Q3 2026 Upexi Inc Earnings Call

May 12, 2026

Operator: Good day, welcome to the Upexi, Inc. Fiscal Q3 2026 Financial Results Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Valter Pinto, Managing Director at KCSA Strategic Communications. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Operator. Good evening and welcome, everyone, to the Upexi fiscal third quarter 2026 financial results conference call. I'm joined today by Allan Marshall, Chief Executive Officer, Andrew Norstrud, Chief Financial Officer, and Brian Rudick, Chief Strategy Officer.

Valter Pinto: Thank you, operator. Good evening, and welcome everyone to the Upexi Fiscal Q3 2026 financial results conference call. I'm joined today by Allan Marshall, Chief Executive Officer, Andrew J. Norstrud, Chief Financial Officer, and Brian Rudick, Chief Strategy Officer. Before we begin, I'm going to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties, and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K, as well as the company's reports filed periodically with the SEC.

Speaker #2: Before we begin, I'm going to remind everyone that the statements made during today's conference call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Cybersecurity Litigation Reform Act of 1995.

Speaker #2: Actual results may differ materially due to a variety of risks, uncertainties, and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K, as well as the company's reports filed periodically with the SEC.

Valter Pinto: Actual results may differ materially due to a variety of risks, uncertainties, and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I'll refer you to the press release issued this evening and filed with the SEC on Form 8-K, as well as the company's reports filed periodically with the SEC.

Speaker #2: The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.

Valter Pinto: The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law. In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with the accounting principles generally accepted in the United States, and they may be different from non-GAAP financial measures used by other companies. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted. I'd now like to turn the call over to Upexi CEO, Allan Marshall.

Speaker #2: In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with the accounting principles generally accepted in the United States.

Speaker #2: And they may be different from non-GAAP financial measures used by other companies. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening unless otherwise noted.

Valter Pinto: The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings release issued this evening, unless otherwise noted. I'd now like to turn the call over to Upexi CEO, Allan Marshall.

Speaker #2: I'd now like to turn the call over to UPEXI CEO, Allan Marshall.

Speaker #3: Thank you, Valter, and welcome, everyone, to our fiscal third quarter 2026 earnings conference call. I'm happy to review our quarterly results and discuss why we're particularly optimistic about the future.

Allan Marshall: Thank you, Valter, and welcome everyone to our fiscal Q3 2026 Earnings Conference Call. I'm happy to review our quarterly results and discuss why we're particularly optimistic about the future. Our fiscal Q3 was characterized by a challenging environment, most notably a continued decline in both the price of Solana and industry multiples. Both had a direct impact on our stock and were the result of a general bear market in crypto. That said, SOL has rebounded from its intra-quarter low of approximately 77 to current 96, and our multiple is also well off the lows and are now sitting above NAV and our fully loaded measure. Brian will cover our thoughts on the downturn and why we believe prices and valuations can and will improve in the future.

Speaker #3: Our fiscal third quarter was characterized by a challenging environment, most notably a continued decline in both the price of Solana and industry multiples. Both had a direct impact on our stock and were the result of a general bear market in crypto.

Allan Marshall: Both had a direct impact on our stock and were the result of a general bear market in crypto. That said, SOL has rebounded from its intra-quarter low of approximately 77 to current 96, and our multiple is also well off the lows and are now sitting above NAV and our fully loaded measure. Brian will cover our thoughts on the downturn and why we believe prices and valuations can and will improve in the future.

Speaker #3: That said, Sol has rebounded from its intra-quarter low of approximately $77 to current $96 and our multiple is also well off the lows and now sitting above NAV and our fully loaded measure.

Speaker #3: Brian will cover our thoughts on the downturn and why we believe prices and valuations can and will improve. And while, like any treasury company, we are heavily impacted by token prices and valuation multiples, we are not simply waiting around for the environment to improve, but rather are taking a proactive approach, with several efforts afoot.

Allan Marshall: While we, like any treasury company, are heavily impacted by token prices and valuation multiples, we are not simply waiting around for the environment to improve, but rather are taking a proactive approach with several efforts afoot. One key initiative, which will always be a core component to the company, is intelligent capital issuance. Like peers, we generally traded at a discount to NAV during the quarter. We took advantage by buying back approximately 2.5 million common shares for roughly $2 million or $0.80 per share. As a reminder, buying shares below 1x NAV increases our Solana per share.

Speaker #3: One key initiative, which will always be a core component to the company, is intelligent capital issuance. Like peers, we generally trade it at a discounted NAV during the quarter.

Speaker #3: We took advantage by buying back approximately 2.5 million common shares for roughly $2 million, or $0.80 per share. As a reminder, buying shares below 1 times NAV increases our Solana per share.

Speaker #3: In addition to the buybacks, we remained active on the issuance front, issuing a $36 million in-kind convertible note in January, which materially reduced credit risk given the in-kind nature and will also increase our Solana per share should the notes convert, given a conversion price above NAV at the time of the issuance.

Allan Marshall: In addition to the buybacks, we remained active on the issuance front, issuing a $36 million in-kind convertible note in January, which materially reduced credit risk given the in-kind nature and will also increase our Solana per share should the notes convert, given a conversion price above NAV at the time of the issuance. Lastly, we completed an approximately $7 million equity plus warrants offering, which was done above NAV and also increased our Solana per share. Despite the difficult environment, we demonstrated an ability to utilize the capital markets to create value with both buybacks and issuances. Second key initiative during the quarter was an intense focus on expenses, including both treasury-related and for our brands business. On the treasury side, expenses have been elevated since the launch of our treasury due to initializing the strategy. Will now normalize going forward.

Speaker #3: Lastly, we completed an approximately $7 million equity plus warrant offering, which was done above NAV and also increased our Solana per share. Despite the difficult environment, we demonstrated an ability to utilize the capital markets to create value with both buybacks and issuances.

Allan Marshall: Despite the difficult environment, we demonstrated an ability to utilize the capital markets to create value with both buybacks and issuances. Second key initiative during the quarter was an intense focus on expenses, including both treasury-related and for our brands business. On the treasury side, expenses have been elevated since the launch of our treasury due to initializing the strategy. Will now normalize going forward.

Speaker #3: The second key initiative during the quarter was an intense focus on expenses. Including both treasury-related and for our brand's business. On the treasury side, expenses have been elevated since the launch of our treasury due to initializing the strategy, but will now normalize going forward.

Speaker #3: On our brand business, we moved from in-house operations, including manufacturing, warehouse, and logistics, to outsourced operation with third-party costs are now right-sized and are more closely tied to the revenue generated.

Allan Marshall: On our brand business, we moved from in-house operations, including manufacturing, warehouse, and logistics, to outsourced operation with third-party providers. Importantly, our costs are now right-sized and are more closely tied to the revenue generated. All in, assuming a continued 6% to 7% staking yield, we expect that by 1 July, the ongoing cash expenses for operations and interest will be less than the treasury staking revenue. Our goal is to have the lowest expense base of Solana treasury company tiers. The last key initiative during the quarter was yield generation, where we aimed to increase the native 7% Solana staking yield in a low risk and recurring manner. We continued to examine traditional sources of yield and are working towards a strategy that is successful with material increase the total yield earned on the treasury.

Speaker #3: All in, and assuming a continued 6 to 7 percent staking yield, we expect that by July 1st, the ongoing cash expenses for operations and interest will be less than the treasury staking revenue.

Speaker #3: And our goal is to have the lowest expense base of Solana treasury company peers. The last key initiative during the quarter was yield generation.

Allan Marshall: Our goal is to have the lowest expense base of Solana treasury company tiers. The last key initiative during the quarter was yield generation, where we aimed to increase the native 7% Solana staking yield in a low risk and recurring manner. We continued to examine traditional sources of yield and are working towards a strategy that is successful with material increase the total yield earned on the treasury.

Speaker #3: Where we aimed to increase the native 7% Solana staking yield in a low-risk and recurring manner. We continue to examine traditional sources of yield and are working towards a strategy that is successful with a material increase to total yield earned on the treasury.

Speaker #3: We believe the market would pay for the additional yield earned beyond the native staking yield. If the yield is low-risk and recurring, and if we are correct and successful, this would be accretive to our multiple.

Allan Marshall: We believe the market would pay for the additional yield earned beyond the native staking yield if the yield is low risk and recurring. If we are correct and successful, this would be accretive to our multiple, potentially giving us a sustained premium valuation that we can monetize and perhaps even perpetually enabling the digital asset treasury company capital markets flywheel. With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Speaker #3: Potentially giving us a sustained premium valuation that we can monetize, and perhaps even perpetually enabling the digital asset treasury company capital markets flywheel. With that, I'd like to turn the call over to our Chief Strategy Officer, Brian Rudick.

Speaker #2: Thanks, Allan. And hello, everyone. Solana fell from roughly $125 per token to about $83 per token during the quarter for a 33 percent decline.

Brian Rudick: Thanks, Allan, and hello, everyone. Solana fell from roughly 125 per token to about 83 per token during the quarter for a 33% decline. This compares to Bitcoin's 22% fall over the same period. We believe the main reason for the decline in the price of Solana during the quarter was the decline in the price of Bitcoin. Whether due to investors lumping all of crypto together, combined with Solana's much smaller market cap, or to programmatic funds trading digital assets together, Solana tends to trade with the beta to Bitcoin. Bitcoin fell materially due to a myriad of reasons, including OG token holder selling, 4-year cycle fears, fallout from the 10 October de-leveraging event, precious metals stealing the show, digital assets competing with alternative investment opportunities like AI and more, which pulled Solana lower.

Speaker #2: This compares to Bitcoin's 22 percent fall over the same period. We believe the main reason for the decline in the price of Solana during the quarter was the decline in the price of Bitcoin.

Speaker #2: Whether due to investors lumping all of crypto together combined with Solana's much smaller market cap, or to programmatic funds trading digital assets together, Solana tends to trade with a beta to Bitcoin.

Speaker #2: In Bitcoin fell materially. Due to a myriad of reasons, including OG token holder selling, four-year cycle fears, fallout from the October 10th de-leveraging event, precious metals stealing the show, digital assets competing with alternative investment opportunities like AI, and more, which fold Solana lower.

Brian Rudick: Bitcoin fell materially due to a myriad of reasons, including OG token holder selling, 4-year cycle fears, fallout from the 10 October de-leveraging event, precious metals stealing the show, digital assets competing with alternative investment opportunities like AI and more, which pulled Solana lower.

Speaker #2: While we believe the biggest determinant of the price of Solana will be the price of Bitcoin over the near term, we see this changing over the next few years.

Brian Rudick: While we believe the biggest determinant of the price of Solana will be the price of Bitcoin over the near term, we see this changing over the next few years. This is primarily because Bitcoin and Solana are two completely different constructs, with the former a store of value or digital gold, and the latter a new type of computer, and one that is upgrading our antiquated financial infrastructure. We believe that Solana will increasingly be viewed independently from Bitcoin as investor knowledge increases and judged based on its own underlying fundamentals. Here, Solana fundamentals remain strong. As a reminder, Solana's North Star is what it calls Internet Capital Markets, where it aims to have all the world's assets trading on a single liquidity venue, accessible 24/7, 365 by anyone with an internet connection.

Speaker #2: This is primarily because Bitcoin and Solana are two completely different constructs, with the former a store of value or digital gold and the latter a new type of computer and one that is upgrading our antiquated financial infrastructure.

Speaker #2: We believe that Solana will increasingly be viewed independently from Bitcoin as investor knowledge increases and judged based on its own underlying fundamentals. Here, Solana fundamentals remain strong.

Brian Rudick: Here, Solana fundamentals remain strong. As a reminder, Solana's North Star is what it calls Internet Capital Markets, where it aims to have all the world's assets trading on a single liquidity venue, accessible 24/7, 365 by anyone with an internet connection.

Speaker #2: As a reminder, Solana's North Star is what it calls internet capital markets, where it aims to have all the world's assets trading on a single liquidity venue accessible 24/7/365 by anyone with an internet connection.

Speaker #2: While Solana is simply a computer capable of running any application, we see particular opportunity in upgrading our antiquated financial infrastructure, much of which is old, slow, and expensive, with internet and blockchain-based rails for massive speed, cost, transparency, composability, and capital access benefits.

Brian Rudick: While Solana is simply a computer capable of running any application, we see particular opportunity in upgrading our antiquated financial infrastructure, much of which is old, slow, and expensive with internet and blockchain-based rails for massive speed, cost, transparency, composability, and capital access benefits. Specific areas in this financial infrastructure upgrade include stablecoins, which enable near free and near instant payments to anyone, anywhere in the world. Stablecoin transfer volume on Solana totaled $2.1 trillion in the quarter, up 60% over the prior year, and leading traditional companies like PayPal, The Western Union Company, and Société Générale are continuing to build and issue stablecoins on Solana due to its top performance and distribution. Another is tokenization, also known as Real-World Assets or RWAs, which move off-chain assets on-chain for massive benefits around asset management and administration, market efficiency and liquidity, and financial inclusion and economic growth.

Speaker #2: Specific areas in this financial infrastructure upgrade include stablecoins, which enable near-free and near-instant payments to anyone anywhere in the world. Stablecoin transfer volume on Solana totaled $2.1 trillion in the quarter, up 60 percent over the prior year, and leading traditional companies like PayPal, Western Union, and Societe Générale are continuing to build and issue stablecoins on Solana due to its top performance in distribution.

Brian Rudick: Stablecoin transfer volume on Solana totaled $2.1 trillion in the quarter, up 60% over the prior year, and leading traditional companies like PayPal, The Western Union Company, and Société Générale are continuing to build and issue stablecoins on Solana due to its top performance and distribution. Another is tokenization, also known as Real-World Assets or RWAs, which move off-chain assets on-chain for massive benefits around asset management and administration, market efficiency and liquidity, and financial inclusion and economic growth.

Speaker #2: Another is tokenization, also known as real-world assets or RWAs, which move off-chain assets on-chain for massive benefits around asset management and administration, market efficiency and liquidity, and financial inclusion and economic growth.

Speaker #2: Solana RWAs hit $2.4 billion in one quarter, up from just $317 million in the same quarter a year ago, including assets from leading issuers such as BlackRock and Franklin Templeton. This also includes tokenized equities, where Solana commanded a 99 percent market share of trading volume in the first quarter.

Brian Rudick: Solana RWAs hit $2.4 billion in Q1, up from just $317 million a quarter a year ago, including assets from leading issuers such as BlackRock and Franklin Templeton, and including tokenized equities where Solana commanded a 99% market share of trading volume in Q1. Finally, agentic payments, which are financial transactions executed autonomously by AI agents are another large opportunity, as many experts believe that one day the bulk of economic activity will be performed by agents. AI agents cannot simply open up a traditional bank account, but rather need a hyper-performant, credibly neutral, and permissionless network on which to transact. This puts Solana in the catbird seat to capitalize on this nascent but emerging trend, tying AI progress with Solana's future success. Finally, I will conclude by saying that recent price action, in my opinion, creates a compelling opportunity.

Speaker #2: Finally, agentic payments—which are financial transactions executed autonomously by AI agents—are another large opportunity, as many experts believe that one day the bulk of economic activity will be performed by agents.

Speaker #2: AI agents cannot simply open up a traditional bank account, but rather need a hyper-performant, credibly neutral, and permissionless network on which to transact. This puts Solana in the catbird seat to capitalize on this nascent but emerging trend, tying AI progress with Solana's future success.

Brian Rudick: AI agents cannot simply open up a traditional bank account, but rather need a hyper-performant, credibly neutral, and permissionless network on which to transact. This puts Solana in the catbird seat to capitalize on this nascent but emerging trend, tying AI progress with Solana's future success. Finally, I will conclude by saying that recent price action, in my opinion, creates a compelling opportunity.

Speaker #2: Finally, I will conclude by saying that recent price action, in my opinion, creates a compelling opportunity. Bitcoin pulled the price of Solana lower, while the fundamentals from stablecoins to tokenization, AI agents, and beyond are higher.

Brian Rudick: Bitcoin pulled the price of Solana lower, while the fundamentals from stablecoins to tokenization, AI agents and beyond are higher. Over time, prices follow fundamentals and a lower price against improving fundamentals creates an improved risk reward. Upexi and Solana are well-positioned to benefit. With that, I'll turn the call over to our Chief Financial Officer, Andrew Norstrud, for a review of our financial performance.

Speaker #2: Over time, prices follow fundamentals, and a lower price against improving fundamentals creates an improved risk-reward. Upexi and Solana are well positioned to benefit. And with that, I'll turn the call over to our Chief Financial Officer, Andrew Norstrud, for a review of our financial performance.

Speaker #3: Thank you, Brian. As of March 31st, the company had approximately $3.5 million in cash, $2.5 million in Solana tokens—$1.4 million of which is liquid, with the remaining one million tokens locked.

Andrew J. Norstrud: Thank you, Brian. As of 31 March, the company had approximately $3.5 million in cash, 2.5 million Solana tokens, 1.4 million liquid, and 1 million tokens locked.

Speaker #3: During the quarter ended March 31, 2026, Upexi generated approximately 35,000 tokens, or $3.5 million in revenue. We reduced overall short-term debt by approximately $7.6 million, which included reducing short-term treasury debt by $5.4 million.

Andrew J. Norstrud: During the Q1 ended 31 March 2026, staking generated approximately 35,000 tokens or $3.5 million in revenue. We reduced the overall short-term debt by approximately $7.6 million, which included reducing short-term treasury debt by $5.4 million. We reduced the recurring general administrative expenses compared to the Q2 ended 31 December 2025, and reduced the overall employee count to 10 employees. During the remainder of the year, management expects to eliminate and/or reduce additional ongoing general and administrative expenses and transition all consumer brands fulfillment to third-party providers. Based on the execution of these plans, the ongoing cash expenses will be less than the ongoing estimated staking revenue. For the 9 months ended 31 March 2026, the company had digital asset revenue of approximately $14.7 million or approximately 100,000 tokens.

Speaker #3: We reduced the recurring general administrative expenses compared to the second quarter ended December 31, 2025, and reduced the overall employee count to 10 employees.

Speaker #3: During the remainder of the year, management expects to eliminate and/or reduce additional ongoing general administrative expenses, and transition all consumer brands fulfillment to third-party providers.

Andrew J. Norstrud: During the remainder of the year, management expects to eliminate and/or reduce additional ongoing general and administrative expenses and transition all consumer brands fulfillment to third-party providers. Based on the execution of these plans, the ongoing cash expenses will be less than the ongoing estimated staking revenue. For the 9 months ended 31 March 2026, the company had digital asset revenue of approximately $14.7 million or approximately 100,000 tokens.

Speaker #3: Based on the execution of these plans, the ongoing cash expenses will be less than the ongoing estimated staking revenue. For the nine months ended March 31st, 2026, the company had digital asset revenue of approximately $14.7 million, or approximately $100,000 tokens, our tokens earned from staking has increased quarterly and we expect to trend to continue.

Andrew J. Norstrud: Our tokens earned from staking has increased quarterly, and we expect the trend to continue. The direct treasury expenses for the nine months ended 31 March 2026, were approximately $8.6 million, which includes management fees, custodian fees, service fees, and interest. For the nine months ended 31 March 2026, the treasury had an unrealized loss on digital assets of approximately $178.8 million, reflective of the Solana price per liquid token of $83.11, and $71.47 per locked token as of 31 March 2026. There were no comparable financial results for the prior period. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had substantially all tokens staked at 31 March 2026.

Speaker #3: The direct treasury expenses for the nine months ended March 31, 2026, were approximately $8.6 million, which includes management fees, custodian fees, service fees, and interest.

Speaker #3: For the nine months ended March 31st, 2026, the treasury had an unrealized loss on digital assets of approximately $178.8 million. Reflective of the Solana price per liquid token of $83.11, and $71.47 per 2026.

Speaker #3: There were no comparable financial results for the prior period. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had substantially all tokens staked at March 31st, 2026.

Andrew J. Norstrud: There were no comparable financial results for the prior period. The company continues to develop the digital asset treasury with a focus on maximizing the return for shareholders and had substantially all tokens staked at 31 March 2026.

Speaker #3: For the fiscal third quarter, total revenue was $4.6 million, compared to $3.2 million in the prior year quarter. For the nine months period ended March 31st, 2026, total revenue was approximately $21.8 million, compared to $11.5 million in the prior year period.

Andrew J. Norstrud: For the fiscal Q3, total revenue was $4.6 million, compared to $3.2 million in the prior year Q. For the 9 months period ended 31 March 2026, total revenue was approximately $21.8 million compared to $11.5 million in the prior year period. This increase reflects the addition of our digital asset treasury business in 2025. Net loss for the Q was approximately $109 million or $1.67 per share. $92.3 million related to the unrealized loss on digital assets during the Q. During the Q, we increased the total number of Solana tokens held by approximately 189,000, equating to a 9% increase or 35% annualized.

Speaker #3: This increase reflects the addition of our digital asset treasury business in 2025. Net loss for the quarter was approximately $109 million, or $1.67 per share.

Speaker #3: $92.3 million related to the unrealized loss on digital assets during the quarter. During the quarter, we increased the total number of Solana tokens held by approximately $189,000, equating to a 9 percent increase, or 35 percent annualized.

Speaker #3: Our focus is growing Solana holdings on a per-share basis through disciplined capital activities, taking yield and opportunistic purchases, while maintaining prudent leverage and risk management.

Andrew J. Norstrud: Our focus is growing Solana holdings on a per share basis through disciplined capital activities, staking yield, and opportunistic purchases while maintaining prudent leverage and risk management. Operationally, we will continue to align our expenses with that strategy. Now I turn the call back over to Allan for concluding remarks.

Speaker #3: Operationally, we will continue to align our expenses with that strategy. And now, I turn the call back over to Allan for concluding remarks.

Speaker #2: Thanks, Andrew. Upexi is operating from a position of strength. We have what we believe is the lowest average Solana purchase price of our larger peers.

Allan Marshall: Thanks, Andrew. Upexi is operating from a position of strength. We have what we believe is the lowest average Solana purchase price of our larger peers. We have perhaps the cleanest capital structure, and we have leading trading volumes and a leading valuation. These characteristics put us in an advantaged position to execute on value-creating actions from accretive equity and in-kind convertible notes issuances to accretive M&A and beyond. Lastly, I want to remind everyone of the four items that differentiate Upexi from peers. First, we have a differentiated management team, one who have been extremely successful in the past with a very deep capital markets expertise. Second, we have a strategy to maximize shareholder value in a risk-prudent manner, which we believe positions us well for any market environment and appeals to investors of all kinds.

Speaker #2: We have perhaps the cleanest capital structure, and we have leading trading volumes and a leading valuation. These characteristics put us in an advantaged position to execute on value-creating actions.

Speaker #2: From creative equity and in-kind convertible notes issuances, to creative M&A and beyond. Lastly, I want to remind everyone of the four items that differentiate Upexi from peers.

Allan Marshall: Lastly, I want to remind everyone of the four items that differentiate Upexi from peers. First, we have a differentiated management team, one who have been extremely successful in the past with a very deep capital markets expertise. Second, we have a strategy to maximize shareholder value in a risk-prudent manner, which we believe positions us well for any market environment and appeals to investors of all kinds.

Speaker #2: First, we have a differentiated management team—one who have been extremely successful in the past, with very deep capital markets expertise. Second, we have a strategy to maximize shareholder value in a risk-proving manner.

Speaker #2: Which we believe positions us well for any market environment and appeals to investors of all kinds. Third, we have and will continue to lead innovation and have done several firsts in the industry on the capital markets side.

Allan Marshall: Third, we have and will continue to lead innovation and have done several firsts in the industry on the capital markets side. Lastly, we have demonstrated an ability to create value for shareholders, executing on our value creation mechanisms to increase adjusted Solana per share by 35% last year and a full 32 percentage points more than investors would have gotten by simply staking Solana natively themselves. With that, I'll turn it over to the operator for questions.

Speaker #2: And lastly, we have demonstrated an ability to create value for shareholders, executing on our value-creation mechanisms to increase adjusted Solana per share by 35% last year, and a full 32 percentage points more than investors would have gotten by simply staking Solana natively themselves.

Speaker #2: With that, I'll turn it over to the operator for questions.

Speaker #1: Thank you, ladies and gentlemen. To ask a question, please press star, then one. And that is star one to ask a question. And we'll go first to Brian Kinslinger with Alliance Global Partners.

Operator: Thank you. Ladies and gentlemen, to ask a question, please press star then one. Again, that is star one to ask a question. We'll go first to Brian Kinstlinger with Alliance Global Partners.

Speaker #4: Great. Thanks so much. In the press release, you highlighted a 9 percent sequential increase in the Solana count, can you highlight the underlying yield for Solana that you're generating outside of what was acquired through the capital raise?

Brian Kinstlinger: Great. Thanks so much. In the press release, you highlighted a 9% sequential increase in the Solana count. Can you highlight the underlying yield for Solana that you're generating outside of what was acquired through the capital raise? What are the ways you're evaluating to improve that yield?

Speaker #4: And then, what are the ways you're evaluating to improve that yield?

Allan Marshall: Andrew, you wanna take that part?

Speaker #3: Andrew, you want to take that part?

Allan Marshall: Andrew, you wanna take that part?

Speaker #5: Yeah. So during the quarter, the staking yield, or the staking revenue, was a little bit less than 35,000 tokens that we got. We had the $265,000 convertible debt that we did, and we also sold off 100,000 tokens during the quarter.

Andrew J. Norstrud: Yeah. During the quarter, the staking yield or the staking revenue was a little bit less than 35,000 tokens that we got. We had the $265,000 convertible debt that we did, and we also sold off 100,000 tokens during the quarter. That we had a net of 187,000 increase of tokens.

Speaker #5: So we had a net increase of 187,000 tokens.

Speaker #3: Got it. Great, thank you. And then.

Brian Kinstlinger: Got it. Great. Thank you.

Andrew J. Norstrud: And right-

Brian Kinstlinger: Yep, go on.

Speaker #5: And right.

Speaker #3: Yep. Go on.

Brian Kinstlinger: Yep, go on.

Speaker #5: No, I was just going to say, and for the staking yield, overall, the total rewards have been down a little bit, but it's just below 7 percent for the native staking that we're doing.

Andrew J. Norstrud: No, I was just gonna say, and for the staking yield, overall the total rewards has been down a little bit, but it's just below 7% for the native staking that we're doing.

Speaker #4: Great. And then you mentioned in your prepared remarks accretive M&A; can you highlight how management is thinking about M&A and what types of assets might be intriguing or go hand in hand with your business?

Brian Kinstlinger: Great. You mentioned in your prepared remarks, accretive M&A. Can you highlight how management's thinking about M&A and what types of assets might be intriguing or go hand-in-hand with your business?

Speaker #3: Thanks, Brian. Right now, we're just exploring options on ways where we could increase the overall return on our capital. So the way we look at it is, for the staked tokens, it's 7 percent, and for the locked tokens, it's closer to double that or just less than double that.

Allan Marshall: Thanks, Brian. Right now we're just exploring options on ways where we could increase the overall return on our capital. You know, the way we look at it is for the staked tokens, it's 7%, and for the locked tokens, it's closer to, you know, double that or just less than double that. Anything we do would have to keep in mind that, you know, the barrier for us to do something would have to be beyond those yields. We've looked at multiple things, but obviously with just the overall market conditions right now, we're kind of waiting to see what options, you know, become available. This is just an expansion of the way we were thinking before.

Speaker #3: So, anything we do would have to keep in mind that the barrier for us to do something would have to be beyond those yields.

Speaker #3: We've looked at multiple things, but obviously, with just the overall market conditions right now, we're kind of waiting to see what options become available.

Allan Marshall: We've looked at multiple things, but obviously with just the overall market conditions right now, we're kind of waiting to see what options, you know, become available. This is just an expansion of the way we were thinking before.

Speaker #3: This is just an expansion of the way we're thinking before. So before, things were strictly buy as much Solana as we possibly can and stake it.

Allan Marshall: Before we were thinking strictly, you know, buy as much Solana as we possibly can and stake it. We are still thinking that, but we're also open to looking at opportunities that could increase that yield. Anything we did do, though, would not mean we sold any of our Solana. We would either use some sort of leverage debt or. To do that, it would have to surpass the income we would get from the Solana tokens.

Speaker #3: And we are still thinking that, but we're also open to looking at opportunities that could increase that yield. Anything we did do, though, would not mean we sold any of our Solana.

Speaker #3: We would either use some sort of leverage, debt, or—and to do that, it would have to surpass the income we would get from the Solana tokens.

Speaker #4: Great. I've got one follow-up. When I look at the balance sheet and the queue, the queue says, on the first page, you get $70 million plus shares.

Brian Kinstlinger: Great. I've got one follow-up. You know, when I look at the balance sheet and the Q says on the first page you get 70 million plus shares. You've got $238 million of debt. You know, I've got your enterprise value at $455 million, and your NAV is $227 million. Why is that not what the right way to think about it, that you've got an EV to NAV of 1.5x? You guys are talking about having a below 1x.

Speaker #4: You've got $238 million of debt. And so I've got your enterprise value at $455 million, and your NAV is $227 million. Why is that not the right way to think about it, that you've got an EV to NAV of 1.5 times?

Speaker #4: You guys are talking about having a below one time.

Speaker #3: Brian, do you want to take that, or should I, Andy? I'm not sure. Appropriate. I'm not sure about that statement.

Allan Marshall: Brian, do you wanna Brian or Andy? I'm not sure appropriate.

Brian Kinstlinger: Yeah.

Allan Marshall: I'm not sure on that statement.

Brian Kinstlinger: Dave.

Allan Marshall: Go ahead, Bob.

Speaker #6: Go ahead, Bob.

Speaker #3: Yeah. Appreciate the question. Yeah, we put out our investor deck, and in the appendix, we have two ways that we calculate it. It really depends on whether or not our in-kind convertible notes end up converting.

Andrew J. Norstrud: Yeah, appreciate the question. Yeah, we put out our investor deck in the appendix. We have two ways that we calculate it. It really depends on whether or not our in-kind convertible notes end up converting. If you run that embedded option through any sort of options pricing calculator, it suggests that they are still more likely than not to convert. If those do convert, then all that SOL is ours, and we will have to issue additional shares backing that. On our fully loaded M NAV, which is how we like to look at it, we assume that those converts convert, and we assume that we sell SOL to pay back our line outstanding, and that's what gets you to a roughly 1x M NAV.

Brian Rudick: Yeah, appreciate the question. Yeah, we put out our investor deck in the appendix. We have two ways that we calculate it. It really depends on whether or not our in-kind convertible notes end up converting. If you run that embedded option through any sort of options pricing calculator, it suggests that they are still more likely than not to convert. If those do convert, then all that SOL is ours, and we will have to issue additional shares backing that.

Speaker #3: If you run that embedded option through any sort of options pricing calculator, it suggests that they are still more likely than not to convert.

Speaker #3: But if those do convert, then all that SOL is ours. And we will have to issue additional shares backing that. And so on our fully loaded MNAV, which is how we like to look at it, we assume that those converts convert, and we assume that we sell SOL to pay back our line outstanding.

Brian Rudick: On our fully loaded M NAV, which is how we like to look at it, we assume that those converts convert, and we assume that we sell SOL to pay back our line outstanding, and that's what gets you to a roughly 1x M NAV.

Speaker #3: And that's what gets you to roughly one times MNAV. The other one, which I think you're referencing, is assuming there's no conversion— we have to give back some of that SOL, but we also don't have to issue those additional shares, and that's where we're way above NAV.

Brian Rudick: The other one, which I think you're referencing, is assuming there's no conversion, we have to give back some of that SOL, but we also don't have to issue those additional shares, and that's where we're way above NAV. My personal view is that there's probably a blend of the two, based on the probability of those in-kind converts converting. Again, we do think that those will convert, which is why we tend to manage the company based on our fully loaded M NAV.

Speaker #3: My personal view is that it's probably a blend of the two. Based on the probability of those in-kind converts converting, again, we do think that those will convert, which is why we tend to manage the company based on our fully loaded MNAV.

Speaker #4: Okay. Thanks so much, guys.

Brian Kinstlinger: Okay. Thanks so much, guys.

Speaker #1: We'll take our next question from Gareth Gassetta with Cantor Fitzgerald.

Operator: We'll take our next question from Gareth Gaceta with Cantor Fitzgerald.

Speaker #7: Hi, guys. Thank you. I was wondering if you could dive in on the cost structure and kind of the path to a self-sustaining treasury?

Gareth Gaceta: Hi, guys. Thank you. I was wondering if you could dive in on the cost structure and kind of the path to a self-sustaining treasury. Could you maybe talk about what existing cost actions need to be hit before you get to July first milestone? Maybe once you get there, from that base is the yield strategy, will that kind of provide some operating leverage on top of kind of where you think it will sit today?

Gareth Gacetta: Hi, guys. Thank you. I was wondering if you could dive in on the cost structure and kind of the path to a self-sustaining treasury. Could you maybe talk about what existing cost actions need to be hit before you get to July first milestone? Maybe once you get there, from that base is the yield strategy, will that kind of provide some operating leverage on top of kind of where you think it will sit today?

Speaker #7: Could you maybe talk about what existing cost actions need to be hit before you get to the July 1st milestone? And then maybe once you get there, from that base, is the yield strategy—will that kind of provide some operating leverage on top of where you think it will sit today?

Speaker #3: Sure. I can open it up, and then Andy can get into any details.

Allan Marshall: Sure. I can open it up and then Andy can get into the details.

Gareth Gaceta: Yes.

Gareth Gacetta: Yes.

Speaker #7: Yeah.

Allan Marshall: The way we're looking at it is we've reduced the headcount, we've outsourced all of the brand businesses, so they all run, you know, at a cost basis where we can manage it much more easily and competitively. I think the couple things we have to do, one is we need to refi a little bit of the debt we have or get some sort of like small appreciation in Solana's price. That would reduce expenses enough, like on the debt profile to bring us really close to cash flow neutral. Any increase, the way we're thinking about it, is any increase in the price of Solana, obviously that yield becomes very material for us.

Speaker #3: So the way we're looking at it is we've reduced the headcount. We've outsourced all of the brand businesses, so they all run at a cost basis where we can manage it much more easily and competitively.

Speaker #3: And then I think the couple of things we have to do, one, is we need to refinance a little bit of the debt we have or get some sort of small appreciation in Solana's price.

Speaker #3: That would reduce expenses enough on the debt profile to bring us really close to cash flow neutral. And then any increase, the way we're thinking about it, is any increase in the price of Solana.

Allan Marshall: That would reduce expenses enough, like on the debt profile to bring us really close to cash flow neutral. Any increase, the way we're thinking about it, is any increase in the price of Solana, obviously that yield becomes very material for us.

Speaker #3: Obviously, that yield becomes very material for us. But if you want, Andy can break down any more detailed information you want, or Brian can.

Allan Marshall: If you want Andy can break down any more detailed information you want or Brian can.

Speaker #4: Yeah, so just real quick, I mean, we have some expenses, like warehouse leases and everything else, that will be expiring. We’ll only be using them in this quarter.

Andrew J. Norstrud: Yeah. Just real quick, I mean, we have some expenses like warehouse leases and everything else that'll come, will be expiring. We'll no longer be using them in this quarter. That's kind of what the 1 July date states is so that these leases are gone, all the employees are gone, everything's finished with any of the logistics that we were doing before. Now it'll become everything will be measured on profitability through the inputs.

Speaker #4: So, that's kind of what the July 1st date states, is so that these leases are gone, all the employees are done, everything's finished with any of the logistics that we were doing before.

Speaker #4: Now it'll become everything will be measured on profitability through the inputs. The second area of it is Allan started to allude to is that right now, with that short-term treasury debt, we do have 500-plus thousand dollars per month of interest that we're going to be looking at a couple of different ways to reduce that significantly in the next three months, which will reduce the overall operating expenses in that treasury significantly.

Andrew J. Norstrud: The second area of it is, as Allan started to allude to, is that, you know, right now with that short-term treasury debt, we do have, you know, $500 and plus thousand dollars per month of interest that we're gonna be looking at a couple different ways to reduce that significantly in the next three months, which will reduce the overall operating expenses in that treasury significantly. That right now, even without that's where we can just about break even plus or minus a little bit based on the price of SOL. As we start taking care of those in the next two months, that'll get us well over that. Yes, there will be excess cash from those revenue staking as we're projecting right now, if everything goes as planned.

Speaker #4: That right now, even without that, that's where we can just about break even, plus or minus a little bit based on the price of sol.

Andrew J. Norstrud: That right now, even without that's where we can just about break even plus or minus a little bit based on the price of SOL. As we start taking care of those in the next two months, that'll get us well over that. Yes, there will be excess cash from those revenue staking as we're projecting right now, if everything goes as planned.

Speaker #4: But as we start taking care of those in the next two months, that'll get us well over that. And yes, there will be excess cash from those revenue stakings, as we're projecting it right now, if everything goes as planned.

Speaker #3: Gotcha. That's really helpful. And maybe—I know it's further down the line—but if you do end up generating some cash flows from this staking business, can you talk about maybe how you think about allocating that and returning it to shareholders?

Gareth Gaceta: Gotcha. That's really helpful. Maybe, I know it's further down the line, but if you do end up generating some cash flows from this staking business, can you talk about maybe how you think about allocating that and returning it to shareholders? Would you maybe buy more SOL or locked SOL or think about repurchases?

Gareth Gacetta: Gotcha. That's really helpful. Maybe, I know it's further down the line, but if you do end up generating some cash flows from this staking business, can you talk about maybe how you think about allocating that and returning it to shareholders? Would you maybe buy more SOL or locked SOL or think about repurchases?

Speaker #3: Would you maybe buy more SOL or lock SOL, or think about repurchases?

Speaker #7: We would look at all of them during the quarter. Or we repurchase shares because they're at 0.8 or even less of NAV. We had the excess cash.

Allan Marshall: We would look at all of them. Like, during the quarter, we, you know, we repurchased shares 'cause they're at, you know, 0.8 or even less of NAV. We had the excess cash. Yeah. I mean, any excess cash we have come in will go into building the treasury 'cause, you know, that's Sol per share, whether it be repurchasing shares or buying more Sol.

Speaker #7: So yeah, I mean, any excess cash we have come in will go into building the treasury position. That's SOL per share, whether it be repurchasing shares or buying more SOL.

Speaker #4: Okay, awesome. And then maybe last one, could you just kind of double-click on the high-yield strategy and what portion of the treasury is initially allocated to it?

Gareth Gaceta: Okay. Awesome. Maybe last one. Could you just kinda double-click on the high yield strategy and, like, what portion of the treasury is initially allocated to it and your appetite to maybe allocate more or a greater percentage of it towards that in the future?

Gareth Gacetta: Okay. Awesome. Maybe last one. Could you just kinda double-click on the high yield strategy and, like, what portion of the treasury is initially allocated to it and your appetite to maybe allocate more or a greater percentage of it towards that in the future?

Speaker #4: And your appetite to maybe allocate more or a greater percentage of it towards that in the future?

Speaker #3: Yeah. We've been looking at the certain strategies. Obviously, the yields on some of these strategies have been moving all over the place over the last 90 days.

Allan Marshall: Yeah. We've been looking at certain strategies. Obviously, the yields on some of these strategies have been moving all over the place over the last, you know, 90 days. I think we would do a small initial amount into that, like $25 million or $50 million, then work on that yield if we could get it high enough. Once we do refinance the debt, we'll have more availability to put more into a strategy like that should the yield, you know, generate the way we think it's going to. We're doing all of this off-chain. We're trying not to do anything on-chain. We're using more traditional, you know, Wall Street instruments.

Speaker #3: I think we would do a small initial amount into that, like $25 or $50 million, and then work on that yield if we could get it high enough.

Speaker #3: And once we do refinance the debt, we'll have more availability to put more into a strategy like that, should the yield generate the way we think it's going to.

Speaker #3: And we're doing all of this off-chain. So we're trying not to do anything on-chain. We're using more traditional Wall Street instruments.

Speaker #7: Totally. That's really helpful. Thank you, guys.

Gareth Gaceta: Totally. That's really helpful. Thank you, guys.

Gareth Gacetta: Totally. That's really helpful. Thank you, guys.

Speaker #1: And this does conclude our question and answer session. I would now like to turn the conference back over to Allan Marshall for closing remarks.

Operator: This does conclude our question and answer session. I would now like to turn the conference back over to Allan Marshall for closing remarks.

Allan Marshall: Just wanna thank everybody for joining the call today. We really appreciate the support. Thanks for the great questions. We'll look forward to updating everyone on the year-end. Have a great evening.

Speaker #3: I just want to thank everybody for joining the call today. We really appreciate the support. Thanks for the great questions, and we'll look forward to updating everyone on the year-end.

Speaker #3: Have a great evening.

Operator: And the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.