Good day, everyone. Welcome to the Sol Strategies Inc. Fiscal Quarter ended March 31, 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] On the call is Leah Wald, Chief Executive Officer; Doug Harris, Chief Financial Officer; and Max Kaplan, Chief Technology Officer; and John Ragozzino from ICR. At this time, I would like to turn the conference over to John Ragozzino with ICR. Please go ahead, sir.

Good afternoon, and thank you all for joining the Sol Strategies fiscal second quarter 2025 earnings conference call. Before we get started, I want to remind everyone that certain statements discussed on this call are based on information as of today, June 2nd, 2025, and contain forward-looking statements, which are subject to risks and uncertainties given our operating history, market volatility and industry growth. Trends could materially deviate from today's levels, and as such, actual results could differ materially from our forward-looking statements. The comments made during this conference call were in the latest reports in SEDAR filings, each of which can be found on our website at www.solstrategies.io, or under our profile at www.sedarplus.ca. The company has made assumptions that no significant events occur outside the company's normal course of business and that the current trends in respect of digital assets continue. Listeners are cautioned that metrics of our business fluctuate and may increase and decrease from time to time, and as such, fluctuations are beyond the company's control. The company does not undertake any duty to update any forward-looking statements, except where required by law. The company also wants to caution listeners that past performance is not indicative of future performance and that current trends in the business and demand for digital assets may not continue, and listeners should not put undue reliance on past performance and current trends. This call will touch on certain unaudited performance metrics of the business through the quarter ended March 31, 2025, provided in the earnings press release issued on May 30, 2025, and I would encourage each of you to review the forward-looking statements, risk factors disclosures and similar disclosures in the press release. Please note, the dollar amounts referenced are in Canadian dollars unless otherwise noted. Leah will review Sol Strategies' progress towards the company's strategic objectives within the rapidly growing digital assets industry during the March quarter, Doug will then review the financial performance during the quarter and provide an update on our balance sheet and capital markets activity, and Max will discuss our operations and technology initiatives before we open the floor for your questions. With that, let me turn the call over to Leah.

Thank you, John. This quarter marked a watershed moment in our transformation. We acquired Laine, one of the most respected validator operations in the Solana ecosystem propelling our total staked assets from 1.57 million SOL in December to 3.39 million SOL by quarter end. A 113% increase that now places Sol Strategies among the largest validator operators on the network. We now support over 5,500 unique wallets and have been recognized as a preferred validator within BitGo's institutional platform. With industry-leading compliance certifications in place and our planned uplisting to the NASDAQ, we're not just scaling, we're setting the institutional standard for secure and transparent staking, redefining what institutional-grade blockchain infrastructure looks like. These milestones are not isolated achievements. They are clear signals of our role in shaping the financial rails of tomorrow. We're standing on the edge of a generational shift in capital markets and Sol Strategies is building the rails for it. Years ago, I was drawn to Bitcoin for its promise to democratize access to financial systems. It was a bold foundational change. Today, we're witnessing that same transformational potential through tokenization. Just as electronic trading disrupted Wall Street, tokenization has the potential to transform how the world can access and trade assets, making markets faster, cheaper, more transparent and truly global, and this transformation can only be built at scale on Solana. Solana's unmatched speed, scalability and cost efficiency aren't just nice to have. They're prerequisites for tokenizing real-world assets at scale. That's why we're not just betting on Solana, we're building on it with conviction. Tokenization isn't a buzzword for us, it's a strategic mandate. We are positioning Sol Strategies to become the first public company to tokenize equity on Solana, and we're leading that charge with intent, speed and credibility. We're witnessing a fundamental…

Thank you, Leah. I'm pleased to present Sol Strategies financial results for the three and six months ended March 31, 2025. Before I dive into the specifics of the financial results for the period, I would like to take a moment to provide some important context around the various factors impacting the reported results. Overall, we are very encouraged by the financial results achieved in our second fiscal quarter, which serve as an early validation of the long-term trajectory we expect for our staking and validator business. Performance this quarter reflects meaningful [sub] (ph) progress in both operational scale and revenue generation, driven by growing stake balances and the early contribution from our recent acquisition of the Laine validator. For the three months ending March 31, 2025, our total comprehensive loss was approximately $32.5 million compared to $7.7 million of total comprehensive income for the prior period. During the first half of fiscal 2025, total comprehensive loss was $24.7 million compared to total comprehensive income of $14.7 million in the first half of fiscal 2024. It's important to emphasize that these figures include significant noncash mark-to-market adjustments related to the decline in SOL prices during the quarter, which resulted in an unrealized loss on cryptocurrencies of $27.7 million compared to a $7.9 million unrealized gain in the prior period. In the six month period ending March 31, 2025, the unrealized loss on cryptocurrencies was $23 million compared to income of $12.2 million in the first half of the prior year. These results reflect an accounting treatment for SOL held on our balance sheet rather than any operational weakness of the company. Encouragingly, SOL prices have rebounded over 30% since the lows experienced near quarter end. And if these levels hold or the rebound continues, we would expect a similarly positive…

Thank you, Doug. I also want to echo Leah's sentiment on how excited I am for the future of Solana. Like Leah, I also started in the Bitcoin ecosystem. I wanted to make it an important distinction, however, Bitcoin is an asset, Solana is a network. Solana is more than just a blockchain. It's the most capable infrastructure layer for the next wave of real-world asset tokenization with [unmet] (ph) throughput, instant finality and low transaction costs, Solana offers a scalability and efficiency required to support the institutional-grade tokenization of real assets. This doesn't just mean equities, but also real estate, credit, commodities and more. As tokenization gains traction across financial markets, the need for a high-performance network that can support massive transaction volumes becomes increasingly clear, and Solana stands alone in its ability to meet that demand today. This emerging shift presents a multitrillion dollar opportunity for the Solana ecosystem. At Sol Strategies, we're proud to lead this transformation. We recently announced our intention to become the first company to natively tokenize its common equity on Solana, a move that reinforces our position as both a technological leader and a capital markets innovator. We're not alone in this vision. Kraken, one of the world's largest centralized exchanges, has also announced plans to issue tokenized equities on Solana, selecting it over their own Ethereum base layer 2. The conversion in [traditional] (ph) markets in blockchain is happening, and Solana is quickly establishing itself as the foundational infrastructure powering this evolution. Due to our validator business, which I will get into next, we are uniquely positioned to benefit from the significant increases in transaction activity that the broader trends of tokenized real world assets, including equities, such as our own shares are poised to drive to the Solana network. This past…

Thank you, Max, for the update on our staking and validator strategy. At Sol Strategies, we believe Solana isn't just a blockchain. It's the infrastructure layer of the future of finance. Its speed, scalability and low-cost position it as a platform of choice for institutional adoption, and we're building every day to meet that moment. We're committed to operating at the highest levels of security, compliance and transparency. That's why we've completed SOC1 Type 1, SOC 2 Type 1 and ISO 27001 audits, not just for our own business, but as a signal of how we believe the validator landscape should operate. And because blockchain data is inherently public, we've taken an extra step of making our performance more accessible and digestible. Our dashboard on Dune referenced in our MD&A provides a daily unaudited view of validated revenue and activity, offering more visibility than traditional public companies, which typically report only quarterly. We believe transparency should be the default. We're proud to lead by example and invite others to follow our journey through this level of open reporting. Sol Strategies isn't just participating in the next chapter of finance, we're helping build it. Thank you all for joining today. Operator, please open the line for questions.

Certainly. Thanks you Ms. Wald. [Operator Instructions] We'll go first this afternoon to Darren Aftahi with ROTH. Darren, please go ahead.

Hi. Good afternoon and thanks for taking my questions and congrats on the progress in just a short time. Two, if I may. Can you just start -- like you talked about tokenization and the Solana network. Can you just kind of maybe talk about your road map there and what that looks like and where you kind of plan to invest money going forward?

Yes, I'll start for one second. But Darren, thank you so much for the great question. And I'm glad that Max jumps in here again, our CTO. I will toss it to him here, because I think that it's the most exciting initiative at the firm.

Cool. Yes, I can talk a little bit about that. So I think we announced our intentions to be the first company -- public company in the world to issue its shares natively on Solana. And I think one of the really exciting things about our business is really this, it's that. Because we run validators, the more use the network is the more revenue the company is going to generate. And if there are more assets and there's more trading volume that's on Solana, we're going to directly capture that really because we're running validators. And really, in general, the more volume that happens -- the more volume that happens on chain, the more revenue the company is going to generate. So, in terms of road map, we're going to keep pushing on -- we announced our intention to be the first company to listed shares there. We're going to keep focusing on our staking business. And then there's other things that I think we're going to look at, but nothing to say just yet there.

Great. A couple more, if I could. Just on your tech stack beyond tokenization kind of the plans for investment there. And then I'm kind of curious, as you think through your balance sheet, when you look at the opportunities between kind of investment, maybe a third tranche versus investment in acquiring validators versus just buying Solana in the open market via treasury, like how do you kind of think about the use of your balance sheet kind of deploying that for the overall platform?

Well, yes, I'll take the tech question, and then I'll hand over the balance sheet one to Leah. But in terms of investment, we're really focused on building right now the premier staking product that there is, there's a lot of things that I'll talk about there. But our total assets under delegation is growing pretty quickly, where right now, we're at 3.5 million SOL delegated to us, which puts us in about the top 20, I believe, operators on the network. We're going to keep focusing on building better products there. And similarly, we just launched a mobile app. That's the first real mobile app that's dedicated to staking, but it also functions as a wallet and there's other things we're looking at in that space. But I think primarily, we want to be an infrastructure provider. And I think you'll see more things that we do in the infrastructure space. I'll pass it over to Leah to take the balance sheet question.

No. I think that's perfect. And I think that it's definitely the question to ask, and thank you again for the question. So our treasury strategy, as mentioned, is structured to support both the organic and inorganic growth in a disciplined banner. On the organic side, we're focused on reinvesting into the core infrastructure, validator operations, technology development that Max just spoke to. And then again, meaningful returns and long-term strategic value by continuing that flywheel. On the inorganic side, we continue to evaluate acquisitions, we're always going to be evaluating opportunities on that front that creates strategic alignment, return on capital for or validator business. So with respect to capital, as you asked the question around taking down the next tranche, obviously, I can't speak to that at the moment. However, we are definitely explicitly always going to be looking to increase our SOL treasury. We believe that, that makes us the best bet on SOL, as that means that you are -- we are conviction driven. By increasing SOL exposure, especially when paired with productive staking strategies that we believe we have, that supports both the treasury growth and the long-term shareholder value since it's reinvested and we gained that staking yield. So any moves in this area, as you can imagine, will be done methodically and transparently. And definitely within existing risk and compliance frameworks, of course.

That’s helpful. And if I could just squeeze one more in maybe for Max. I just talked about a ton, but with crypto obviously, cybersecurity is super important. So I'm just kind of curious how in your road map quantum cryptography kind of fits into the overall Sol Strategies tech platform? Thanks.

Yes, great question. On the security front, overall, there's plenty of things that we're doing. And one of the things we talked about was all the security audits that we've done, and we've also published blogpost on security. I know your question was more specifically on Quantum. And that is something that I think Solana is going to -- I don't want to just say Solana, but really crypto in general is going to face -- there are -- there is different opinions in terms of how close we are to that. But Solana was actually one of the first networks to really do some innovation there in terms of like Quantum safe vaults and things like that. It's an area that we're looking at and certainly an area that we want to see Solana takes seriously. And so far from everything we've seen, it definitely is. And we're going to keep looking there, but I think that's what I have to say right now in regards to that.

Perfect. Thanks, guys. Appreciate it.

Thank you.

Thank you. [Operator Instructions] We'll go next now to Kevin Dede of H.C. Wainwright.

Leah, can you hear me okay.

I’m hearing. Yes.

Great. Great. Great. Thanks for having me on the call. I appreciate it. Could you maybe detail a few of the hurdles or bottlenecks you might encounter and the timing you're expecting for your NASDAQ listing?

Thanks, Kevin. We will keep everybody appraised as we can. As of right now, what we press released is that, our application has been filed and we're working towards that goal.

Working towards, I'm sorry?

Working towards the goal of continuing to uplift the future plans being listing on the CSE to NASDAQ and tokenized. Unfortunately, I just can't speak to anything else at the moment. Apologies.

No. Okay. Could you offer the business model view of your Pudgy Penguin deal? How are you white labeling? And what are the financial implications?

Yes. I will turn [Technical Difficulty] speak to it. It's very exciting. So business model view, I'll actually step back even further of business strategy. The exciting thing about Pudgy Penguin being it is our expansion of running a white-label validator service, which we believe is definitely going to be seeing explosive growth, especially as more institutional players join not just a real-world tokenized asset world, but also continue to tokenize their funds, many of which are being done on Solana. So with Pudgy Penguins, it was -- it's very interesting to be running their validator. Max, maybe you can speak to some of the economics and how that actually works.

Yes, absolutely. Great question. Yes, the Pudgy Penguin thing is really exciting. Pudgy Penguins was predominantly on Ethereum, but over the last couple of months, they've moved to Solana. And we're pretty excited to help such a big brand move to Solana. In terms of the economics, without getting into the details, really what we're doing is the more stake that Pudgy Penguins is going to attracts the more money both of our companies are going to generate and is set up in a way where that really like everyone is incentivized both parties, I should say, are incentivized to roll it out. And Pudgy Penguins is a big brand, and the validator certainly has been growing. I think it's like 76,000 SOL or something right now. And really, in general, the more stake that it continues to get which has been growing, the more money we're going to make and the more money Pudgy Penguins were going to make.

So while I have you, Max, can you help me understand [indiscernible] side, how you see Solana advantaged in an RWA application versus Avalanche and Algorand, both of which already have financial applications associated with them, maybe even Polygon, because I think that's got real estate attached?

Great, great question. So let's go into that. But really, like I want to start higher level is like, these assets are going to want to go where volume is and users are, right? And if you look at most metrics, right, in terms of like number of transactions, unique wallet [Dex] (ph) volume, things like that, Solana is really the winner, right? And one of the most important things for like any asset is liquidity. And Solana consistently has been having -- in terms of Dexus, Solana has definitely had the highest volume, right? In terms of Avalanche, Polygon, those other networks. I think they're really pushing forward in that space, but pushing forward in terms of biz dev. I think some things might go there. But really, in general, I don't know the terms of any deal or anything like that, right? But really, like if you look at in terms of what's really important for an RWA. It really comes down to liquidity, volume and users, and Solana is through and through the winner there, especially compared to the other networks that you talked about, which this data -- the cool thing about this is, this data is public. And the other thing I think I would say, too, is that Solana, the Solana Foundation itself has really -- these tokenized equities, they can't really be treated like normal tokens because to hold the stock, you need to do KYC and things like that. Solana has pushed a standard forward where these assets could actually comply with that where some of these other networks happen, right? And I think the regulatory stuff is [Technical Difficulty] in terms of those three pillars that I talked about, really users liquidity and volume. I think it's pretty clear to me and almost -- I would say this. It's clear to me that Solana is going to be the winner there.

Okay. I appreciate that perspective. Can we take your view on MEV now. I think Gito's closed and guys have read something about Frankendancer. Help me understand how you're going to maneuver given the validator nodes you're running and the amount of Solana you have state, how you're going to maximize extractive all value?

Another great question there. So you mentioned a few things there. You mentioned Firedancer. You mentioned MEV and Gito. And without getting super in the lead here, we've run, so we run four validators, and we actually run two of them on Firedancer, two of them on Gito and the ones that run on Firedancer, they also run Gito as well. But really, in general, like in maximizing MEV. In terms of extraction, it's not really something that we're necessarily looking to do. And the reason that I say -- I just want to make this clear. we are capturing an MEV. But in terms -- MEV can be toxic at points, right? And really, one of our worries is that, if users aren't getting the best prices, they're not going to want to come on chain to trade a real-world asset, right? So in the short term, maybe if we’re ripping users off in terms of getting good prices and things like that, that might lead to more revenue. In the long run, that really hurts in my opinion, where it's going to -- it's going to prohibit these institutional flows from actually wanting to trade on chain. We're really focused on doing the right thing here. And if you ask almost anyone in the space, the right thing is to make sure that users are getting good prices. And not all MEV is bad. Some MEV is really there to make sure that your transactions get through quicker. But we are not going to do anything that you might have heard like sandwiching or things like that. That's just not something that we're going to do because we really believe that if these tokenized assets come on chain and users continue to get the best prices with the best liquidity, that is going to be best for us in Solana overall.

Last question for me. Is your Orangefin app available in the U.S.?

Yes, it is. It's available on iOS, Android and the Solana mobile store in the U.S.

Okay. In the US. Okay, great, great. Thanks so much Max for all the color. I really appreciate it.

Thank you for your questions.

Thank you. [Operator Instructions] We'll go next now to James [Sowers] (ph) of Sowers Family Office. James, please go ahead.

Thanks for taking my question today. Can you guys hear me alright?

We can.

Okay. Great. So I was wondering, given the $480 million trading under the convertible note facility with ATW Partners and the recent unfiled based shelf sectors for $1 billion in additional securities, how do you guys think about capital allocation winging in against some shareholder dilution?

We're absolutely considering everything and being very measured as we consider financing opportunities. will remain transparent as anything comes. However, we have a very experienced team, very experienced Board. Our CFO, Doug on the call, has many, many years of experience looking at these types of deals. So, I think that, that's a great question to ask, especially as a shareholder, and we'll be very measured in our approach of thinking what to do on that front.

Okay. Thank you.

Thank you.

Thank you. And Ms. Wald, it appears we have no further questions this afternoon. I'd like to turn the conference back to you for any closing comments.

Yes. Thank you all so much for joining us today and for your continued interest and support of our company. We're excited about opportunities ahead and look forward to updating you again on our progress during our next quarterly call. Have a great week.

Thank you very much, Ms. Wald. Again, ladies and gentlemen, that will conclude today's Sol Strategies fiscal quarter ended March 31, 2025 earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.