Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Tuesday, May 12, 2026 at 5:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Allan J. Marshall
  • Chief Financial Officer — Andrew J. Norstrud
  • Chief Strategy Officer — Brian Benjamin Rudick

TAKEAWAYS

  • Solana Holdings -- Increased by 189,000 tokens, representing a 9% sequential rise or 35% annualized growth.
  • Share Repurchases -- Repurchased approximately 2.5 million common shares for $2 million at $0.80 per share, below NAV, to increase Solana per share.
  • Convertible Note Issuance -- Issued a $36 million in-kind convertible note in January, reducing credit risk and increasing Solana per share upon conversion at a price above NAV.
  • New Capital Raise -- Completed a $7 million equity plus warrants offering above NAV that contributed to Solana per share growth.
  • Revenue -- Total revenue was $4.6 million, up from $3.2 million in the prior year quarter.
  • Nine-month Performance -- For the nine months ended March 31, 2026, digital asset revenue was $14.7 million and total revenue was $221.8 million versus $11.5 million a year prior, reflecting the launch of the digital asset treasury business in 2025.
  • Net Loss -- Net loss for the quarter totaled $109 million or $1.67 per share, with $92.3 million attributable to unrealized loss on digital assets.
  • Staking Yield -- Native Solana staking yield remained just below 7%, with ongoing staking revenue expected to exceed operating and interest expenses by July 1, assuming a 6%-7% yield.
  • Expense Actions -- General and administrative expenses and employee count reduced to 10, with plans to eliminate further costs and transition brand fulfillment to third-party providers by July 1.
  • Treasury Breakdown -- As of March 31, $3.5 million in cash, 2.5 million Solana tokens held (1.4 million liquid, 1 million locked), and all tokens staked.
  • Treasury Expenses -- Treasury direct expenses for the nine months ended March 31 were $8.6 million, including management, custodian, service fees, and interest.
  • Debt Reduction -- Reduced overall short-term debt by $7.6 million, including a $5.4 million reduction in short-term treasury debt.
  • Capital Allocation Strategy -- Future excess cash flows are intended for accretive share repurchases or Solana purchases to maximize Solana per share, in line with past capital decisions.
  • Yield Enhancement Efforts -- Actively exploring low-risk, recurring yield strategies beyond native staking, with a possible initial allocation of $25 million to $50 million.
  • Expense Base Goal -- Management aims for the lowest expense base among Solana treasury peers, with normalization expected once warehouse leases and legacy logistics costs expire this quarter.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

  • Unrealized Loss on Digital Assets -- Incurred an unrealized loss of $178.8 million on digital assets for the nine months ended March 31, largely due to Solana token price drops, with $92.3 million of the quarterly net loss directly attributable to these unrealized losses.
  • Crypto Market Sensitivity -- CEO Marshall stated, "like any treasury company, are heavily impacted by token prices and valuation multiples," explicitly highlighting ongoing exposure to volatile Solana and Bitcoin prices.
  • Operational Headwinds -- Temporary elevation in treasury-side expenses since the treasury's launch, with normalization dependent on legacy cost exits and interest expense reduction, may delay achieving positive net operational cash flows.

SUMMARY

Upexi (UPXI +7.19%) reported substantial sequential growth in Solana holdings alongside expanded capital initiatives, including share buybacks below NAV and an in-kind convertible note issuance. Realized and unrealized losses tied to declines in Solana price materially impacted quarterly results, underscoring ongoing balance sheet volatility. Management emphasized an accelerated expense-rightsizing effort—with headcount and third-party outsourcing—targeting July 1 for operating and interest expenses to fall below staking revenue. Current yield strategies focus on maintaining a near 7% annualized rate, with additional low-risk yield enhancement initiatives under review.

  • Chief Strategy Officer Rudick remarked that Solana's fundamentals, such as surging stablecoin transfer volume and tokenization activity, are strengthening even as prices remain highly correlated with Bitcoin.
  • Direct treasury expenses for the nine-month period included $8.6 million primarily in management fees, custodian fees, service fees, and interest; operating leverage is expected as these costs are reduced.
  • Management outlined flexibility in deploying future cash flows, prioritizing actions that maximize Solana per share through either opportunistic asset purchases or further share repurchases if discounts persist.

INDUSTRY GLOSSARY

  • NAV: Net asset value, representing the per-share value of the company's underlying assets, notably used here to assess Solana holdings against share count.
  • Staking Yield: Annualized return earned by holding and validating transactions on a blockchain (here, Solana), paid in additional tokens.
  • In-kind Convertible Note: Debt instrument issued not for cash but for other assets or services, convertible to equity at a preset valuation metric.
  • Tokenization / RWAs: The process of issuing digital tokens representing off-chain (real-world) assets to provide improved liquidity and transparency on blockchains.

Full Conference Call Transcript

Alan Marshall, Chief Executive Officer Andrew Norstrud, chief financial officer and Brian Rudick, chief strategy officer. Before we begin, I am 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 2 thousand. Actual results may differ materially 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 will 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.

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 principle 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 would now like to turn the call over to Upexi's CEO, Alan Marshall.

Allan J. Marshall: Thank you, Valter, and welcome everyone to our fiscal third quarter 26 earnings conference call. I am happy to review our quarterly results and discuss why we are particularly optimistic about the future. 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. That said, SOL has rebounded from its intra quarter low approximately 77 to current 96 and our multiple is also well off the lows and are now sitting above NAV. And are 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. And 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. 1 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. In addition to the buybacks, we remain 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 to the nose 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, but will now normalize going forward. 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 rightsized and are more closely tied to the revenue generated. All in and assuming a continued 6% to 7% staking yield, we would expect that by July 1, the ongoing cash expenses for operations and interest will be less than the treasury staking revenue.

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. 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 on a strategy that, if successful, would materially increase the total yield earned on the treasury. 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.

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 would like to turn the call over to our chief strategy officer, Brian Rudick.

Brian Benjamin Rudick: Thanks, Alan, and hello, everyone. Solana fell from our fleet a 125 per token to about 83 per token during the quarter, or 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. And Bitcoin fell materially.

Due to a myriad of reasons, including OG token holder selling, 4-year cycle fears, fallout from the October 10 deleveraging event, precious metals stealing the show, digital assets competing with alternative investment opportunities like AI, and more. Which folds Solana lower. 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 2 completely different constructs. With the former a store of value or digital gold and the latter a new type of computer and 1 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. 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. Tablecoin transfer volume on Solana totaled $2.1 trillion in the quarter, up 60% over the prior year and leading traditional companies like PayPal, Western Union, and Societe Generale 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. 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 trading volume in the first quarter. Finally, AgenTic payments, which are financial transact executed autonomously by AI agents, are another large opportunity as many experts believe that 1 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 pervasive permissionless network on which to transact. This puts Solana in the cap urgency 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. Bitcoin pulled the price of Solana lower, while the fundamentals from stable coins to tokenization, AI agents, 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. And with that, I will turn the call over to our Chief Financial Officer, Andrew J. Norstrud, for a review of our financial performance.

Andrew J. Norstrud: Thank you, Brian. As of March 31, the company had approximately $3.5 million in cash, 2.5 million Solana tokens, 1.4 million liquid, and the remaining 1 million tokens locked. During the quarter ended March 31, 2026, Staking generated approximately 35 thousand 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 and administrative expenses compared to the second quarter ended December 31, 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 March 31, 2026, company had digital asset revenue of $14.7 million or approximately 100 thousand tokens. Our tokens earned from staking has increased quarterly and we expect the trend to continue. The direct treasury expenses for the 9 months ended March 31, 2026 were approximately $8.6 million which includes management fees, custodian fees, service fees, and interest.

For the 9 months ended March 31, 2026, the treasury had an unrealized loss on digital assets of $178.8 million. Reflective of the Solana price per liquid token of $83.11 and $71.47 per locked token. As of March 31, 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 return for shareholders and had substantially all tokens staked at March 31, 2026. For the fiscal third quarter, total revenue was $4.6 million compared to $3.2 million in the prior year quarter. For the 9 months period ended March 31, 2026, total revenue was approximately $221.8 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 quarter was approximately $109 million or $1.67 per share. $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 189 thousand equating to a 9% increase or 35% annualized. 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. Operationally, we will continue to align our expenses with that strategy. And now I turn the call back over to Alan for concluding remarks.

Allan J. 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 advantage 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 4 items that differentiate Upexi, from peers. First, we have a differentiated management team. 1 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. Third, we have and will continue to lead innovation and have done several firsts in the industry on the capital market side. 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 a full 32 percentage points more than investors would have gotten by simply staking Solana natively themselves. With that, I will turn it over to the operator for questions.

Operator: Thank you. And that is *1 to ask a question. And we will go first to Brian Kinstlinger with Alliance Global Partners.

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

Allan J. Marshall: Andrew, you want to take that part?

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

Brian Kinstlinger: Got it. Great. Thank you. And then Go on.

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 is just below 7% for the native staking that we are doing.

Brian Kinstlinger: 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?

Allan J. Marshall: Thanks, Brian. Right now, we are just exploring options on ways where we could increase the overall return on our capital. So you know, the way we look at it is for the stake tokens, it is 7%, and for the lock tokens, it is closer to, you know, double that or just less than double that. So anything we do would have to would have to keep in mind that, you know, the barrier for us to do something would have to be beyond those fields. Looked at multiple things, but, obviously, with just the overall market conditions right now, kind of waiting to see what options come, you know, come become available.

This is this is just a it is just an expansion of the way we were thinking before. So before I think strictly, you know, buy as much lawn as we poss and stake it. We are we are still thinking that, but we are 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 sort of leverage debt or and to do that, it would have to surpass the income we would get from with a lot of tokens.

Brian Kinstlinger: Great. I have got 1 follow-up. You know, when I look at the balance sheet and the Q, the Q says on the first page, you get $70 million-plus shares. You have got $238 million of debt. And so you know, that is 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 have got an EV to NAV of 1.5x? You guys are talking about having a below 1x.

Allan J. Marshall: Brian, do you wanna Brian or Andy I am not sure appropriate.

Andrew J. Norstrud: I am not sure on that statement. Favor, and-- Do it-- Yeah.

Brian Benjamin Rudick: Appreciate the question. Yeah. We put out our investor deck in the appendix We have 2 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. But if those do convert, then all that soul 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.

And that would that is what gets you to a roughly 1x MNAV The other 1, which I think you are referencing, is assuming there is no conversion, we have to get back some of that sole we also do not have to issue those additional shares, and that is where we are way above NAV. My personal view is that there is probably a blend of the 2 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 NAV.

Brian Kinstlinger: Okay. Thanks so much, guys.

Operator: We will take our next question from Gareth Taylor with Cantor Fitzgerald.

Analyst (Gareth): 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 the July 1 milestone. And then maybe once you get there, from that base, is the yield strategy Will that kinda provide some operating leverage on top of kind of where you think it will sit today?

Allan J. Marshall: Sure. I can open it up, then Andy can get into any details. So the way we are we are looking at it is we have reduced the head count We have outsourced all of the brand businesses. So they all run you know, at a cost basis where we so we can manage it much more easily and competitively. And then I think the couple things we have to do, 1 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.

And then any increase we are thinking about it is any increase in the price of Solana, 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.

Andrew J. Norstrud: Yeah. So just real quick. I mean, we have some expenses like warehouse leases and everything else that will come will be expiring. We will be out of them this quarter, so that is kind of what the July 1 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. Now it will become everything will be measured on profitability through the inputs. 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 thousand-plus per month.

Of interest that we are gonna be looking at a couple different ways to reduce that significantly in the next 3 months, which will reduce the overall operating expenses in that treasury significantly. That right now, even without that, that is where we can just about breakeven plus or minus a little bit based on the price of SOL. But as we start taking care of those in the next 2 months, that will get us well over that. And, yes, there will be excess cash from those revenue stakings as we are projecting it right now. If everything goes as planned.

Analyst (Gareth): Gotcha. that is really helpful. And maybe I know it is 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?

Allan J. Marshall: Would you maybe buy more Solana, locked Solana or think about repurchases? We would look at all of them, like, during the quarter, we yeah. Or we re repurchase shares because they are at point 8 or even less of NAV. We had the excess cash. So yeah. Mean, any excess cash we have come in will go into building the treasury because I mean, that is SOL per share, whether it be repurchasing shares or buying more SOL. Okay. Awesome. And then maybe last 1.

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?

Andrew J. Norstrud: Yeah. We have been looking at the 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 an initial small initial amount into that, like $25 million or $50 million and then work on that yield if we could get high enough. And once we do refinance the debt, we will have more availability to put more into a strategy like that should the yield, you know, generate the way we think it is going to. And we are we are doing all of this off So we are we are trying not to do anything on chain.

We are using more traditional know, Wall Street instruments.

Analyst (Gareth): Totally. that is really helpful. Thank you, guys.

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

Allan J. Marshall: I just want to thank everybody for joining call today. We really appreciate the support. Thanks for the great questions. And we look forward to updating everyone on the year end. Have a great evening.

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