Figure Certificate Co's Assets Soar Amidst YLDS Launch, Losses Widen

TL;DR

**Figure Certificate Co is burning cash to launch its blockchain-native YLDS, showing massive asset growth but widening losses, making it a high-risk, high-reward bet on digital finance.**

AI Summary

Figure Certificate Co (FCC) reported a significant increase in total assets to $22.612 million as of September 30, 2025, up from $1.015 million at December 31, 2024, primarily driven by a surge in cash and cash equivalents to $22.298 million from $500 thousand. The company launched its YLDS interest-bearing debt securities on a public blockchain on February 20, 2025, leading to $33.180 million in certificate issuances and $11.791 million in certificate surrenders by September 30, 2025. Despite generating $235 thousand in interest income for the nine months ended September 30, 2025, FCC incurred a net loss of $2.679 million, a substantial increase from the $381 thousand net loss in the same period of 2024. This loss was largely due to increased professional service fees of $1.611 million and offering cost expenses of $686 thousand. Related party transactions, including $21.034 million in certificates payable to related parties, highlight the company's reliance on its parent, Figure Technology Solutions, Inc. (FTS), for financial support, which has committed to covering operational expenses.

Why It Matters

Figure Certificate Co's rapid asset growth, fueled by its blockchain-native YLDS stablecoin, signals a bold move into digital asset-backed financial products, potentially disrupting traditional certificate markets. For investors, the substantial increase in certificates payable to related parties and the parent company's commitment to financial support indicate a high degree of internal reliance, which could be a double-edged sword: stability from a committed parent but also potential for conflicts of interest. Employees and customers might see innovation in the YLDS product, but the widening net loss raises questions about long-term profitability and operational efficiency in a competitive fintech landscape. The broader market will watch to see if this blockchain-based certificate model gains traction against established financial instruments.

Risk Assessment

Risk Level: high — The company reported a net loss of $2.679 million for the nine months ended September 30, 2025, significantly higher than the $381 thousand loss in the prior year, indicating increasing operational costs relative to revenue. Furthermore, the company's reliance on its parent, Figure Technology Solutions, Inc. (FTS), for financial support, including FTS paying invoices on behalf of FCC and forgiving intercompany payables, highlights a lack of independent financial sustainability, posing a significant going concern risk if parent support wavers.

Analyst Insight

Investors should approach Figure Certificate Co with extreme caution, recognizing it as a speculative investment in an early-stage, high-growth, but unprofitable blockchain-native financial product company. Monitor future filings closely for signs of improved profitability, reduced reliance on parent company funding, and sustained growth in third-party certificate issuances beyond the initial launch phase. Consider this a long-term, high-risk play on the future of digital assets, not a stable income investment.

Financial Highlights

debt To Equity

35.89

revenue

$235K

operating Margin

N/A

total Assets

$22.612M

total Debt

$21.580M

net Income

-$2.679M

eps

N/A

gross Margin

N/A

cash Position

$22.298M

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $22.612M — Total Assets (Increased from $1.015M at Dec 31, 2024, driven by cash and cash equivalents.)
• $22.298M — Cash and Cash Equivalents (Increased from $500K at Dec 31, 2024, reflecting significant inflows.)
• $2.679M — Net Loss (9 months) (Widened from $381K in the prior year, indicating increased expenses.)
• $21.034M — Certificates Payable to Related Parties (New liability as of Sep 30, 2025, showing significant internal funding.)
• $33.180M — Issuance of Certificates (Total issued from Feb 20, 2025, to Sep 30, 2025, including re-invested interest.)
• $11.791M — Surrender of Certificates (Total surrendered from Feb 20, 2025, to Sep 30, 2025.)
• $235K — Interest Income (9 months) (Generated from investment operations since Feb 20, 2025.)
• $1.611M — Professional Service Fees (9 months) (Major contributor to increased general and administrative expenses.)
• $686K — Offering Cost Expense (9 months) (Significant expense related to the public offering of Figure Certificates.)
• $2,556K — Operating Expenses Paid by Parent (9 months) (Non-cash contribution from FTS, highlighting financial reliance.)

Key Players & Entities

• Figure Certificate Company (company) — registrant
• Figure Technology Solutions, Inc. (company) — parent company providing financial support
• Michael Cagney (person) — controlling shareholder of FTS
• Figure Markets Holding, Inc. (company) — wholly-owned subsidiary of FTS and parent of FCC
• Figure Technologies, LLC (company) — former wholly-owned parent of FCC
• Figure Payments Corporation (company) — affiliate where FCC may hold cash
• UMB Bank n.a. (company) — bank for repurchase agreements
• Securities and Exchange Commission (regulator) — regulatory body

FAQ

Risk Factors

• Reliance on Parent for Operational Expenses [high — financial]: Figure Certificate Co (FCC) relies on its parent, Figure Technology Solutions, Inc. (FTS), for covering operational expenses. FTS has committed to covering these costs, as evidenced by $2,556K in operating expenses paid by the parent during the nine months ended September 30, 2025. This dependence creates a financial risk if FTS's support were to be withdrawn.
• New Product Launch and Operational Complexity [medium — operational]: FCC launched its YLDS interest-bearing debt securities on a public blockchain on February 20, 2025. This new operational model involves managing certificate issuances ($33.180M) and surrenders ($11.791M) on a blockchain, introducing potential operational risks and complexities associated with new technology and processes.
• Significant Net Loss Despite Asset Growth [high — financial]: Despite a substantial increase in total assets to $22.612 million, driven by cash inflows, FCC reported a net loss of $2.679 million for the nine months ended September 30, 2025. This is a significant increase from the $381 thousand net loss in the prior year, indicating that revenue generation is not yet covering operational costs.
• High Offering and Professional Service Costs [medium — financial]: The net loss was significantly impacted by increased professional service fees of $1.611 million and offering cost expenses of $686 thousand for the nine months ended September 30, 2025. These costs represent a substantial portion of the company's expenses and could continue to pressure profitability.
• Blockchain and Securities Regulation [medium — regulatory]: Operating a debt security product on a public blockchain introduces regulatory uncertainty. The evolving landscape of blockchain technology and its intersection with financial regulations could pose compliance challenges and potential future risks for FCC.
• Concentration of Liabilities with Related Parties [high — financial]: As of September 30, 2025, FCC has $21.034 million in certificates payable to related parties, representing a significant portion of its total liabilities ($21.999 million). This concentration highlights the intertwined financial relationship with its parent and potential risks associated with intercompany obligations.

Industry Context

Figure Certificate Co operates in the fintech sector, specifically focusing on tokenized debt instruments leveraging blockchain technology. This space is characterized by rapid innovation, evolving regulatory frameworks, and a competitive landscape with both established financial institutions exploring blockchain and numerous startups vying for market share. The industry trend is towards greater efficiency, transparency, and accessibility in financial markets through digital assets.

Regulatory Implications

FCC's use of public blockchain for debt securities places it at the intersection of securities law and emerging technology regulation. The company must navigate evolving compliance requirements related to digital assets, anti-money laundering (AML), and know-your-customer (KYC) regulations. Uncertainty in the regulatory landscape for blockchain-based financial products poses a significant compliance risk.

What Investors Should Do

1. Monitor the burn rate and path to profitability.
2. Evaluate the sustainability of parent company support.
3. Assess the regulatory landscape for blockchain-based securities.
4. Analyze the concentration of related party liabilities.

Key Dates

• 2025-02-20: Launch of YLDS interest-bearing debt securities on a public blockchain — Marks the beginning of FCC's core business operations and the start of certificate issuances and surrenders.
• 2025-09-30: Quarterly reporting date — Provides a snapshot of the company's financial position, including significant increases in assets and cash, and a substantial net loss.

Glossary

YLDS

Yield-bearing debt securities, likely referring to the specific product Figure Certificate Co is issuing. (This is the core financial product offered by FCC, whose issuance and surrender are central to the company's operations and financial statements.)

Certificates Payable

Represents the amount owed by FCC to holders of its issued certificates, essentially a form of debt or liability. (A significant liability for FCC, especially the 'Certificates payable to related parties' ($21.034M), indicating the scale of its financing activities and reliance on internal funding.)

Deferred Offering Costs

Costs incurred in connection with the issuance of securities that are deferred and amortized over the life of the offering or recognized upon completion. (These costs were significant ($515K at Dec 31, 2024) and are related to the launch of the YLDS product.)

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income. (FCC has an accumulated deficit of $3.284 million as of September 30, 2025, reflecting its current unprofitability.)

Qualified Assets

Assets that meet specific criteria, often related to regulatory requirements or collateral for financial instruments. (The substantial amount of cash ($22.298M) is classified as qualified assets, suggesting it may be tied to the YLDS product's collateralization or regulatory requirements.)

Year-Over-Year Comparison

Compared to the prior year's filing (presumably for the period ending December 31, 2024, or a similar prior period), Figure Certificate Co has experienced a dramatic transformation. Total assets have surged from $1.015 million to $22.612 million, primarily due to a massive increase in cash and cash equivalents from $500 thousand to $22.298 million. This influx is linked to the launch of its YLDS product. However, this growth has not translated to profitability; the net loss has widened significantly from $381 thousand to $2.679 million for the nine-month period, driven by substantial increases in professional service fees and offering costs. New liabilities, such as $21.034 million in certificates payable to related parties, have emerged, highlighting increased operational scale and financial interdependencies.

Key Financial Figures

• $0.0001 — ich registered Common stock, par value $0.0001 per share None None Indicate by che

Filing Documents

• fcc-20250930.htm (10-Q) — 787KB
• figr-20250930xex311.htm (EX-31.1) — 10KB
• figr-20250930xex312.htm (EX-31.2) — 10KB
• figr-20250930xex321.htm (EX-32.1) — 4KB
• figr-20250930xex322.htm (EX-32.2) — 4KB
• figr-20250930xex991commitm.htm (EX-99.1) — 5KB
• 0001974395-25-000010.txt ( ) — 3786KB
• fcc-20250930.xsd (EX-101.SCH) — 29KB
• fcc-20250930_cal.xml (EX-101.CAL) — 36KB
• fcc-20250930_def.xml (EX-101.DEF) — 82KB
• fcc-20250930_lab.xml (EX-101.LAB) — 377KB
• fcc-20250930_pre.xml (EX-101.PRE) — 253KB
• fcc-20250930_htm.xml (XML) — 381KB

- Financial Information

Part I - Financial Information 5 Item 1. Condensed Financial Statements 5 Condensed Balance Sheets - September 30, 2025 and December 31, 2024 5 Condensed Statements of Operations – Three and Nine Months Ended September 30, 2025 and 2024 6 Condensed Statements of Stockholder's Equity – Three and Nine Months Ended September 30, 2025 and 2024 7 Condensed Statements of Cash Flows – Three and N ine months Ended September 30, 2025 and 2024 8 Notes to Condensed Financial Statements 9 Note 1. Basis of Presentation 9 Note 2. Summary of Significant Accounting Policies 9 Note 3. Fair Value of Financial Instruments 11 Note 4. Certificates Payable 13 Note 5. Stockholder's Equity 13 Note 6. Related Party Transactions 13 Note 7. Segment Reporting 15 Note 8. Income Taxes 15 Note 9. Earnings Per Share 16 Note 10. Commitments and Contingencies 17 Note 11. Financial Highlights 18 Note 12. Subsequent Events 19 Item 2. Supplementary Schedules: 20 Schedule I—Investment in Securities of Unaffiliated Issuers 20 Schedule II—Investments in and Advances to Affiliates and Income Thereon 21 Schedule III—Mortgage loans on Real Estate and Interest Earned on Mortgages 22 Schedule IV—Real Estate Owned and Rental Income 23 Schedule V—Qualified Assets on Deposit 24 Schedule VI—Certificate Reserves 25 Schedule VII—Valuation and qualifying accounts 26 Schedule VIII—Supplementary Profit and Loss Information 27 Item 3.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 4.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 32 Item 5.

Controls and Procedures

Controls and Procedures 33

- Other Information

Part II - Other Information 33 Item 1.

Legal Proceedings

Legal Proceedings 33 Item 1A.

Risk Factors

Risk Factors 33 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34 Item 3. Defaults Upon Senior Securities 34 Item 4. Mine Safety Disclosures 34 Item 5. Other Information 34 Item 6. Exhibits 34

SIGNATURES

SIGNATURES 35 2 Table of contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q ("Form 10-Q"), as well as information included in oral statements or other written statements made or to be made by us, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management regarding future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "anticipate," "believe," "continue," "could," "design," "estimate," "expect," "intend," "may," "plan," "potentially," "predict," "project," "should," "will," "would," or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following: our expectations regarding our future revenue, expenses, and other operating results and key operating metrics; our ability to compete successfully in a highly competitive and evolving industry; our ability to attract new consumers and retain and grow our relationships with our existing consumers; our expectations regarding the development, innovation, introduction of, and demand for, our products; our ability to maintain, renew or replace our existing funding arrangements and build and grow new funding relationships; the impact of any of our funding sources becoming unwilling or unable to provide funding to us on terms acceptable to us, or at all; the future growth rate of our revenue and related key operating metrics; our ability to achieve sustained profit

CONDENSED FINANCIAL STATEMENTS

ITEM 1. CONDENSED FINANCIAL STATEMENTS FIGURE CERTIFICATE COMPANY CONDENSED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) September 30, 2025 December 31, 2024 Assets Cash and cash equivalents (includes qualified assets of $ 22,298 as of September 30, 2025 and $ 500 as of December 31, 2024) $ 22,298 $ 500 Deferred offering costs — 515 Prepaid expense 314 — Total assets $ 22,612 $ 1,015 Liabilities and Stockholder's equity Liabilities: Certificates payable to related parties $ 21,034 $ — Certificates payable to third parties 546 — Accounts payable 190 133 Accrued expenses 229 271 Accrued offering costs — 90 Total liabilities 21,999 494 Stockholder's equity: Common stock, $ 0.0001 par value per share, 1,000 shares authorized, issued and outstanding — — Additional paid-in-capital 3,897 1,126 Accumulated deficit ( 3,284 ) ( 605 ) Total stockholder's equity 613 521 Total liabilities and stockholder's equity $ 22,612 $ 1,015 The accompanying notes are an integral part of these interim condensed financial statements. 5 Table of contents FIGURE CERTIFICATE COMPANY CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Investment income Interest income $ 196 $ — $ 235 — Investment expenses Sales and marketing — — 4 — General and administrative expenses: Custodial fees 33 — 43 — Director fees 19 — 57 — Professional service fees 576 — 1,611 50 Offering cost expense — — 686 — Organizational costs — 170 254 331 General and administrative expenses–related parties: Investment advisory and management fees to affiliate 10 — 12 — Administration and transfer agent fees to affiliate 15 — 40 — Service fees to affiliate 5 — 6 — Interest expense 167 — 201 — Total investment expenses 825 170 2,914 381 Net investment loss $ ( 629 ) $ ( 170 ) $ ( 2,679 ) $ ( 381 ) Income tax p

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