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DATE

Thursday, May 14, 2026 at 5 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Pyahm Samani
  • Chief Investment Officer — Ryan Navi
  • Chief Financial Officer — Brazier Christopher
  • General Counsel — Georgia Quinn

TAKEAWAYS

  • Revenue -- $13.0 million, rising more than 4x year over year, driven primarily by Solana staking revenue.
  • Gross Margin -- 70.0%, up from negative 5.7% in the prior year, reflecting higher yield generation from the Solana treasury strategy.
  • Selling, General, and Administrative Expenses (SG&A) -- $6.6 million, down from $7.2 million sequentially, attributable to cost reduction initiatives launched in March.
  • Net Loss -- $283.1 million, including $201.7 million in digital asset losses and $85.1 million in impairment, compared to a $585.7 million loss in the prior quarter.
  • Share Repurchase -- 6.2 million shares repurchased in March at $4.44 per share, reducing basic shares outstanding by 7.4% and fully diluted shares by 5.5%.
  • Institutional Debt Facility -- $40.0 million drawn from Galaxy Digital at a 3.4% weighted average interest rate and 5-month weighted average maturity; approximately 40% is evergreen and automatically renews.
  • SOL Holdings -- Over 7 million held as of March 31, with cumulative staking rewards exceeding 200,000 since September 2025; native staking yields range from 6.5%-7.2%.
  • fwdSOL Utilization -- 25.1% of total SOL represented by proprietary liquid staking token, used as collateral and earning native staking yield.
  • SOL per Share Growth -- Annualized growth rate of 29.1% fully diluted and over 44% in-the-money, driven primarily by buybacks.
  • Cash Position -- $16.6 million as of March 31, down from $25.4 million sequentially, reflecting share repurchases.
  • OnRe Investment -- Participated in $5 million Series A and deployed $16 million into ONyc, providing USD-denominated noncorrelated revenue, with ONyc trailing yield near 10% and a potential upper bound in the mid-teens.
  • Tokenized Shares -- Over 6.9 million FWDI shares now tokenized on Solana, with 91% utilization in the communal pool supporting on-chain loans.
  • Forward Validator -- Over 6.9 million SOL staked, ranking eighth in Solana network by weight.
  • Operational Efficiencies -- Targeted quarterly SG&A run rate set at $4.8 million (excluding stock-based comp), down from $7.2 million in Q1, due to renegotiated contracts, reduced legal and vendor costs, and a leaner operating structure.

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RISKS

  • Brazier Christopher stated that a $201.7 million loss on digital assets and $85.1 million impairment contributed to the $283.1 million net loss, "primarily driven by the decline in the price of SOL."
  • "SG&A will still remain subject to certain variable costs, most notably the asset management fee we pay Galaxy, which is tied to a percentage of our AUM," introducing SG&A cost variability.

SUMMARY

Forward Industries (FWDI 12.43%) reported a quadrupling of revenue and a sharp improvement in gross margin, largely attributed to Solana treasury activities. Strategic moves included drawing $40 million in low-cost debt from Galaxy Digital, which supported both major share repurchases and investments in Solana-native projects. The deployment of capital into the OnRe protocol and aggressive cost reductions are delivering new USD-denominated income streams and boosting SOL per share growth. Regulatory developments were detailed as supportive of the company's core business model, and company management emphasized active capital allocation based on relative value and risk-adjusted accretion. Liquidity remains robust despite a sequential cash decline, with share repurchases and digital asset losses being primary drivers.

  • OneRe's ONyc token increased public float to $175 million following Forward's involvement, indicating early traction in Solana-native reinsurance.
  • Approximately 40% of the Galaxy facility is evergreen, providing recurring capital without immediate refinancing requirements.
  • Forward's strategic focus remains on improving SOL per share through opportunistic buybacks, selective SOL accumulation, and real-world asset investments using proprietary staking collateral.
  • Regulatory interpretations now frame Solana as a digital commodity, not a security, with Forward's protocol staking activities outside securities classification under current interpretive guidance.
  • Cost-reduction measures, such as the June-end services agreement with Galaxy, are expected to create further durable SG&A savings, while the asset management agreement with Galaxy continues as a variable cost.

INDUSTRY GLOSSARY

  • MNAV: Market net asset value per share, calculated using mark-to-market value of digital assets, net of debt and diluted share count.
  • fwdSOL: Forward Industries' proprietary liquid staking token representing staked SOL, earning native yield and available for use as collateral.
  • ONyc: Yield-bearing token from OneRe, a Solana-native reinsurance protocol, providing USD-denominated yield streams.
  • Tokenized RWA: Real-world assets represented as digital tokens on a blockchain, enabling on-chain trading, settlement, and yield generation.

Full Conference Call Transcript

Pyahm Samani: Thank you, Georgia, and good afternoon, everyone. Our second fiscal quarter was defined by disciplined execution. Against the backdrop of continued market volatility, we took decisive steps to strengthen Forward's capital foundation, improve our cost structure and deepen our engagement across the Solana ecosystem. In March, we completed a strategic share repurchase that reduced our common shares outstanding by 7.4%, accessing $40 million of institutional debt from Galaxy Digital on highly advantageous terms and implemented a cost reduction initiative that has yielded material operating expense savings through disciplined cost management.

Together, these actions reflect the long-term mindset that we bring to managing Forward: disciplined capital allocation, compounding SOL per share, which is currently above 44% on an annualized basis -- on an annualized in-the-money basis, and positioning the business to grow and diversify alongside the Solana ecosystem. These 2 themes, our continued conviction in the Solana ecosystem, particularly its accelerating momentum across stablecoins, payments and real-world assets, and the opportunities we see to deepen Forward's engagement with the Solana ecosystem to grow and diversify our revenue are where I want to focus our time today. Starting with the network. Solana's transition from promising technology to real financial infrastructure has accelerated meaningfully in recent months.

For stablecoins and payments, Solana is emerging as the default settlement layer for dollar-denominated value on chain. According to a Messari report published in early March, total payment volume on Solana grew more than 8x year-over-year, which is nearly 3x the median growth rate of comparable fintech and blockchain platforms. The Solana Foundation's launch of Payments.org in late February and the Solana developer platform in March, which brings together Mastercard, Worldpay, Western Union and other global payments partners has consolidated what had been a fragmented set of partnerships into a single institutional-grade payment stack.

Western Union is expected to go live with its U.S. dollar payment token, USDPT on Solana in the first half of this year, connecting on-chain dollar transfers to Western Union's network of more than 360,000 physical cash locations worldwide. On real-world assets, in January, Ondo Finance launched over 200 tokenized U.S. stocks and ETFs on Solana, joining an ecosystem where tokenized equities had already processed over $3 billion in transaction volume. Forward was amongst the first public companies to put its SEC-registered shares on chain through Superstate, and we view the rapid expansion of tokenized equities on Solana as further validation of the thesis that Solana is becoming the settlement layer for capital markets.

In March, the SEC approved NASDAQ's proposal to trade tokenized securities alongside their traditional counterparts on the same order book, covering Russell 1000 stocks and major ETFs. As a NASDAQ-listed company that already has its shares tokenized on Solana, we view this as a powerful convergence. The infrastructure that Forward helped pioneer is now being adopted by the exchanges themselves. On the infrastructure side, the rollout of Firedancer, Jump Crypto's independent validated client for Solana, represents a landmark moment for the network's decentralization and resilience. Firedancer's testnet results showed throughput exceeding 1 million transactions per second, and the client is now phased -- and now phased in mainnet deployment.

This is exactly the kind of foundational infrastructure maturation that institutional participants need to see before committing capital at scale. At the network level, Solana continues to lead across the metrics that matter: decentralized exchange volume, real economic value generated, active users and developer engagement. These fundamentals reinforce our view that it is not just another blockchain; it is the execution layer for what we often call the Internet capital markets. Before we move on to Forward's strategic initiatives, I want to address a topic that's gotten a lot of attention lately: the security incidents involving Drift Protocol on Solana and more broadly, the other exploits we've seen as a crypto industry across a number of other networks.

The key point here is that the incident involving Drift was a social engineering attack, not an explicit exploit of the Solana protocol or contract code itself. That actor is targeted with privileged access through reception, not through any underlying vulnerability in the network. To be clear, Solana's core Layer 1 network has not experienced a consensus level breach. The base protocol has continued to operate with full uptime, strong validated decentralization and no cryptographic vulnerabilities. Think of it this way. A breach at a company running on AWS does not mean AWS is broken. The same logic applies here. If anything, these incidents reinforce how seriously we take operational security in managing our own holdings.

As the Solana ecosystem continues to accelerate, so do the opportunity for Forward to leverage protocols in the network to drive revenue growth. As such, priorities for 2026 are focused on 2 initiatives: First, deepening our engagement with the Solana ecosystem in ways that grow and diversify our revenue; and second, using our strengthened balance sheet to lower cost structure and accelerate SOL per share growth. On the ecosystem engagement front, we've made meaningful progress on initiatives we've discussed previously. First, tokenized FWDI. Forward remains one of the only public companies with SEC-registered shares that live on a public blockchain through Superstate's Opening Bell platform.

There are currently more than 6.9 million shares of FWDI tokenized on Solana and the communal pool where FWDI can be utilized as collateral for on-chain loans is approximately at 91% utilization. The next initiative I'd like to talk about is our Forward Validator and fwdSOL. Today, over 6.9 million SOL are staked to Forward Validator and it is the eighth largest validator in the Solana network by stake weight. Our proprietary liquid staking token, fwdSOL, has become a cornerstone of our capital market strategy. It is collateral supporting our $40 million institutional debt facility with Galaxy, which Ryan will discuss more in detail.

On the revenue front, I want to highlight Forward Industries' minority investment in deployment of capital in OneRe, a Solana-native reinsurance protocol that is building infrastructure to bring the traditional risk transfer markets on chain. Since launch, OneRe has attracted meaningful liquidity, onboarded its first reinsurance counterparties and built a real reputation as one of the more interesting DeFi-native risk protocols on Solana. What's compelling here is that Forward participates in OnRe, both as an investor and as a participant in the OnRe protocol by purchasing ONyc tokens. So we have direct upside as the protocol grows and generates fee revenue. That also adds USD-denominated noncorrelated revenue for Forward, which helps diversify our revenue base beyond SOL.

Each of these initiatives is designed to accomplish the same thing: turn Forward from a passive treasury holder into an active participant in the Solana economy, generating yields above the native staking rate, expanding our surface area on chain and creating durable sources of revenue beyond staking alone. With that, I'd like to turn the call over to Ryan Navi, Forward's Chief Investment Officer, to further discuss our strategic initiatives and treasury performance during the quarter. Ryan?

Ryan Navi: Thank you, Kyle, and good afternoon, everyone. Since stepping into the CIO role in December, I focused on building out a comprehensive plan to drive meaningful SOL per share growth, lower our cost of capital and position Forward as the Berkshire Hathaway of Solana in the long term. Today, I'd like to walk through our progress on all 3, starting with treasury performance, moving through our capital structure actions during the quarter and closing with how we're positioning Forward for the future. As of March 31, 2026, Forward held a little over $7 million Solana with nearly all of our holdings generating native staking yields between 6.5% and 7.2%.

Cumulative staking rewards since our inception in September 2025 have now exceeded 200,000 Solana. 25.1% of our Solana is now represented as fwdSOL, our proprietary liquid staking token developed with Sanctum. fwdSOL is what allows us to continue earning native staking yield while simultaneously using our holdings productively as collateral, and it is the foundation of the institutional debt facility I'll discuss in more detail later. Turning to SOL per share. We continue to compound our fully diluted SOL per share from 0.0604 in September 2025 to 0.0624 as of December 31, 2025, and to 0.0669 as of March 31, 2026.

That reflects annualized SOL per share growth of 29.1% on a fully diluted basis since the launch of our treasury strategy. On an in-the-money share basis, our annualized SOL per share growth exceeds 44%. Our fully diluted share count as of March 31, 2026, was 105,231,015 shares, comprised of 76,314,617 common shares net of treasury, 25,759,600 warrants, 1,599,066 options and 1,557,732 unvested, restricted and performance stock units. The reduction in common shares outstanding from 84.9 million to 76.3 million reflects our March repurchase of 6.2 million shares and our ongoing share repurchase program, which reduced our basic shares outstanding by 10.1%.

As of March 31, 2026, Forward's MNAV was 0.827, calculated using the closing price of Solana on March 31 of $83.12, total SOL holdings of 7,044,079, plus our cash balance less debt towards closing price of $4.43 and a fully diluted share count of 105,231,015 shares. The most consequential actions during the quarter were in our capital structure. In March, we completed 2 highly strategic transactions that, taken together, represent the disciplined capital allocation we believe is required to deliver long-term value to our shareholders.

This, in turn, gave us the balance sheet strength to capitalize on opportunities like our investment and deployment into OnRe, which provides Forward with upside as the tokenized RWA ecosystem on Solana grows and adds a USD-denominated revenue stream for the company. First, we entered into a Master Digital Currency Loan Agreement with our long-standing partner, Galaxy Digital, and drew on an initial $40 million facility collateralized by fwdSOL with a weighted average interest rate of 3.4% and a weighted average maturity of 5 months. I really want to underscore how compelling these terms are.

At a 3.4% weighted average interest rate, this facility represents access to capital at a cost that is, in our view, not only highly advantageous, relative to what is available to most companies in our sector, but also most publicly traded small- to medium-sized market cap companies. Our extremely attractive cost of capital is the direct product of the strength of both our balance sheet and our team's approach to risk management. Given the recent drawdown of Solana in conjunction with our shares trading at a discount to NAV, we made the conscious decision to lower our cost of capital via nondilutive financing, meaning that we're able to access liquidity without issuing equity or selling our SOL holdings.

It's also important to note that approximately 40% of this facility is evergreen in nature, which means it automatically renews and does not require active refinancing. This provides us with a stable recurring capital base and means the effective refinancing burden on the remaining portfolio is both manageable and well within our liquidity planning horizon. Second, on March 19, we announced the deployment of $27.4 million of that $40 million credit facility to repurchase 6.2 million shares of our common stock at $4.44 per share.

This transaction reduced our basic shares outstanding by 7.4% and our fully diluted shares outstanding by 5.5%, which drove an immediately compelling SOL per share accretion of 8.0% on a common share basis and 5.8% on a fully diluted basis. Third, on May 5, we announced our investment and deployment into OnRe. Alongside RockawayX, the global multi-strat digital asset investment firm, Forward co-led OnRe's $5 million Series A at a $25 million post-money valuation and has begun deploying capital into ONyc, OnRe's yield-bearing token on Solana. ONyc provides Forward with real-world cash flows that are both complementary and uncorrelated to Solana.

By gaining exposure to reinsurance through a tokenized on-chain structure, we're unlocking a new layer of durable dollar-denominated income while remaining fully aligned with the Solana ecosystem. Together, the series of transactions gives us 3 things: dramatic SOL per share growth, a robust balance sheet to continue operating and investing in the business and most importantly, an enhanced capital structure that lowers our cost of capital, which unlocks a wider opportunity set to pursue strategic transactions beginning with OnRe that will deliver greater SOL per share growth and value to shareholders over the course of 2026. Looking ahead, we will continue to focus on driving efficiencies across the business while executing on 3 strategic priorities.

First, continuing to leverage our advantageous access to capital through the Galaxy facility and new potential relationships to further optimize our capital structure and lower our cost of capital, which will further accelerate our ability to compound SOL per share. Second, identifying and executing on select opportunities that accelerate our SOL per share growth above the baseline native Solana staking rate while also pushing the Solana ecosystem forward as a whole. This includes evaluating M&A, strategic investments, structured transactions and scaling our on-chain operating initiatives. OnRe is a good example of this. It's a Solana-native reinsurance protocol that's grown quickly and already showing real traction.

Forward is in as both an investor and a liquidity provider, but we have direct upside as OnRe scales, and we're generating USD-denominated revenue in the process. Third, positioning Forward to not only provide sustainable best-in-class SOL per share growth, but also to continue to grow the absolute scale of our treasury. We believe the foundation we've built, coupled with our leading scale, robust balance sheet, improved cost structure and deep partnerships with Galaxy, Jump and others will enable us to execute on our 2026 growth and profitability objectives on our way to building the Berkshire Hathaway of Solana.

I'll now welcome and pass the call over to our newly appointed Chief Financial Officer, Mark Brazier, to walk you through our GAAP financial results and the cost reduction plan. Mark?

Brazier Christopher: Thank you, Ryan, and good afternoon, everyone. I'm very pleased to address you all for the first time as Forward's new Chief Financial Officer. As many of you may be aware, I joined Forward approximately a month ago on April 13, succeeding Kathy Weisberg, who continues to serve the company as Director of Financial Reporting. I would like to take a moment to thank Kathy for her leadership during a truly transformational period for Forward and for the strong expertise and partnership she continues to offer.

By way of introduction, I bring with me more than 25 years of experience across both digital assets and traditional finance, most recently as Chief Financial Officer and Head of Regulatory at XBTO Global and previously as Chief Financial Officer at Stablehouse. I'm excited to join the team at such a pivotal moment in the company's history and in particular, to help execute against the cost discipline and capital structure priorities Ryan just outlined. Now I'd like to turn to our financial results for the second quarter of fiscal year 2026. As a reminder, all comparisons and variance commentary refer to the second quarter of fiscal year 2025 unless otherwise specified.

Revenue in the second quarter of fiscal year 2026 increased more than 4x to $13.0 million compared to $3.1 million in the prior year period. Gross margin expanded materially to 70.0% in the second quarter of fiscal year 2026 compared to negative 5.7% in the second quarter of fiscal year 2025. These increases were primarily driven by staking revenue generated through Forward's Solana treasury strategy. Selling, general and administrative expenses during the second quarter of fiscal year 2026 was $6.6 million compared to $7.2 million in the first quarter of fiscal year 2026, an early but meaningful indication that the cost reduction plan we announced in March is beginning to take effect.

Year-over-year increase of $5.0 million was primarily driven by higher operational costs associated with Forward's transition to its Solana treasury strategy. As of March 31, 2026, our cash position was $16.6 million compared to $25.4 million as of December 31, 2025. The sequential decrease primarily reflects the use of $47.1 million to repurchase 9,214,655 shares during the quarter. Institutional debt outstanding as of March 31, 2026, was $40.0 million at a weighted average interest rate of 3.4% and a weighted average maturity of 5 months. With regards to the cost reduction plan, we are continuing to implement measures to reduce our SG&A spend.

Our targeted quarterly SG&A run rate, excluding stock-based compensation, is approximately $4.8 million, down from $7.2 million in Q1 and $5.8 million in Q2. The primary drivers of that reduction are renegotiated fees under our services agreement with Galaxy Digital, lower outside legal and marketing spend, reduced third-party vendor costs and broader operational efficiencies, all part of the SG&A reduction initiative that we commenced at the end of 2025. That said, our SG&A will still remain subject to certain variable costs, most notably the asset management fee we pay Galaxy, which is tied to a percentage of our AUM. We remain committed to evaluating our cost structure on an ongoing basis and identifying additional efficiencies throughout the year.

I'd also like to reiterate the current GAAP accounting treatment for our SOL holdings. Current accounting standards for digital assets require changes in the fair value of SOL and Forward SOL to be recorded as components of operating income or loss. These fluctuations do not impact our cash balance, yield generation or our ability to continue compounding SOL per share. This accounting distinction is essential in evaluating our financial performance, which is driven by strategy execution, not short-term market volatility.

As a result of this treatment, in the second quarter of fiscal year 2026, Forward recognized a loss on digital assets of approximately $201.7 million and an impairment charge of approximately $85.1 million related to our Forward SOL holdings, leading to a net loss of $283.1 million compared to a net loss of $585.7 million in the prior quarter and $1.5 million in the second quarter of fiscal year 2025. Again, this loss was primarily driven by the decline in the price of SOL and therefore, the fair value of our SOL holdings. I will now pass the call back to our General Counsel, Georgia Quinn, to cover regulatory updates.

Georgia Quinn: Thank you, and welcome, Mark. I'd like to briefly address several regulatory developments that occurred during the quarter because they are directly relevant to how investors should evaluate Forward and our strategy. The first calendar quarter of 2026 was one of the most consequential quarters for U.S. digital asset regulation ever. I'll touch on 3 developments in particular. First, on March 11, the SEC and CFTC executed a memorandum of understanding, establishing a formal framework for coordination on matters of shared regulatory concern.

The MOU committed both agencies to streamline regulatory reporting, coordinated examinations and harmonized oversight, and it laid the procedural groundwork for the joint guidance that followed and creates the necessary foundation from which to begin joint rule-making once the clarity or its progeny legislation is passed. Second, on March 17, the SEC issued a commission-level interpretive release titled Application of the Federal Securities Laws to Certain Types of Crypto Assets, with the CFTC joining and confirming it will administer the Commodity Exchange Act consistent with the SEC's interpretation. The release establishes a 5-category taxonomy for digital assets and clarifies the application of federal securities laws to airdrops, protocol mining, protocol staking, among other activities.

We believe 2 elements of this guidance are particularly important for Forward and our shareholders. First, the interpretive release is consistent with our view that Solana, the digital asset at the core of our treasury, is a digital commodity rather than a security. It is also consistent with the view that protocol-staking activities of the type conducted through our validator infrastructure are not, in and among themselves, securities transactions. We want to be clear that this guidance is interpreted in nature and does not carry the weight of statutory law, but it represents a meaningful step towards the regulatory clarity that has long been needed in our industry.

Third, the Digital Asset Market Clarity Act, which passed the House in July 2025, remains under consideration in the Senate. The Clarity Act would, if enacted, codify a comprehensive market structure framework allocating jurisdiction between the SEC and the CFTC for digital asset markets. While the legislative process is ongoing, and we cannot predict the timing or final form of any legislation, we are encouraged by continued bipartisan engagement on this bill, the MOU previously noted, and we believe that the statutory clarity will further reinforce the foundation on which our strategy is built.

Although not during our reporting period, on April 13, the SEC staff also issued guidance that, pursuant to certain guidelines, the providers of user interfaces to crypto services, both centralized and decentralized, may receive transaction-related compensation without being subject to broker-dealer registration. This provides comfort to developers trying to bridge traditional finance and digital assets by creating user-friendly and educational experiences, enabling users to access on-chain finance. I'll add one final note. None of what I've just described changes our underlying strategy, our compliance posture or our disclosure obligations.

While we are pleased to see the continued progress toward regulatory clarity and the motivation of lawmakers and regulators to engage with the industry, we have built Forward to operate a public company standard of governance and transparency regardless of the regulatory environment, and we will continue to do so. This concludes our prepared remarks. Before I pass it back to the operator to open up the call for live Q&A, we'd first like to address a few of the questions that have come in via e-mail over the past few weeks.

Georgia Quinn: Ryan, to start, can you please share more about the OnRe transaction? Specifically, how was the transaction financed? Can you explain the deployment into the ONyc tokens? And how much was deployed? Can you share any color on the yield Forward is earning, relative to the cost of capital for the deployment?

Ryan Navi: Yes, sure. So the OnRe deal has 2 parts. First, Forward completed a minority investment into OnRe's $5 million Series A, which we co-led with RockawayX. Second, we deployed $16 million into ONyc, OnRe's yield-bearing token on Solana. For reference, ONyc provides us non-correlated U.S. dollar-denominated revenue tied to reinsurance. The cash for both investments was funded from $40 million in new evergreen loans with an interest rate of 2%. So if ONyc yields, let's say, 12%, we pick up 10 points of net spread with assets and liabilities well matched. With respect to the expected yield on ONyc, the trailing yield has been roughly 10%, and we think the upper bound is probably in the mid-teens.

So for modeling purposes, something around 12% plus or minus, we believe, would be appropriate. And in terms of the overall deal rationale, importantly, we have equity upside in OnRe as it scales, while we are also simultaneously diversifying our revenue at an attractive net yield, which should make both our business and capital structure more durable over time. And for those who are interested, you can refer to our Q for further detail.

Georgia Quinn: Okay. Thanks for that, Ryan. And next question is also for you. You mentioned strategic transactions that accelerate SOL per share growth. Can you share your framework for evaluating those opportunities, including potential M&A? And how do you think about balancing accretion versus flexibility?

Ryan Navi: Yes, this is a great question. So we evaluate each investment opportunity on a relative value risk-adjusted basis. So depending on the market environment, we may prioritize buying more SOL, buying our stock, minority investments or M&A. On the SOL side, if our MNAV remains dislocated, we will likely continue buying our stock. If our MNAV is closer to 1, we'll be more focused on scaling SOL and potential debt M&A. For non-debt M&A and minority investments, we are looking for opportunities to deploy our balance sheet in high-quality real-world assets on Solana that are above the native SOL staking yield, as Kyle mentioned in the prepared remarks.

Additionally, we want to ensure we get equity upside as we use our balance sheet to create our own catalysts and looking to produce win-win outcomes for Forward. OnRe and ONyc are great examples of this. On the accretion versus flexibility part of the question, we've done a great job preserving flexibility to play offense. And now in this dislocated environment, we can take full advantage, which is evidenced by our annualized 44% SOL per in-the-money share accretion this quarter. Even though we are now starting to take on some debt, we are still lowly levered, roughly in the low teens on a percentage basis and retain significant financial flexibility. So spot and MNAV remain extremely dislocated.

We will continue to be on the offensive while mitigating less tail risk.

Georgia Quinn: Okay. Thank you. So this question is for the team. Could the team speak to the strategic logic behind the March transactions? Specifically, what led the team to prioritize a share repurchase at this moment? And how should investors think about the interplay between the Galaxy facility, the buyback and the cost reduction plan?

Ryan Navi: So I'll take the piece on the debt facility and the buyback, and then Mark, maybe you can handle the cost reduction plan. So on the first 2 pieces, given we're SOL and our stock is trading, we decided to pursue non-dilutive financing, and we structured this master loan agreement with Galaxy, which we believe is very attractive for Forward. We will continue to use this as a tool to actively lower our cost of capital, which we believe will further accelerate our compounding of SOL per share. The March share buyback was a direct result of the dislocation of our MNAV at the time of the repurchase.

And given stock prices of SOL, we decided to repurchase the stock using the Galaxy facility without selling any of our SOL holdings while still keeping all of our stake in yield. Mark, over to you on the cost reduction.

Brazier Christopher: Yes. Thanks, Ryan. So on the $2.4 million reduction from our $7.2 million in Q1 to our run rate quarterly target of $4.8 million, it's really driven by several sort of distinct and largely permanent changes to our cost structure. As I mentioned earlier, the largest driver to this is renegotiated services agreement with Galaxy, which significantly reduced the fees we paid for their accounting and operational support. We've also materially reduced outside legal and marketing spend, and we've rightsized our third-party vendor and technology costs, and we've implemented a leaner organizational structure overall, I suppose. We do believe the new targeted run rate is both durable and sustainable.

But having said that, it is important to note that we do have some variable cost elements to our OpEx, primarily the asset management fee that we pay to Galaxy that is tied to a percentage of our AUM. It's probably also important to note that the cost reduction initiatives that we put in place are structural reductions, not onetime cuts or deferrals. Currently, we have no major reinvestment requirements that would cause these costs to increase on a go-forward basis. And in fact, as our revenue grows with our stake in yield revenue, particularly, we expect operating leverage to improve further, meaning the absolute cost base would hold steady even as our top line expands.

So I suppose it's important to reiterate, we will not cut costs where it matters strategically, but we are committed to running a lean, disciplined and fiscally conservative operation that compounds value for shareholders. And I believe the target run rate that we've forecast reflects that philosophy and practice.

Georgia Quinn: Okay. Thanks, guys. And Ryan, this last one is for you. Given the current discount to NAV, how should shareholders think about future capital allocation between share repurchases, SOL accumulation and strategic deployment on chain?

Ryan Navi: Yes. So for stock for SOL purchases, we're always looking for ways to drive greater SOL per share, and that's on a risk-adjusted basis. Future capital deployment is highly market environment-dependent. But at a high level, we will continue to capitalize on major dislocations of our stock via those share repurchases. But as our MNAV normalizes, we do expect to focus more of our attention back to SOL accumulation. So it is worth noting, we do not view the stock buyback and SOL accumulation as mutually exclusive. As for strategic deployment on chain, not all DeFi is created equal, and we're selective about deployment on chain.

We believe in using on-chain rails for superior cost and time performance, but also carefully consider various risks, namely smart contract risk. Notably, tokenized real-world assets pose an interesting opportunity set for us. Unlike truly decentralized digital assets, tokenized RWAs carry an important structural protection. In the event of a smart contract exploit, an issuer can remedy the situation through a burn and remit process. That's a meaningful distinction in our opinion that reduces the risk profile. Tokens like ONyc have a durable option yield source and provide noncorrelated U.S. dollar-denominated yield, which we believe will be a big growth vector for both us and the Solana ecosystem as a whole.

Georgia Quinn: Okay. Thank you. That concludes our pre-submitted questions. Now I'd like to pass it over to the operator to open up the call for live Q&A.

Operator: [Operator Instructions] Our first question today is coming from Fedor Shabalin from B. Riley Securities.

Fedor Shabalin: My first question is about Solana accumulation -- tuck-in accumulation. You emphasized SOL per share accretion as a North Star metric. But can you walk us through your current framework for incremental SOL acquisition beyond taking rewards? I know you already touched on buybacks partially, but I just want to figure out the trajectory going forward in the near term.

Ryan Navi: Sure. So in general, again, if our MNAV is significantly below 1x, we do view the buyback as a relatively low risk-adjusted way for us to drive meaningful SOL per share accretion. I think there are also novel ways for us to start accumulating Solana through the use of derivatives, other mechanisms as well, potentially buying [ lock-SOL ] at a discount, all of which we're always exploring. I think the ONyc token is also an interesting example to kind of give you the framework.

If we can get our overall dollar-denominated revenue base sufficiently high to offset all of our cash costs, inclusive of interest expense, personnel, et cetera, then we actually have a very strong resilient base for us to further compound SOL per share, agnostic of SOL price. So I kind of think about that as like the baseline layer, which OnRe and ONyc is the first step in that direction. But I think the rest in terms of SOL versus the stock buyback, it's always going to be a relative value equation. Again, it's not mutually exclusive between one or the other. And candidly, the stock repurchase obviously has some limitations in terms of our percent of daily trading volume.

So as we start to exit this bear market, most likely entering into a new bull market in the coming quarters, we will likely look to SOL accumulation as the main instrument to express that view. I'm not sure if I totally answered your question, feel free to follow up.

Fedor Shabalin: No, that's clear. And a quick follow-up on -- so quarter-to-date, Solana is up. And the question is, has the high collateral value on fwdSOL -- has it created any incremental capacity under the Galaxy facility? And are there any conditions under which you would expand the draw?

Ryan Navi: Yes. So there are definitely provisions in there, without giving specific metrics, that may or may not be publicly available, where if the value of the collateral gets sufficiently high, we have the ability to take some collateral back to maintain specific LTV ratios. With that said, yes, it does increase our borrowing capacity, full stop, on a dollar basis. And we would look to utilize based on the opportunity set that is presented to us. But yes, long-winded answer is saying, as Solana price goes up, our borrowing capacity increases commensurately. And again, we're actively working on optimizing our weighted average cost of capital.

And just given where Solana is and where our stock is, we still think nondilutive forms of financing, especially at this interest rate at 2% plus, make a ton of sense for us. I think once Solana and our stock and NAV recovers, we'd look to do more of the traditional convertible debt. Convertible debt potentially press down-the-road issuances. But at this current time, you are correct. This is our main tool.

Operator: Our next question today is coming from Devin Ryan from Citizens Bank.

Neo Eloff: This is Neo Eloff on for Devin Ryan. My first question is on agentic AI in the blockchain space and how this will ramp up activity. I guess I would love to hear your guys' thoughts on the topic and how you expect this to evolve in kind of the coming months, whether through trading, payments or lending. And then if you could touch on how you think SOL is well positioned here maybe relative to some of the other blockchains?

Pyahm Samani: Yes. Kyle here. Happy to chime in on this one. So I think the first part of the question is kind of just like broadly, how do we think about agentic payments? And then secondly, kind of how Solana is positioned for that. So let's touch on the first part first here. The opportunity for agents is like, I think, quite exciting, more in the domain of payments than trading, not to say that it's bad for trading, but like there's already obviously lots of programmatic trading in the world, right? Market makers, HFT, all that stuff. Today, all of that stuff lives on Solana in a pretty real way.

The Solana blockchain today is the most liquid and highest volume place you can trade, for example, the SOL-USD pair as well as now Bitcoin and [ Eth ] are now actually more liquid on Solana blockchain than they are in, for example, Binance or Coinbase. That only happened as of the last few weeks. The reason that's happening is because of kind of this new innovation called Prop AMMs that basically allow market makers to quote tighter in more interesting ways. The agentic part of all of that is actually going to be a little bit upstream, which is basically you can now use AI agents to actually build these Prop AMMs.

And I can actually say I'm doing that from firsthand experience. It's actually publicly documented on Twitter that I am now running a Pop AMM on chain. And I've been doing that. What's really cool is I'm not -- I couldn't have built something like that before. So the big unlock for Prop AMM -- excuse me, for agentic trading is actually making it easier for people like myself to actually trade natively on chain. And I've been doing it now for probably 6 weeks or so. And I can tell you the tools are phenomenal. They work really well, and I can quote really effectively on chain.

There's actually a new start-up building on Solana called [ Hadron ] Finance that is working to take these ideas and make this accessible to truly everybody. So that's kind of the trading side of things. The stuff happening there is really cool. The payment side of things is probably more high profile and probably more interesting for the long-term story. And I think kind of the right way to think about that is in 2 major buckets. One is imagine you're talking to your AI agent, think ChatGPT, Claude, whatever, and you want to buy something. Being able to do that payment instantly for effectively 0 cost is quite compelling.

There's an open standard called x402 written by Coinbase as well as another one called MPP written by Visa, both of which are live on the Solana blockchain today. And there's a ton of developers now building on top of those open protocols. I expect to see the usage of that start to really ramp up in the back half of this year as the kind of major consumer applications start to adopt this stuff. The other real use case for agentic payments is kind of like think of large-scale micro payments. And I think this is particularly compelling, given the rise of agentic coding.

Today, if you're using Claude or Codex to build a new application, you can ask it to go and spin up some service, whether it's MongoDB or Supabase or Twilio or whatever, implementing all of those using agentic micro payments for basically -- which you use, a type of billing models. Usage-based billing models is a really compelling story for both the developers as well as for the merchants because the merchants get paid in real time. Again, I think this is going to really take off in the back half of this year as the model providers start to incorporate the stuff. So we're really excited about the growth of all of this.

That's, I think, the first part of the question. Second part of the question then is really basically how is Solana positioned. And I think here, really unequivocally, Solana is in the best position of all the major chains. What agentic payments fundamentally need is they need high throughput, globally available, cheap, fast transactions. Today, Solana wins on basically all of those fronts. And also the last one is on and off-ramps. And this is actually probably the one that people don't appreciate who look at this, but it's actually maybe the most important.

What I mean by on and off-ramps is, today, if you are Cloudflare, if you are Amazon, if you are any of these companies who want to start implementing a lot of these ideas, it's not enough that, like, there is a stablecoin on chain. You need to know that as that stablecoin gets moved around from user to user to user, that those people can on and off-ramp that stablecoin quickly and easily, irrespective of which jurisdiction they are in. And so what's so powerful on Solana is, today, Solana integrates with every major on and off-ramp in the world, every major custodian, every major wallet, every major market maker.

And so it effectively guarantees you're going to have the most liquidity to get those stablecoins on and off chain or to move them wherever else you might need to move them beyond the straight performance stuff. I think you can see the early signs of Solana winning this today with the adoption of their -- with x402 on Solana as well as MPP. There's some good dashboards out there that show this data, although it is still pretty early.

Neo Eloff: Then if I could ask one more question on just kind of asset allocation. As you think about upcoming quarters, is there a long-term target rate you're looking at for, say, native SOL staking versus Forward SOL staking versus kind of other initiatives you're looking at?

Ryan Navi: Sure. This is Ryan. I'll take that. So currently, our Forward SOL is roughly 25% of our total holdings today. I would expect that to increase over time as we functionally use our liquid-staking token as probably the most efficient form of collateral. So there isn't like a set number target percentage-wise, but I would expect that number to increase over time as we utilize and deploy. And was there a second part of your question, sorry?

Neo Eloff: No, no, no. It was just, I guess, native SOL versus Forward versus kind of like other initiatives.

Ryan Navi: Yes. So I mean, the way that our framework roughly is, we have the $7 million of Solana which, again, we're extremely convicted and bullish on for all the reasons that Kyle just mentioned. It generates a 7% native staking yield, which is kind of like the engine and kind of our baseline IRR for the business. So with deals like OnRe and ONyc, we're actively layering on things that are above that native staking rate of return. So in this case, let's say, 12%. And because we're able to borrow against our LST at such attractive terms, it's extremely accretive for our business.

And because we're borrowing dollars and deploying in also USD-denominated cash flows, our assets and liabilities are a lot better matched. So to just walk through an example, if we post $1 of collateral of fwdSOL, earning 7%, let's hold prices constant, and we're borrowing, let's say, $0.50 on the $1, just to keep the math simple, or paying 2%, we're actually only paying $1 of interest expense there, and we're still earning the $7 of SOL staking rewards. So our net on the total collateral package is still $6. So it is a small hit to our all-in yield on our assets, but we now have $0.50 of collateral that's unencumbered dollars that we can deploy as we wish.

And in the example of ONyc, if it's 12%, we're picking up 10 percentage points of spread on that $0.50. So it's actually $5 on top of the $7, we're actually able to increase that up to $12 and it's done in a thoughtful asset liability match way that does not increase our left tail. So again, we don't have specific percentages, but we are actively diversifying and looking to increase our diversification into real-world assets on the Solana ecosystem.

Operator: Your next question today is coming from Sam Dufault from Oak Ridge Financial.

Sam Dufault: Kind of going off to OnRe, I was wondering if you guys were able to maybe list any specific companies currently facing risk with OnRe and maybe how big that underwriting book is today to generate that 10% spread that was just mentioned?

Ryan Navi: Yes. I don't know if we're at liberty to discuss specific counterparties on OnRe's behalf. But what I can tell you that is publicly available is that their ONyc token, post our deal announcement, has now increased to almost $175 million of public float. At the time of our deal, the pro forma amount was $150 million. So in just a week, already showing 10% growth in the total flow, which is great. So glad to see that we were right in our analysis that we could at least start to create our own catalyst with the OnRe equity platform. Specifically, I think they're accessing the same traditional reinsurance providers that you may or may not have heard of.

But again, I don't think it's appropriate to necessarily go into their counterparties since it's their information to share.

Sam Dufault: Yes. No, that's totally understandable. And then just on the non-debt M&A, any other opportunities in the pipeline that you guys see opportunistically to kind of gain SOL per share going forward?

Ryan Navi: So I think from a non-debt M&A perspective or minority investment perspective, again, we're always looking at all available companies and opportunities. I would say more RWAs, that could be reinsurance, that could be royalties, that could be asset-backed finance, the list goes on, the premise though is looking for these opportunities where we can do the following. We can use our balance sheet as a tool to create a catalyst for the company that we are actively investing in, both as an equity partner and as an LP effective investor.

So again, just to reiterate on OnRe, we have upside on equity with OnRe via our Series A investment, but then we also effectively [ LP'd ] into their ONyc token or provide liquidity to their ONyc token, which achieves our stated objective of earning above-the-native staking yield. And again, because we're borrowing dollars at 2%, highly accretive, extremely attractive for us and actually makes the business more durable while also increasing our U.S. dollar cash flow.

Sam Dufault: Great. And then on one of the slides, it mentioned 44% annualized growth rate on that SOL per share. Are you guys able to break out how much of that was based off of the buybacks or the -- on the M&A strategies at all?

Ryan Navi: Maybe Mark can provide the specific numbers, but I can tell you the vast majority of that is going to be driven from the March share repurchase transaction that we publicly announced. So I would say the lion's share is definitely going to be from share repurchases this quarter.

Brazier Christopher: Yes. It's -- like Ryan said, the lion's share is going to be share repurchases, not just the share transaction in March, but also our programmatic share repurchases that we've been doing over the course of the last couple of months. So that's going to be the lion's share of it.

Sam Dufault: Great. And then just one quick clarification question. I saw that some of the Galaxy third-party-related expenses are being reduced going forward. Are there specific material relationships between the 2 firms that are maybe ending? Or is the relationship going on as similar quarters, just the reduced expenses?

Brazier Christopher: Yes. So we have a services agreement with Galaxy that is going to come to an end in June, and that's for certain operational resources that they've been providing to Forward, namely sort of financial and accounting services. And then the other relationship we have with them is them as our asset manager servicer. So we have an asset management agreement with them that will continue. That's a long-term agreement. And like I said, that is a variable cost within our SG&A that's -- the fees are based on a percentage of our AUM. So those are the 2 material relationships we have with Galaxy.

Operator: We reached the end of our question-and-answer session. I'd like to turn the floor back over to Kyle for any further or closing comments.

Pyahm Samani: All right. Well, everyone, thank you so much for joining us for our Q1 (sic) [ Q2 ] 2026 earnings call. The company is doing phenomenal, getting everything in line after the PIPE transaction last year, delivering great SOL per share results and starting to make strategic acquisitions and investments, as Ryan and Mark talked about. Thank you all for your time, and we'll talk to you soon.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.