Q2 2026 TON Strategy Co Earnings Call

August 11, 2026

Speaker #1: Good morning, and welcome to Tom's Strategy Company second quarter 2026 earnings conference call. Joining us today are Chief Executive Officer Kevin Wilson and Chief Financial Officer and Chief Operating Officer Sarah Olson.

Operator: Good morning, and welcome to TON Strategy Company's Q2 2026 earnings conference call. Joining us today are Chief Executive Officer, Kevin Wilson, and Chief Financial Officer and Chief Operating Officer, Sara Wilson. Earlier today, the company filed its quarterly report on Form 10-Q for the quarter ended 30 June 2026, and issued a press release with its financial results. Both are available in the Investors section of the company's website. An accompanying presentation was posted to the Investors section of the company's website before today's call and will be referenced during management's prepared remarks. The press release, quarterly report, presentation, and webcast replay of today's call will be available on the company's website. Following management's prepared remarks, the company will address selected questions submitted in advance by shareholders.

Operator: Good morning, and welcome to TON Strategy Company's Q2 2026 Earnings Conference Call. Joining us today are Chief Executive Officer, Kevin Wilson, and Chief Financial Officer and Chief Operating Officer, Sara Wilson. Earlier today, the company filed its quarterly report on Form 10-Q for the quarter ended 30 June 2026, and issued a press release with its financial results. Both are available in the Investors section of the company's website. An accompanying presentation was posted to the Investors section of the company's website before today's call and will be referenced during management's prepared remarks. The press release, quarterly report, presentation, and webcast replay of today's call will be available on the company's website. Following management's prepared remarks, the company will address selected questions submitted in advance by shareholders.

Speaker #1: Earlier today, the company filed its quarterly report on Form 10-Q for the quarter ended June 30, 2026, and issued a press release with its financial results.

Speaker #1: Both are available in the investor section of the company's website. And accompanying presentation was posted to the investor section of the company's website before today's call.

Speaker #1: And will be referenced during management's prepared remarks. The press release, quarterly report, presentation, and webcast replay of today's call will be available on the company's website.

Speaker #1: Following management's prepared remarks, the company will address selected questions submitted in advance by shareholders. Before we begin, I would like to remind everyone that today's call includes forward-looking statements within the meaning of the federal securities laws.

Operator: Before we begin, I would like to remind everyone that today's call includes forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to the company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended 31 December 2025, and its quarterly report on Form 10-Q for the quarter ended 30 June 2026, for a discussion of these risks and uncertainties. The company undertakes no obligation to update any forward-looking statements except as required by law. Today's remarks may also refer to non-GAAP financial measures and supplemental measures that are not defined under GAAP. Any required reconciliations and explanations of these measures are included in the earnings release.

Speaker #1: These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

Speaker #1: Please refer to the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2025, and its quarterly report on Form 10-Q for the quarter ended June 30, 2026, for a discussion of these risks and uncertainties.

Speaker #1: The company undertakes no obligation to update any forward-looking statements except as required by law. Today's remarks may also refer to non-GAAP financial measures and supplemental measures that are not defined under GAAP.

Operator: The company undertakes no obligation to update any forward-looking statements except as required by law. Today's remarks may also refer to non-GAAP financial measures and supplemental measures that are not defined under GAAP. Any required reconciliations and explanations of these measures are included in the earnings release. With that, I'd like to turn the call over to TON Strategy Company's CEO, Kevin Wilson. Please go ahead.

Speaker #1: Any required reconciliations and explanations of these measures are included in the earnings release. With that, I'd like to turn the call over to Tom's Strategy Company CEO, Kevin Wilson.

Operator: With that, I'd like to turn the call over to TON Strategy Company's CEO, Kevin Wilson. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator, and good morning, everyone. For today's call, I'll begin with an overview of our Q2 operating progress and recent developments across Tom.

Kevin Wilson: Thank you, operator, and good morning, everyone. For today's call, I'll begin with an overview of our Q2 operating progress and recent developments across TON. Sara will then review our financial results and staking performance. I will come back on to discuss our capital allocation framework, our priorities for the H2, and the longer-term opportunity we see developing around TON and Telegram. The Q2 demonstrated the productivity of our Gram treasury at current scale, while we also made important progress in simplifying the rest of the business around that treasury and the TON ecosystem. We ended June with approximately 230.5 million Gram, including approximately 229.9 million Gram deployed in staking. During the quarter, we earned approximately 9.4 million Gram compared to approximately 2.2 million in the Q1 and recognized $15 million of staking revenue.

Speaker #2: Sarah will then review our financial results and staking performance. I will come back on to discuss our capital allocation framework, our priorities for the second half, and the longer-term opportunity we see developing around Tom and Telegram.

Speaker #2: The second quarter demonstrated the productivity of our grand treasury at current scale. While we also made important progress in simplifying the rest of the business around that treasury and the Tom ecosystem, we ended June with approximately 230.5 million grand, including approximately 229.9 million grand deployed in staking.

Speaker #2: During the quarter, we earned approximately 9.4 million grand compared to approximately 2.2 million in the first quarter. And recognized 15 million dollars of staking revenue.

Speaker #2: The increase in rewards primarily reflected Tom's April network upgrade, which increased the frequency of validation rounds, along with the larger amount of grand deployed throughout the quarter.

Kevin Wilson: The increase in rewards primarily reflected TON's April network upgrade, which increased the frequency of validation rounds along with the larger amount of Gram deployed throughout the quarter. Since staking operations began in August 2025, we estimate the treasury has earned approximately 13.8 million Gram through 30 June 2026, and generated approximately $22 million of cumulative staking revenue. Those rewards increased our Gram holdings without requiring additional capital to purchase the tokens. Once earned, the additional Gram can be staked to generate future rewards, creating a simple but powerful compounding effect. In Q2, we also largely completed the actions required to discontinue the inherited Verb legacy operations and focus the business around the Gram treasury and the TON ecosystem. During the quarter, we terminated vendor agreements, reduced contractor and personnel expenses, and certain lower margin service contracts. Sara will discuss the expected cost savings in greater detail.

Speaker #2: Since staking operations began in August 2025, we estimate the treasury has earned approximately 13.8 million grand through June 30, 2026, and generated approximately 22 million dollars of cumulative staking revenue.

Speaker #2: Those rewards increased our grand holdings without requiring additional capital to purchase the tokens. Once earned, the additional grand can be staked to generate future rewards creating a simple but powerful compounding effect.

Speaker #2: In Q2, we also largely completed the actions required to discontinue the inherited verb legacy operations and focused the business around the grand treasury and the Tom ecosystem.

Speaker #2: During the quarter, we terminated vendor agreements, reduced contractor and personnel expenses, and certain lower margin service contracts. Sarah will discuss the expected cost savings in greater detail.

Kevin Wilson: During the quarter, we terminated vendor agreements, reduced contractor and personnel expenses, and certain lower margin service contracts. Sara will discuss the expected cost savings in greater detail. I also want to briefly address the Kingsway advisory agreement. As I am sure you have seen, the company filed a Form 8-K on 10 August announcing that we terminated our advisory services agreement with Kingsway Capital Partners following the previously disclosed efforts to negotiate a settlement. The company stopped making monthly payments under the agreement in March 2026.

Speaker #2: I also want to briefly address the Kingsway Advisory Agreement. As I'm sure you've seen, the company filed a Form 8-K on August 10, announcing that we terminated our advisory services agreement with Kingsway Capital Partners following the previously disclosed efforts to negotiate a settlement.

Kevin Wilson: I also want to briefly address the Kingsway advisory agreement. As I am sure you have seen, the company filed a Form 8-K on 10 August announcing that we terminated our advisory services agreement with Kingsway Capital Partners following the previously disclosed efforts to negotiate a settlement. The company stopped making monthly payments under the agreement in March 2026. During the quarter, The Open Network community approved the rebrand of The Open Network's native digital asset from Toncoin to Gram with the ticker GRAM. The rebrand took effect on 8 June following a community vote. The token name and ticker changed, but the underlying blockchain, token balances, addresses, and smart contracts were not affected. Gram was the original name of the currency envisioned in Telegram's first TON white paper.

Speaker #2: The company stopped making monthly payments under the agreement in March 2026. During the quarter, the TON community approved the rebrand of TON's native digital asset from TON Coin to Grand, with the ticker GRAM. The rebrand took effect on June 8 following a community vote.

Kevin Wilson: During the quarter, The Open Network community approved the rebrand of The Open Network's native digital asset from Toncoin to Gram with the ticker GRAM. The rebrand took effect on 8 June following a community vote. The token name and ticker changed, but the underlying blockchain, token balances, addresses, and smart contracts were not affected. Gram was the original name of the currency envisioned in Telegram's first TON white paper.

Speaker #2: The token name and ticker changed, but the underlying blockchain token balances addresses and smart contracts were not affected. Grand was the original name of the currency in Telegram's first Tom white paper, restoring that identity helps distinguish the open network or Tom from Grand, the network's native currency.

Kevin Wilson: Restoring that identity helps distinguish The Open Network, or TON, from Gram, the network's native currency. The name change occurred as a series of technical improvements made TON faster, less expensive, and more useful. Pavel Durov, CEO of Telegram, has publicly described a seven-part initiative for improving TON. Based on public announcements, four elements have been identified to date: increasing network speed, reducing transaction fees, expanding Telegram's role in network validation, and restoring the Gram name. The remaining three elements have not been publicly detailed, and we will avoid speculating about what those steps may include. The actions announced so far have addressed several hurdles to expanding TON use, including by improving network speed, transaction costs, and validator support. I would like to take a moment to explain the technical changes in greater detail. Telegram's global platform gives TON a distribution engine that most blockchains do not have.

Speaker #2: The name change occurred as a series of technical improvements made Tom faster less expensive and more useful. Pavel Durov, CEO of Telegram, has publicly described a seven-part initiative for improving Tom.

Speaker #2: Based on public announcements, four elements have been identified to date: increasing network speed, reducing transaction fees, expanding Telegram's role in network validation, and restoring the Grand name.

Speaker #2: The remaining three elements have not been publicly detailed, and we will avoid speculating about what those steps may include. The actions announced so far have addressed several hurdles to expanding Tom use.

Speaker #2: Including by improving network speed, transaction costs, and validator support. And I'd like to take a moment to explain the technical changes in greater detail.

Speaker #2: Telegram's global platform gives Tom a distribution engine that most blockchains do not have, but that distribution is only valuable if the underlying network is fast and reliable enough for people to use inside everyday applications.

Kevin Wilson: Telegram's global platform gives TON a distribution engine that most blockchains do not have. But that distribution is only valuable if the underlying network is fast and reliable enough for people to use inside everyday applications. Consumer payments can't be slow or uncertain, and small, frequent transactions do not fulfill their value proposition if fees consume a meaningful portion of each transaction. The recent upgrades directly addressed both constraints, beginning with speed and followed by transaction costs.

Kevin Wilson: But that distribution is only valuable if the underlying network is fast and reliable enough for people to use inside everyday applications. Consumer payments can't be slow or uncertain, and small, frequent transactions do not fulfill their value proposition if fees consume a meaningful portion of each transaction. The recent upgrades directly addressed both constraints, beginning with speed and followed by transaction costs. On 9 April, TON deployed the Catchain 2.0 consensus upgrade, reducing blockchain times from approximately 2.5 seconds to approximately 400 milliseconds. Transaction finality improved from approximately 10 seconds to approximately 1 second, while estimated transaction throughput increased approximately tenfold. Later in April, the network completed a validator software update that reduced transaction fees approximately sixfold, bringing the average transaction cost to a small fraction of 1 cent under a fixed fee model. TON Strategy supported both updates through its participation in network governance.

Speaker #2: Consumer payments can't be slower uncertain, and small frequent transactions do not fulfill their value proposition if these consume a meaningful portion of each transaction.

Speaker #2: The recent upgrades directly addressed both constraints beginning with speed and followed by transaction costs. On April 9, Tom deployed the CatChain 2.0 consensus upgrade, reducing blockchain times from approximately 2.5 seconds to approximately 400 milliseconds.

Kevin Wilson: On 9 April, TON deployed the Catchain 2.0 consensus upgrade, reducing blockchain times from approximately 2.5 seconds to approximately 400 milliseconds. Transaction finality improved from approximately 10 seconds to approximately one second, while estimated transaction throughput increased approximately tenfold. Later in April, the network completed a validator software update that reduced transaction fees approximately sixfold, bringing the average transaction cost to a small fraction of 1 cent under a fixed fee model. TON Strategy supported both updates through its participation in network governance. Additional upgrades implemented in June improved how validators communicate, organize transactions, and reach consensus.

Speaker #2: Transaction finality improved from approximately 10 seconds to approximately 1 second, while estimated transaction throughput increased approximately 10-fold. Later in April, the network completed a validator software update that reduced transaction fees approximately 6-fold, bringing the average transaction cost to a small fraction of 1 cent under a fixed fee model.

Speaker #2: Tom's strategy supported both updates through its participation in network governance. Additional upgrades implemented in June improved how validators communicate, organize transactions, and reach consensus.

Kevin Wilson: Additional upgrades implemented in June improved how validators communicate, organize transactions, and reach consensus. A new networking layer reduced network traffic by about two to four times and improved node connectivity. TON also continued improving the infrastructure used by applications. New APIs expanded support for staking pools, validator operations, and decentralized applications, and data indexing improvements made frequently referenced blockchain information available two to four times faster. The technical upgrades have strengthened TON's ability to support activities such as payments and emerging AI agent applications inside Telegram, where near instant settlement and negligible transaction costs can make frequent automated transactions more practical. These upgrades matter directly to TON Strategy. We hold a strategically significant amount of Gram, substantially all of which is staked. Greater network activity can expand Gram's utility by creating more reasons for developers, service providers, and users to hold, stake, or use the asset.

Speaker #2: A new networking layer reduced network traffic by about 2 to 4 times and improved node connectivity. Tom also continued improving the infrastructure used by applications.

Kevin Wilson: A new networking layer reduced network traffic by about two to four times and improved node connectivity. TON also continued improving the infrastructure used by applications. New APIs expanded support for staking pools, validator operations, and decentralized applications, and data indexing improvements made frequently referenced blockchain information available two to four times faster. The technical upgrades have strengthened TON's ability to support activities such as payments and emerging AI agent applications inside Telegram, where near instant settlement and negligible transaction costs can make frequent automated transactions more practical. These upgrades matter directly to TON Strategy. We hold a strategically significant amount of Gram, substantially all of which is staked. Greater network activity can expand Gram's utility by creating more reasons for developers, service providers, and users to hold, stake, or use the asset.

Speaker #2: New APIs expanded support for staking pools, validator operations, and decentralized applications, and data indexing improvements made frequently referenced blockchain information available 2 to 4 times faster.

Speaker #2: The technical upgrades have strengthened Tom's ability to support activities such as payments, an emerging AI agent applications inside Telegram, where near-instant settlement and negligible transaction costs can make frequent automated transactions more practical.

Speaker #2: These upgrades matter directly to Tom's strategy. We hold a strategically significant amount of Grand substantially all of which is staked. Greater network activity can expand Grand's utility by creating more reasons for developers, service providers, and users to hold, stake, or use the asset.

Speaker #2: Over time, more productive use can support demand for GRAND. Separately, the April upgrades also contributed to the staking performance we reported for Q2. I will now turn the call over to Sarah to discuss our financial results and staking performance.

Kevin Wilson: Over time, more productive use can support demand for Gram. Separately, the April upgrades also contributed to the staking performance we reported for Q2. I will now turn the call over to Sarah to discuss our financial results and staking performance. Sarah?

Speaker #2: Sarah?

Speaker #1: Thank you, Kevin. And good morning, everyone. Our second quarter results reflect a strong quarter of staking performance and productive treasury operations. Before I walk through the results, I want to note that our first and second quarter results reflect the verb businesses is discontinued operations.

Sara Wilson: Thank you, Kevin, and good morning, everyone. Our second quarter results reflect a strong quarter of staking performance and productive treasury operations. Before I walk through the results, I want to note that our first and second quarter results reflect the Verb businesses as discontinued operations. Total revenue was $15 million, compared with $3 million in the first quarter. The increase was driven by higher staking rewards generated by our Gram holdings. Gross profit was $14.3 million or 95% of revenue, compared with $2.8 million or 95% of revenue in the first quarter. Total costs and expenses were $13.8 million, compared with $6.5 million in the first quarter. During the quarter, we resolved a historical equity plan issue that predated TONX, which resulted in the surrender of certain legacy RSUs.

Speaker #1: Total revenue was $15 million compared with $3 million in the first quarter. The increase was driven by higher staking rewards generated by our Grand holdings.

Speaker #1: Gross profit was $14.3 million or 95% of revenue, compared with $2.8 million or 95% of revenue in the first quarter. Total costs and expenses were $13.8 million compared with $6.5 million in the first quarter.

Speaker #1: During the quarter, we resolved a historical equity plan issue that predated Tom X, which resulted in the surrender of certain legacy RFUs. Under GAAP, this required us to recognize immediately the remaining 5.5 million dollars of unrecognized compensation expense associated with those awards.

Sara Wilson: Under GAAP, this required us to recognize immediately the remaining $5.5 million of unrecognized compensation expense associated with those awards. Therefore, this charge was non-cash and had no effect on cash flows or stockholders' equity. The results also included approximately $2.9 million of non-cash expense associated with the one-time setup fee under the Kingsway advisory agreement. This charge reflects the write-off of the remaining prepaid asset following the termination of the agreement on 10 August. Operating income from continuing operations was approximately $0.5 million, compared with an operating loss of $3.7 million in the first quarter. The improvement reflected the increase in staking revenue, and we generated positive operating income despite recognizing the $5.5 million accelerated stock compensation charge and the approximately $2.9 million non-cash Kingsway-related charge I just described.

Speaker #1: Therefore, this charge was non-cash and had no effect on cash flows or stockholders' equity. The results also included approximately $2.9 million of non-cash expense associated with the one-time setup fee under the Kingsway Advisory Agreement.

Speaker #1: This charge reflects the write-off of the remaining prepaid asset following the termination of the agreement on August 10th. Operating income from continuing operations was approximately $0.5 million compared with an operating loss of $3.7 million in the first quarter.

Speaker #1: The improvement reflected the increase in staking revenue and we generated positive operating income despite recognizing the 5.5 million dollar accelerated stock compensation charge and the approximately $2.9 million non-cash Kingsway related charge I just described.

Speaker #1: Net income from continuing operations before income taxes was approximately $83.5 million, compared with a net loss of approximately $91.3 million in the first quarter.

Sara Wilson: Net income from continuing operations before income taxes was approximately $83.5 million, compared with a net loss of approximately $91.3 million in the first quarter. The second quarter included an $82.8 million net gain from changes in the fair value of our Gram holdings, while the first quarter included an approximately $87.9 million net loss. As mentioned on prior earnings calls, we account for Gram at fair value, so changes in its market price can create significant non-cash gains or losses between reporting periods. Operating income, therefore, provides a clear view of the performance of our staking activities and the operating cost base. Our digital assets had a fair value of approximately $369.5 million at 30 June, compared with approximately $272 million at 31 March. The increase reflected both the additional Gram earned through staking and the increase in Gram's market value during the quarter.

Speaker #1: The second quarter included an $82.8 million net gain from changes in the fair value of our Grand holdings, while the first quarter included an approximately $87.9 million net loss. As mentioned on prior earnings calls, we account for Grand at fair value, so changes in its market price can create significant non-cash gains or losses between reporting periods.

Speaker #1: Operating income therefore provides a clear view of the performance of our staking activities and the operating cost base. Our digital assets had a fair value of approximately $369.5 million at June 30th, compared with approximately $272 million at March 31st.

Speaker #1: The increase reflected both the additional Grand earned through staking and the increase in Grand's market value during the quarter. We ended the quarter with approximately $29 million of cash in restricted cash and no debt.

Sara Wilson: We ended the quarter with approximately $29 million of cash and restricted cash and no debt. We continue to take a conservative approach to managing USD liquidity as our revenues are generated in Gram, while our operating obligations are denominated in USD. As Kevin mentioned, we also substantially wound down the legacy Verb operations during the quarter. Those actions are expected to remove approximately $4 million of inherited annual operating costs from our existing cost base. Turning to staking, we earned approximately 9.4 million Gram during Q2, bringing our total holdings to approximately 230.5 million Gram at 30 June. Our gross staking yield was approximately 17% on an annualized basis during the quarter. As TON is a blockchain, staking economics are determined by the network, not by us. Our focus is positioning the Treasury to efficiently capture those economics as they evolve.

Speaker #1: We continued to take a conservative approach to managing US dollar liquidity as our revenues are generated in Grand, while our operating obligations are denominated in US dollars.

Speaker #1: As Kevin mentioned, we also substantially wound down the legacy verb operations during the quarter. Those actions are expected to remove approximately $4 million of inherited annual operating costs from our existing cost base.

Speaker #1: Turning to staking, we earned approximately $9.4 million Grand during the second quarter, bringing our total holdings to approximately $230.5 million Grand at June 30th.

Speaker #1: Our gross staking yield was approximately 17% on an annualized basis during the quarter. As TON is a blockchain, staking economics are determined by the network, not by us.

Speaker #1: Our focus is positioning the treasury to efficiently capture those economics as they evolve. In April, a change to the network's consensus mechanism increased the frequency of block production with substantially all of our eligible Grand staked that translated directly into greater block production and higher staking rewards for us during the quarter.

Sara Wilson: In April, a change to the network's consensus mechanism increased the frequency of block production, with substantially all of our eligible Gram staked. That translated directly into greater block production and higher staking rewards for us during the quarter. Our Gram remains unlevered and at stake with institutional partners through segregated nominator pools. We remain focused on institutional-grade custody and staking infrastructure, with the goal of keeping our Gram secure, productively deployed, and compounding the Treasury over time. I will now turn the call back to Kevin.

Speaker #1: Our Grand remains unlevered and is staked with institutional partners through segregated nominator pools. We remain focused on institutional-grade custody and staking infrastructure with the goal of keeping our Grand secure, productively deployed, and compounding the treasury over time.

Speaker #1: I will now turn the call back to Kevin.

Speaker #2: Thank you, Sarah. I want to explain how we plan to make decisions from our stronger operating base. One of my priorities during my first three months has been to create a simple way of communicating how we evaluate the opportunities available to Tom's strategy.

Kevin Wilson: Thank you, Sarah. I want to explain how we plan to make decisions from our stronger operating base. One of my priorities during my first three months has been to create a simple way of communicating how we evaluate the opportunities available to TON Strategy. Going forward, we will describe that framework in three words: own, advance, and compound. Own refers to the foundation already in place, maintaining a strategically significant position in Gram and participating in securing the TON network through staking. We continue to manage the Treasury with a focus on Earnings per share rather than the absolute Treasury size. Advance reflects our ability to use that position, along with our public company platform and institutional relationships, to invest in, acquire, or partner with select businesses and infrastructure that can promote the overall growth of the TON ecosystem.

Speaker #2: Going forward, we will describe that framework in three words. Own, advance, and compound. Own refers to the foundation already in place. Maintaining a strategically significant position in Grand and participating in securing the Tom network through staking.

Speaker #2: We continue to manage the treasury with a focus on GRANT per share, rather than the absolute treasury size. Advance reflects our ability to use that position, along with our public company platform and institutional relationships, to invest in, acquire, or partner with select businesses and infrastructure that can promote the overall growth of the TOM ecosystem.

Speaker #2: Potential areas include payments, financial services, Tom developer infrastructure, AI, digital identity, and the custody liquidity and market structure to expand access to Grand. Compound describes how we evaluate capital allocation decisions.

Kevin Wilson: Potential areas include payments, financial services, TON developer infrastructure, AI, digital identity, and the custody, liquidity, and market structure to expand access to Gram. Compound describes how we evaluate capital allocation decisions. Does the allocation increase long-term value per share? Our objective is to produce returns beyond those available from simply holding Gram, which requires that we compare every use of capital, including additional Gram purchases, share repurchases, maintaining USD liquidity, and making operating or ecosystem investments on the same per share basis. This framework is not meant to be rigid, but it's there to guide our decisions. Every use of capital must compete against the alternatives, and retaining liquidity can be the right decision when no other available opportunity offers a sufficiently attractive expected return.

Speaker #2: Does the allocation increase long-term value per share? Our objective is to produce returns beyond those available from simply holding Grand. Which requires that we compare every use of capital, including additional Grand purchases, share repurchases, maintaining US dollar liquidity, and making operating or ecosystem investments on the same per-share basis.

Speaker #2: This framework is not meant to be rigid, but it's there to guide our decisions. Every use of capital must compete against the alternatives and retaining liquidity can be the right decision when no other available opportunity offers a sufficiently attractive expected return.

Speaker #2: Today, our current focus is on five main alternatives. Purchasing additional Grand, continuing to stake the Grand we own, repurchasing Tom ex-shares, retaining US dollar liquidity, and selectively investing in operating or ecosystem opportunities.

Kevin Wilson: Today, our current focus is on five main alternatives: purchasing additional Gram, continuing to stake the Gram we own, repurchasing TONX shares, retaining USD liquidity, and selectively investing in operating or ecosystem opportunities. We will be selective. We will not pursue an acquisition simply to add revenue or make the company larger or deploy capital merely because it is available. Any investment should either generate an attractive standalone financial return or strengthen TON adoption, Gram utility, or the market infrastructure around the asset in a way that can support long-term value of our Gram position, and ideally accomplish both. Put simply, we will selectively invest where strategic initiatives and shareholder value are mutually reinforcing.

Speaker #2: We will be selective. We will not pursue an acquisition simply to add revenue or make the company larger or deploy capital merely because it is available.

Speaker #2: Any investment should either generate an attractive standalone financial return or strengthen Tom adoption; Grand utility; or the market infrastructure around the asset in a way that can support long-term value of our Grand position.

Speaker #2: And ideally accomplish both. Put simply, we will selectively invest where strategic initiatives and shareholder value are mutually reinforcing. The capital allocation framework explains how we make decisions today.

Kevin Wilson: The capital allocation framework explains how we make decisions today, but I want to close our prepared remarks by discussing the long-term opportunity that informs where we may choose to advance strategic initiatives and why we believe the opportunity around TON and Gram can become more valuable over time. The internet made information native to the web. Information could be created, distributed, and accessed directly online globally. But asset ownership and economic activity have largely continued to depend on separate financial systems and intermediaries. We believe TON is designed to be able to make asset ownership and transactions increasingly native to the internet. Practically, this means that payments and settlements can occur directly within digital applications using programmable infrastructure that is continuously available. The TON infrastructure can support a broad array of activities across payments, financial services, commerce, entertainment, and more.

Speaker #2: But I want to close our prepared remarks by discussing the long-term opportunity that informs where we may choose to advance strategic initiatives, and why we believe the opportunity around TOM and GRAND can become more valuable over time.

Speaker #2: The internet made information native to the web. Information could be created, distributed, and accessed directly online globally. But asset ownership and economic activity have largely continued to depend on separate financial systems and intermediaries.

Speaker #2: We believe Tom is designed to be able to make asset ownership and transactions increasingly native to the internet. Practically, this means that payments and settlements can occur directly within digital applications using programmable infrastructure that is continuously available.

Speaker #2: The Tom infrastructure can support a broad array of activities across payments, financial services, commerce, entertainment, and more. Tom's fast settlement, low transaction costs, and scalable design make it a particularly well-suited to high volume, always-on applications.

Kevin Wilson: TON's fast settlement, low transaction costs, and scalable design make it particularly well-suited to high volume, always-on applications, while Telegram can provide a familiar interface and direct distribution to users on a global scale. Our primary treasury asset, Gram, serves as the native asset supporting the settlement, validator participation, network security, and coordination across TON. AI agents are one of the most relevant examples of how this shift could develop within the TON ecosystem. As AI evolves from generating information to taking authorized actions on behalf of users, an agent could be asked inside Telegram to buy a product, book a service, or pay another agent to complete a task. Telegram would provide the interface where the instruction is given, while TON could provide the identity, permissions, ownership, payment, and settlement instructions needed to complete it.

Speaker #2: While Telegram can provide a familiar interface and direct distribution to users on a global scale, our primary treasury asset, Grand, serves as the native asset supporting settlement, validator participation, network security, and coordination across Tom.

Speaker #2: AI agents are one of the most relevant examples of how this shift could develop within the Tom ecosystem. As AI evolves from generating information to taking authorized actions on behalf of users, an agent could be asked inside Telegram to buy a product, book a service, or pay another agent to complete a task.

Speaker #2: Telegram would provide the interface where the instruction is given, while Tom could provide the identity, permissions, ownership, payment, and settlement instructions needed to complete it.

Speaker #2: If this model develops, AI agents could initiate a much larger number of small, recurring, and automated transactions than users initiate manually today. This could expand transaction frequency across Tom, although the opportunity remains early and will depend on useful applications being built and adopted.

Kevin Wilson: If this model develops, AI agents could initiate a much larger number of small, recurring, and automated transactions than users initiate manually today. This could expand transaction frequency across TON, although the opportunity remains early and will depend on useful applications being built and adopted. For TON Strategy, the relevance is that increased activity can create recurring reasons for developers, applications, service providers, and users to hold, stake, or use Gram. If TON becomes increasingly useful as infrastructure for consumer, application-driven, and automated economic activity, network adoption could expand Gram's utility and strengthen the long-term opportunity of our substantial treasury position. Our role is to own and stake Gram through institutional custody, participate in network validation, and provide public market access to that opportunity. Where we have a credible advantage, we can selectively invest or partner around capabilities to support TON's adoption.

Speaker #2: For Tom's strategy, the relevance is that increased activity can create recurring reasons for developers, applications, service providers, and users to hold, stake, or use Grand.

Speaker #2: If Tom becomes increasingly useful, as infrastructure for consumer, application-driven, and automated economic activity, network adoption could expand Grand's utility and strengthen the long-term opportunity of our substantial treasury position.

Speaker #2: Our role is to own and stake Grand through institutional custody, participate in network validation, and provide public market access to that opportunity. Where we have a credible advantage, we can selectively invest or partner around capabilities to support Tom's adoption.

Speaker #2: We are focused on strategic opportunities with identifiable economics, and credible paths to improving long-term value per share. Looking ahead, our priorities for the second half are to manage and compound the Grand treasury, maintain appropriate US dollar liquidity, improve investor access to Tom, and evaluate selected opportunities under the framework we discussed today.

Kevin Wilson: We are focused on strategic opportunities with identifiable economics and credible paths to improving long-term value per share. Looking ahead, our priorities for the H2 are to manage and compound the Gram treasury, maintain appropriate USD liquidity, improve investor access to TON, and evaluate selected opportunities under the framework we discussed today. Our objective is to develop an operating company around a strategically significant Gram position so that the treasury, our public company platform, and any future operating capabilities can reinforce one another over time. That concludes our prepared remarks. Operator?

Speaker #2: Our objective is to develop an operating company around a strategically significant Grand position, so that the treasury, our public company platform, and any future operating capabilities can reinforce one another over time.

Speaker #2: That concludes our prepared remarks. Operator?

Speaker #3: Thank you. We will now begin the question-and-answer portion of the call. Today's questions were submitted in advance by shareholders and will be moderated by Alec Wilson from Gateway Group.

Operator: Thank you. We will now begin the question and answer portion of the call. Today's questions were submitted in advance by shareholders and will be moderated by Alec Wilson from Gateway Group. Sir, please proceed.

Speaker #3: Sir, please

Speaker #2: Thank you. Our first question is for Sarah. How much of the benefit from the

Alec Wilson: Thank you. Our first question's for Sarah. How much of the benefit from the wind down of the Verb operations was reflected in Q2, and when should we expect the full run rate savings to become visible? What, if any, meaningful residual costs or obligations remain that are associated with the legacy business?

Speaker #4: line down of the verb operations was reflected in Q2, and when should we expect the full run rate savings to become visible? And what, if any, meaningful residual costs or obligations remain that are associated with the legacy business?

Speaker #1: Hey, Alex. Thanks. Sure. So, based on the current assessment, we expect the wind-down of the legacy Verb businesses to reduce annual opex by approximately $4 to $5 million.

Sara Wilson: Hey, Alec. Thanks. Sure. Based on our current assessment, we expect the wind down of the legacy Verb businesses to reduce annual OpEx by approximately $4 million to $5 million, and that's on a normalized look-back basis. Because we continue to incur certain transition wind down costs, we expect the majority of those savings to become visible probably in Q4. I should say while we've substantially wound down the legacy operations, we definitely expect certain limited obligations, think legal, admin, other wind down activities, to continue into next year. Those costs are expected to be significantly lower, though, than the historical cost base. I think it's also worth noting, beyond the financial savings, an important benefit is really just organizational focus. As we complete the transition away from the legacy business, our team can dedicate substantially more time and resources to executing and focusing on a core strategy.

Speaker #1: And that's on a normalized look-back basis. Because we continue to incur certain transition wind-down costs, we expect the majority of those savings to become visible, probably in Q4.

Speaker #1: I should say, while we've substantially wound down the legacy operations, we definitely expect certain limited obligations, think legal, admin, other wind down activities to continue into next year.

Speaker #1: Those costs are expected to be significantly lower, though, than the historical cost base. I think it's also worth noting, beyond the financial savings, an important benefit is really just organizational focus.

Speaker #1: As we complete the transitional way from the legacy business, our team can dedicate substantially more time and resources to executing and focusing on a core strategy.

Speaker #4: Great. Thanks, Sarah. Next one's for Kevin. What developments would give management confidence that Tom is becoming more deeply adopted? And how does that translate to value for Tom's strategy?

Alec Wilson: Great. Thanks, Sarah. Next one's for Kevin. What developments would give management confidence that TON is becoming more deeply adopted, and how does that translate to value for TON Strategy?

Speaker #2: Yeah, thanks, Alex. And that's a great question. We think about adoption in a few different ways. First, we really look at how people are actually using TON-powered applications inside Telegram.

Kevin Wilson: Yeah. Thanks, Alec, and that's a great question. We think about adoption in a few different ways. First, we really look at how people are actually using TON-powered applications inside Telegram. By that I mean not just holding Gram as an investment, but also are they using it for payments, digital goods, things like mini apps, games, what type of creator monetization is happening and other everyday transactions. I think that real utility is ultimately what's going to create durable demand for a frontier technology like The Open Network. Second, I think we're really looking at a few different aspects of the developer ecosystem because a healthy developer environment is often really the leading indicator of long-term network value. Then finally, we look at the financial health of the network itself.

Speaker #2: And by that, I mean not just holding Grand as an investment, but also are they using it for payments, digital goods, things like mini apps, games, what type of creator monetization is happening, and other everyday transactions.

Speaker #2: I think that real utility is ultimately what's going to create durable demand for a frontier technology like the Open Network. And second, I think we're really looking at a few different aspects of the developer ecosystem, because a healthy developer environment is often really the leading indicator of long-term network value.

Speaker #2: And then finally, we look at the financial health of the network itself. So things like growth and active wallets, transaction volumes, asset state, validator participation, and really overall network activity itself, these things all tell us whether adoption is broadening and whether the ecosystem is becoming more resilient.

Kevin Wilson: So things like growth in active wallets, transaction volumes, asset stake, validator participation, and really overall network activity itself. These things all tell us whether adoption is broadening and whether the ecosystem is becoming more resilient. I think finally, we would like to see improvements in market structure and believe that this is an area where we can make an impact. Things like greater exchange availability, deeper liquidity in Gram, custodial support for Gram, and broader institutional participation, and really easier access for investors. These things all help friction and support wider adoption over time. For our company, those developments matter because our objective is not just to own Gram. We want to own the strategic position in what we believe can become a primary blockchain that powers the next digital economy. As that ecosystem grows, we believe the value of our treasury can appreciate.

Speaker #2: I think finally, we would like to see improvements in market structure and believe that this is an area where we can make an impact.

Speaker #2: Things like greater exchange availability, deeper liquidity in GRND, custodial support for GRND, broader institutional participation, and really easier access for investors—these things all help reduce friction and support wider adoption over time.

Speaker #2: And for our company, those developments matter because our objective is not just to own Grand. We want to own a strategic position in what we believe can become a primary blockchain that powers the next digital economy.

Speaker #2: And as that ecosystem grows, we believe the value of our treasury can appreciate. Our staking operations will become more valuable. And we then have greater opportunities to deploy capital into the broader Tom ecosystem.

Kevin Wilson: Our staking operations will become more valuable, and we then have greater opportunities to deploy capital into the broader TON ecosystem. In other words, we're investing not just in a digital asset, but in the growth of what we view as an important frontier technology that we feel has an enormous potential.

Speaker #2: So in other words, we're investing not just in a digital asset, but in the growth of what we view as an important frontier technology that we feel has an enormous potential.

Speaker #4: Great, thanks, Kevin. Sarah, we have another one for you. Following the April network upgrade, what are the main variables to consider that could cause staking economics to move from current levels?

Alec Wilson: Great. Thanks, Kevin. Sarah, we have another one for you. Following the April network upgrade, what are the main variables to consider that could cause staking economics to move from current levels? How should we think about the staking economics for the next few quarters and into 2027?

Speaker #4: And how should we think about the staking economics for the next few quarters and into 2027?

Speaker #1: Thanks, Alec. First, I note that we don't have any unique visibility into future governance decisions or protocol changes beyond what's publicly available to the community.

Sara Wilson: Thanks, Alec. First, I note that we don't have any unique visibility into future governance decisions or protocol changes beyond what's publicly available to the community. As we've mentioned a couple of times now, the April network upgrade improved validator performance, which increased the number of blocks being validated, and as a result, materially improved our staking economics. We were well-positioned to benefit because we substantially had all of our treasury staked. Looking ahead, though, we are not running the business on the assumption that today's staking economics could continue indefinitely. Yields are naturally going to evolve as the network matures. They can be influenced by governance decisions, including potential changes to block rewards, as well as validator participation and broader dynamics. As a result, we take a conservative approach when planning the business.

Speaker #1: As we've mentioned a couple of times now, the April network upgrade improved validator performance, which increased the number of blocks being validated and, as a result, materially improved our staking economics.

Speaker #1: We were well positioned to benefit because we substantially had all of our treasury staked. Looking ahead, though, we are not running the business on the assumption that today's staking economics could continue indefinitely.

Speaker #1: Yields are naturally going to evolve as the network matures. They can be influenced by governance decisions, including potential changes to block rewards. As well as validator participation and broader dynamics.

Speaker #1: As a result, we take a conservative approach when planning the business. And I'd say more broadly, and Kevin's touched on this, we've never viewed the investment case for Tom as being solely about staking yields.

Sara Wilson: I'd say more broadly, and Kevin's touched on this, we've never viewed the investment case for TON as being solely about staking yields. Over the long term, we think the value of this network is going to be driven by adoption. As Kevin mentioned, developers building applications and other things like stablecoins, payments, and real economic activity happening on-chain. Staking is an important component of what we do, but it's really only one opportunity. Our focus is on supporting the long-term growth of the network. We believe that's ultimately what's going to create the best ecosystem and drive the most return from our shareholders.

Speaker #1: Over the long term, we think the value of this network is going to be driven by adoption. Again, as Kevin mentioned, developers building applications and other things like stablecoins, payments, and real economic activity happening on-chain.

Speaker #1: Staking is an important component of what we do, but it's really only one opportunity. Our focus is on supporting the long-term growth of the network.

Speaker #1: And we believe that's ultimately what's going to create the best ecosystem and drive the most return for our shareholders.

Speaker #4: Great. Thank you, Sarah. And Kevin, maybe one more for you. Is staking as a service an offering for outside grandholders an opportunity that you all are considering?

Alec Wilson: Great. Thank you, Sarah. Kevin, maybe one more for you. Is staking as a service an offering for outside Gram holders an opportunity that you all are considering?

Speaker #2: Yeah. Thanks, Alec. So we're not currently looking at staking as a service, but I think it's definitely the type of opportunity we might evaluate in the future.

Kevin Wilson: Yeah. Thanks, Alec. We're not currently looking at staking as a service, but I think it's definitely the type of opportunity we might evaluate in the future. I think really the broader point behind our advance pillar that I identified earlier on in the call is that we believe our position in The Open Network ecosystem creates opportunities beyond just owning Gram. Today, we're the largest holder of Gram outside of Telegram, and we're also the largest validator on the network. That gives us very meaningful operating experience and I think a really unique perspective on how the ecosystem is evolving. As that network matures, we'll evaluate opportunities where we believe we can really leverage that expertise and our Gram holdings to create value both for the ecosystem and TONX shareholders. But our approach here will remain very disciplined.

Speaker #2: I think, really, the broader point behind our advanced pillar that I identified earlier on in the call is that we believe our position in the TON ecosystem creates opportunities beyond just owning Grand.

Speaker #2: Today, we're the largest holder of Grand outside of Telegram, and we're also the largest validator on the network. And that gives us very meaningful operating experience.

Speaker #2: And I think it's a really unique perspective on how the ecosystem is evolving. As that network matures, we'll evaluate opportunities where we believe we can really leverage that expertise and our GRAND holdings to create value, both for the ecosystem and TONX shareholders.

Speaker #2: But our reproach here will remain very disciplined. We'll pursue opportunities where we believe that we have a sustainable competitive advantage and where we see an attractive risk-adjusted return on capital.

Kevin Wilson: We'll pursue opportunities where we believe that we have a sustainable competitive advantage and where we see an attractive risk-adjusted return on capital. Staking as a service is certainly representative of the types of opportunities we will consider as we execute on that advance pillar.

Speaker #2: And staking as a service is certainly representative of the types of opportunities we will consider as we execute on that advanced pillar.

Speaker #4: Thank you. That concludes the Q&A session for today's call. Kevin, I'll turn it back to you for your closing remarks.

Alec Wilson: Thank you. That concludes the Q&A session for today's call. Kevin, I'll turn it back to you for your closing remarks.

Speaker #2: Yeah. Thank you, Alec. And thank you, everyone, who submitted questions. We entered the second half with a productive grand treasury, a more focused operating structure, and a clear framework for allocating capital.

Kevin Wilson: Yeah. Thank you, Alec, and thank you everyone who submitted questions. We entered the second half with a productive Gram treasury, a more focused operating structure, and a clear framework for allocating capital. We believe TON's technical progress and Telegram-enabled distribution advantage create a differentiated long-term opportunity, and TON Strategy Company is well-positioned to participate and enable that opportunity through the public markets. To our shareholders, thank you for your continued support. Operator, that concludes today's call.

Speaker #2: We believe Tom's technical progress and Telegram-enabled distribution advantage created differentiated long-term opportunity. And Tom's strategy is well positioned to participate and enable that opportunity through the public markets.

Speaker #2: Through our shareholders, thank you for your continued support and operator, that concludes today's call.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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