existing on-balance-sheet cash. We expect to list our first RWA token on Liquidity.io in early 2026. As we expand into additional asset classes, we are evaluating options to fund the acquisition of new assets for tokenization, which may require a more dynamic allocation between Ethereum and US dollars on our balance sheet. We also believe strong market adoption and attractive growth opportunities may lead us to raise additional capital or pursue deal-specific financing in the future to support value creation.

We are confident we have the team, the strategy and the pipeline in place to execute against these plans in 2026 and beyond. Our board brings deep market connectivity to generate new business and partnership opportunities, along with disciplined oversight of our value creation strategy. Looking ahead, we intend to pursue board expansion and diversification initiatives to further strengthen our governance framework.

We believe tokenization is accelerating across global markets, with Ethereum emerging as the programmable infrastructure of choice to support this transition, albeit still in its early stages. As previously stated, our view is that the market is approaching an inflection point toward the tokenization of all assets, and ETHZilla is well positioned to be a first mover.

With a focused and capable leadership team, the right strategic partnerships, a purpose-built platform, and a growing pipeline of tokenization opportunities, ETHZilla is entering 2026 with substantial potential as our operational flywheel begins to turn. Companies that execute early and at scale are poised to define the future structure of on-chain finance, and ETHZilla has a compelling opportunity to play a leading role in shaping this emerging landscape. Thank you for your continued support, and we look forward to continuing to engage with our shareholders and other constituents in the new year.

McAndrew Rudisill

Chairman and Chief Executive Officer

ETHZilla Corporation

About ETHZilla

ETHZilla Corporation (NASDAQ:ETHZ) is a technology company in the decentralized finance (DeFi) industry. ETHZilla seeks to connect financial institutions, businesses and organizations worldwide by enabling secure, accessible blockchain transactions through Ethereum network protocol implementations. It generates recurring revenues through various DeFi protocols that improve Ethereum network integrity and security. ETHZilla believes it has the unique capability to bring traditional assets on-chain via tokenization. Through its proprietary protocol implementations, ETHZilla facilitates DeFi transactions and asset digitization across multiple Layer 2 Ethereum networks. ETHZilla is working to offer tokenization solutions, DeFi protocol integration, blockchain analytics, traditional-to-digital asset conversion gateways, and other decentralized finance services. To learn more, visit ETHZilla.com.

Forward Looking Statements

This press release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected benefits of the relationships with Karus and Zippy, expectations with respect to future performance, and growth of the Company; the ability of the Company to execute its plans, undertake tokenization activities and achieve future performance.

Forward looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, and actual results may differ materially. Applicable risks and uncertainties include, among others, failure to realize the anticipated benefits of the transaction described herein; failure to realize the anticipated benefits of the Company's previously disclosed stock repurchase program, previously announced private placements, sale of convertible notes, and related transactions, including the Company's digital asset treasury strategy; the Company's ability to achieve profitable operations; risks relating to the Company's stock repurchases, the fact that common stock share repurchases may not be conducted in the timeframe or in the manner the Company expects; expectations regarding the capitalization, resources and ownership structure of the Company; the Company's plans to continue to purchase ETH over time, the Company's digital asset treasury strategy, the digital assets held by the Company, the Company's current and anticipated yield strategies, including its participation in DeFi protocols and plans for tokenization of real world assets; fluctuations in the market price of ETH that will impact the Company's accounting and financial reporting; government regulation of cryptocurrencies; the Company's ability to repurchase shares of common stock, the timing thereof, purchase price thereof, and the fact that repurchases may not be undertaken under the stock repurchase program; changes in securities laws or regulations; changes in business, market, financial, political and regulatory conditions; risks relating to the Company's outstanding convertible notes, including the Company's ability to repay such notes, covenants associated therewith and dilution caused by the conversion thereof into common stock, and security interests associated therewith; risks relating to the Company's OTC transactions, including the Company's ability to repay such facilities, covenants associated therewith and security interests associated therewith, including security interests over certain of our cash and ETH; risks relating to the Company's previously announced ATM offering, including potential downward pressure on the Company's stock price associated therewith; risks relating to the Company's operations and business, including the highly volatile nature of the price of Ether and other cryptocurrencies; the risk that the Company's stock price may be highly correlated to the price of the digital assets that it holds; risks related to increased competition in the industries in which the Company does and will operate; risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally; risks relating to the treatment of crypto assets for U.S. and foreign tax purpose, expectations with respect to future performance, growth and anticipated acquisitions; potential litigation involving the Company; global economic conditions; geopolitical events and regulatory changes; access to additional financing, and the potential lack of such financing; and the Company's ability to raise funding in the future and the terms of such funding, including dilution caused thereby, as well as those risks and uncertainties identified and those identified under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, as well as the supplemental risk factors and other information the Company has or may file with the SEC. Readers are cautioned not to place undue reliance on these statements. Investors should also be aware that under U.S. generally accepted accounting principles (GAAP), certain crypto assets must be measured at fair value, with changes recognized in net income for each reporting period. These fair value adjustments may cause significant fluctuations in the Company's balance sheet and income statement from period-to-period. In addition, for certain crypto assets, including ETH, which the Company holds, impairment charges may be required to be reported in net income if the market price of such assets (including ETH) falls below the cost basis at which those assets are carried on the balance sheet. Readers are encouraged to read the Company's filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and the Company undertakes no obligation to update any forward-looking statements except as required by law. The Company's business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

[1] Source: Mordor Intelligence "United States Manufactured Homes Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)" report

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