Antalpha Platform Holding Company

Good day and thank you for standing by. Welcome to NLFAR's fourth quarter and full year 2025 earnings conference call. Today's call is being recorded. All participants are now in a listen-only mode. After management prepare remarks, there will be a question and answer session. I would now like to turn the call over to Mr. Chris Mamoni, Managing Director of the Blue Shirts Group and Representative for NLFAR's Investor Relations Team. Mr. Mamoni, please go ahead.

Thank you, Operator. Please note that our remarks today will include forward-looking statements based on current expectations. These statements involve risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to Ad Office Filings with the SEC. We do not undertake any obligation to update forward-looking statements except as required by law. This call also contains references to unaudited non-GAAP financial measures. Reconciliation to the most comparable GAAP measures can be found in our press release and SEC filings. I'll now turn the call over to Herman Yu, Head of Strategy at AntAlpha. Herman will provide key operational highlights, followed by Paul Yang, who will provide financial highlights. On the call today, both Herman and Paul will discuss our results on a year-over-year basis, unless they mention otherwise. Herman, please go ahead.

Welcome, everyone. Thank you for joining our call today. And Alpha delivered a strong fourth quarter to wrap up a milestone year, reflecting the continued execution across our long-term roadmap. Revenue growth accelerated every quarter throughout 2025, with fourth quarter revenue reaching 28 million, up 110% year-over-year. Despite Bitcoin prices declining 23% in the fourth quarter, Nalpha revenue remained resilient. For the year, Nalpha revenue was $80 million, up 68% year-over-year. Total loan book grew at a consistent steady pace with prudent risk management. Total value loan on Nalpha Prime reached $2.8 billion at the end of 2025, up 59% year-over-year. Bitcoin pledge on the total loan book was $3.7 billion. Loan to value, or LTV, on supply chain loans was 57%, representing our disciplined approach to underwriting and collateral management. Loan balance per client grew 43%, and new client ads increased 12% year over year. At the end of December, our clients generated 81.3 exahash, approximately 7.3% of global hash rate. For the fourth quarter, adjusted EBITDA was 18.4 million, up 802% year over year. And adjusted EBITDA margin reached 66% up 51%, 51 points from the prior year. For 2025, adjusted EBITDA was 33.2 million, up 460% year-over-year, and adjusted EBITDA margin reached 42% up 30 points for the year. As a crypto native financing platform with tokenized gold upside and alpha revenue and profitability reached a historical high in the fourth quarter, our mining financing business is aligned with economics of compute, energy, and collateral-based lending. Our clients are more long-term focused, and they rely on ANALPHA's risk management capabilities to better equip them in navigating macro volatility. In addition, by embracing Tether Go and acquiring XEAT as part of our long-term roadmap, such risk management strategy not only improves our balance sheet resilience and funding source, but also provides our shareholder with the upside to goal appreciation. In an industry susceptible to volatility and large market swings, it is important for us to solidify our current strength while seizing new opportunities in adjacent industries. When we look at large global financial institutions, we often find market leaders that have solid balance sheets to weather market turbulence and be ready for market opportunities as they arise. To us, this means having an active risk management strategy to weather the market volatility and leveraging our marketing position and competitive mode to build on new market opportunities. Let me talk about our risk management and product innovation. Let's start with risk management. And Alpha's operating philosophy of risk management first has been prevalent since our inception. We require over-collaboration on day one instead of relying on clients' credit rating for loan origination. We require our clients to store their machines at a data center where we know the operator, and all the BTCs our clients mine are deposited in our wallet during the term of the loan which allows our clients' collateral pool to accumulate. With Bitcoin down approximately 50% from its peak last October, we have been in conversation with our clients to review the current market situation. There have been four other periods in BTC's 17-year history with a drawdown of 50% or more, and the market rallied back each time. From a risk management perspective, it's important to be in conversations with our clients to discuss potential scenarios and options with them. Helping our clients navigate market volatility and maintaining a stable financial position is crucial to our clients' long-term participation in the Bitcoin mining industry. This not only brings tremendous value to our clients, it also strengthens our own business overall. Let me turn to product innovation and seizing new market opportunities. Our competitive mode comes from our ability to serve clients. We work closely with our clients to understand their needs and offer new financing solutions in anticipation of new market opportunities. For example, it has almost been a year since we foresaw the importance of tokenized gold in serving the mining community and the crypto industry at large. Initially, we acquired 20 million in Tether Gold. Last October, we acquired NASDAQ listed Aurelion, anchoring its $100 million pipe and purchasing $134 million in Tether Gold, which further strengthened our balance sheet while building for gold appreciation upside. As of year end, total accumulated unrealized gain on Tether Gold was $16.6 million. $9.5 million of that is attributed to Nalpha. Year to date, gold prices have gone up another 22% as of last Friday. Aside from treasury gains, our involvement with Tether Gold and launching Nalpha RWA Hub have also allowed our customers to diversify into Tether tokenized gold and improve the resilience of their crypto holdings. Starting in Q4, a client can purchase XAT from us and redeem London bullion gold in both Singapore and Hong Kong. As a long-term roadmap, it's important to incorporate tokenized gold into our risk management strategy. Gold has low correlation with Bitcoin and low volatility. Tokenized gold is well-suited for the use as a collateral and as a store of value. We are looking into offering XAAT collateralized loans to our clients for resilience and diversification. With a strong supply of HPC coming to market, the backdrop suggests that AI agents are expected to drive demand for influence compute. With the advent of AI engines, We see financing opportunities that in the past were not possible due to the high administrative costs are now opportunities for us, such as agent-led financing solutions. 2026 will be an exciting year for us as we align Enelpa with new AI capabilities and market opportunities, as well as adjusting the way we operate to become an AI-driven company. We will brief you more on how we approach AI when we are ready to share more details.

With that, let me turn the call over to Paul to walk through our financial highlights.

Thank you, Herman. I will walk you through NLFi's financial performance for the fourth quarter of 2025, focusing on the undying drivers of our results. We closed the acquisition of Aurelien and their 100 million pie raising on October 10th last year with 73% of Aurelien's share voting rights. We started consolidating Aurelien's operating results subsequent to the due closing. We released the Q4 earnings release earlier today as you can see Our Q4 earnings released show Nalpha's operating results at three levels. The first, Nalpha combined and consolidated. And second, Nalpha Prime, which is the Nalpha business prior to the acquisition of Aurelien. And the third, Aurelien. Herman summarized Nalpha's consolidated results. Let me now give you more color on Nalpha Prime and Aurelion. Let me talk about Nalpha Prime first. Fourth quarter revenue on our Prime business was $28 million, which reached the high end of our guidance, growing 110% year-over-year. All revenue derived in Q4 was organic, There was no contribution from Aurelien. Tax financing fees on supply chain loans was 18.5 million, up 79% year-over-year, driven by continuous strengthen in HHA loans. Tax platform fees on margin loan was 6 million, up 98% year-over-year. Other revenue was 3.5 million, This was mainly related to prior loans, which did not have such revenues in prior years. Turning to net fee margin or NFM. Total NFM increased 25 basis point year over year, driven by marginal improvements. NFM increased 30 bps year-over-year to 1.49. For supply chain loans, funding costs increased slightly faster than revenue growth due to the redeployment of 40 million as part of our investment in the Aurelian Pi. Turning to non-GAAP operating expense, excluding funding costs, NL4 Prime non-operating OPEX excluding funding costs was $8.5 million, up 45% year-over-year, which was lower than the 110% year-over-year revenue growth, reflecting continual operating leverage from an alpha prime technology platform. With prime operating expense on a non-GAAP basis, and development fee increased 32%, and G&A expenses increased 35% year-over-year, which reflects operating efficiency. Sales and marketing increased 121% year-over-year, or $1.6 million. mostly due to increase in industrial event sponsor and to a lesser extent due to the increase in personal related expense. Prime adjusted EBITDA was $9 million compared to $2 million last year. Prime adjusted margin was 32% compared to 15% last year. Q4 prime adjusted EBITDA includes $3 million unrealized gain on Tether Gold. Turning to Aurelien, Aurelien did not have any revenue in Q4. Adjusted EBITDA of Aurelien for the Q4 was $9.4 million, which includes $10.4 million in unrealized gain on Tether Gold. Let me decompose our current valuation Aurelien's net asset value at 31st December was $106.8 million, not counting the gold appreciation since. Antelope's economic interest of 32% in Aurelien would be worth approximately $34 million. When you add back, take this out from Antelope's market cap, of $208 million using last Friday's closing price. Nalpha is being valued at roughly 2.2 times of 2025 revenue and 9.3 times of 2025 net income attributed to Nalpha. We have built a very sizable crypto native lending platform with strong risk management which positions us in a very unique position to take advantage of new blockchain lending scenarios, including insurance compute and AI agent lending opportunities. Turning to Q1 guidance, we expect revenue for the first quarter of 2026 to range between 20 million and 23 million, representing an increase between 47% to 69% year-over-year. This assumes that market conditions remain consistent with what we see today for the remaining period of the quarter. With that, I will turn over to Herman for closing.

We exited 2025 with strong execution across our strategic priorities, going consistently across Bitcoin up cycles and down cycles. We have scale and alpha prime lending. At year end, our loan book stood at $2.6 billion, and our client provided $3.7 billion in Bitcoin collateral, which is an amazing feat for a three-year-old company like us. Looking ahead in 2026, our priorities are of threefold. First, we will remain focused on active risk management and continue to work closely with our clients to manage market volatility. Having a sound balance sheet position our clients to having a sound balance sheet positions our clients to expand mining activities in the future. Second, As a crypto native landing platform, we establish trust and brand in the industry. We are well positioned in the mining industry and leveraging Alpha Prime to branch into new areas. We are super excited about using our platform to tap into AI. There are tremendous opportunities that AI agents will bring to the industry. And lastly, we'll continue to innovate in the area of Tether Go, including RWA Hub and other opportunities to release the value of tokenized gold. Real world assets will be an important category in the crypto industry. Tether announced in January that they have acquired $23 billion in gold, which tees them up to make tokenized gold a very big business. With that, let's go into Q&A. Operator, please go ahead.

Thank you, management. At this time, if you'd like to ask question, please press star 11 and wait for a name to be announced. If you'd like to cancel request, you can also press star 11 again. One moment for the first question. Our first question comes from the line of Ed Angel from Compass Point. Please ask your question.

Hi, thank you for taking my question. Do you mind just talking about the performance of the loan book, whether or not there was any write-offs or provisions in the fourth quarter, and I guess just for the date, how that's been holding up?

Oh, you want to talk about loan provisions? Sorry, I was on mute just now.

For the fourth quarter, we don't have any write-off on the loans, but we do calculate provision based on the CISO, which is a normal practice for assessing the provision of our...

Can you hear me? Yeah, we can hear you. Yes.

Yeah, okay. Yeah, yeah, yeah. So basically it's calculated based on the loan book, yeah.

Okay. Yeah, and you can see from our LTV, it's at 57%, which is pretty healthy.

and it gets just in the first quarter, would you expect continued no write-offs either?

We're managing our loan books now, as I mentioned in the prepared remarks, that we're talking to clients and, you know, monitoring them and working with them. So, I think at this point, we are managing our thing, and we are obviously, You know, as we mentioned, the way we work our business is we want a client to have sound balance sheet, right, so that with new versions of machines that come out, they can participate in the next upgrade. They could continue to have a hash rate financing and so forth. So we're working with them right now, and that's what we pride with, you know, our risk management. So we're managing this, and so far we haven't seen any, you know, major issues with these, you know, bad debt write-offs and so forth. So we're going to have to manage the situation because the situation is fluid, as you know, with so many events that's happened just in the last few weeks.

Great. That's helpful. And then you talked about a $3.5 million of revenue from pilot loans. But those are also repaid by the end of the year. So, do you mind just kind of explaining to me what those pilot loans were and would you expect to have those again in 2026?

Yeah.

So, you know, we've been having experiments with different type of loan scenarios in the last few quarters. In Q4 specifically, the majority of the loan came from, you know, a loan, a bridge loan that we gave for that. And because the loan term expired by the end of the quarter, we don't expect to have that kind of a loan in Q1.

Great. Thanks for the comment. And great. If you have these, we're going to put them in.

Thanks.

Thank you.

Thank you for the question. Our next question comes from Darren Aftahi from Roth. Please go ahead.

Hi, guys. Good morning. Good evening. Just three, if I may. In light of power and globally people maybe reallocating power from Bitcoin mining to AI, can you maybe talk about what you're seeing in the market in terms of opportunity Obviously, in crypto winners, sometimes people lean into things and then there's other times where, you know, cost of mine becomes a little bit prohibitive. So just maybe the macro environment there to your AI lending and financing platform, like what sort of KPIs do you need to see in order for that to become kind of a real product slash revenue line. And then is there any thought from the management or board level about share buybacks or redeploying capital for shareholders? Thank you.

Okay, great. That's a lot of questions. Let me try. So energy, I think a couple things. You know, we're seeing a lot of public companies, you know, shifting their data centers for AI use. I think in that sense, it's probably positive for our business because then that will level the playing field for everyone. As you know, there's limited amount of Bitcoins out there. So if everyone's at the same energy efficiency, then it's easier for our clients and so forth. So I think from that perspective, in terms of the energy cost, there are many factors going to that. It's hard to generalize. So, when you look at our customers across different regions of the U.S. The cost of energy, there's factors like, for example, different cities, they would have probably different price for mining versus their typical commercial and residential. So if you have too many people doing mining and it's sucking away from commercial and residential, you probably get taxed. So, so that is more of a function of how many machine, how dense of those machines are in that particular city. And obviously across different cities, they have different, you know, way to charge the rates. I don't see any particular pattern that's impacted by AI. What we normally see is because of the fluctuation in Bitcoin prices, because of people coming in with new machines and so forth, those things are usually more direct impact to this energy. Okay, so I would say, you know, the cost of mining of Bitcoin today probably just is higher than, for example, a year ago, right? And you saw some of the, you know, public companies reporting the cost of getting one, you know, Bitcoin. Okay. AI lending. I think AI lending is really two ways. One is we talked about, you know, inference chip compute. What we're talking about today, I think, opportunity that we're also looking at is using AI agents. In the past, as you know, this whole lending business, there's a lot of administrative things you have to do. Number one is all the KYC, all the checks and stuff. Secondly, I think it's very unique. I think going forward that today, for example, if I go into my account and I want to buy a certain type of bond, buy a certain type of, you know, products and so forth. I have to manually shift it. There's a lot of things that you select. And if you have different, you know, on different, you know, platforms and so forth, you got to go through each one of these and read the details, right? What we envision is with, you know, these agents, In the future, you just set the criteria. It basically just continues to go out, and it just searches for these. And between agents and so forth, you can consummate these type of transactions versus mainly have to seek them out. So I think with the advent of AI, I think people who are in the blockchain who can do risk management, who has the whole platform set up, gives us an opportunity to actually leverage the blockchain technology, which agents can be able to basically talk to another agent. And you could basically go out and scout out, here's the criteria that we want and so forth. And then if it meets my criteria, then I'm willing to transact. So it brings a really interesting dimension. We're looking at that and we're also looking at how our company is structured and how do we adjust that so that we're seizing and putting ourselves set up to take advantage of such opportunity. In terms of share buyback, you know, our stock price has been going, you know, volatile, and we're watching the market. So, you know, we announced a share buyback. a while back and we are watching the market and we're looking at it opportunistically. Obviously, with a stock price going up and down because of recent news and so forth, you probably wanted to settle down or you wanted to see if there are, you know, opportunistic ways for us to do this so that it adds value to our shareholders.

Okay.

One moment of attention. Next question is from Hal Gowich from B Riley Securities. Please go ahead.

You know, in Q4, there was quite a drawdown in Bitcoin prices, and the results were, you know, pretty good, solid results for the quarter, $28 million in revenue. But another drawdown in the quarter, Q1, and the guidance is for $20 to $23 million in revenue. down from 28 million and four Q. And I wonder if you could give us a bridge to how you think about that quarter shaping up versus Q4. Just kind of, you know, what are some of the drivers of how you're thinking about that guidance and how it steps down from 28 million to the 20 to $23 million range? Thank you.

Okay. I think number one is, as we mentioned earlier, we have, you know, other revenue. that we test pilot in Q4, that 3.5. So that's going to go away in Q1. So that brings us in the 24 range. So our guidance right now, you know, the 20 to 23 versus the 24, That gap is the anticipation of maybe some of the loans. There could be early retirements. Because, as I mentioned earlier, we talked to these, our clients and so forth, and some of them There are those that want to continue mining, thinking that there could be, you know, Bitcoin going up. And there are those that, as we talked to, they feel like closing it out would make sense. So you're seeing that, those kind of discussions reflected in our guidance.

Okay. You know, I think we've had prior discussions over the last, you know, year or so, Herman, Talk about how if there's drawdowns in Bitcoin prices, miners get more active and maybe you don't have the loan balances and margin loans, but the Bitcoin mining gets more active. Are you seeing that behavior now? People are kind of leaning into more mining machines to buy Bitcoin when it's in a drawdown? How is that progressing?

I think at this point, because, you know, Bitcoin prices have gone down pretty significantly in a very short amount of time, and because there's a lot of uncertainty in the market, you probably want that to settle a little bit before people go in. So I think we need to stabilize a little bit and then, because from our perspective, if prices are coming down or going up, any type of these big changes, you know, we want to have a more stable price in a more stable environment before we're willing to lend it out, right? Because we're based on LTV. If it's you know, going down in a certain speed, and then all of a sudden you land it out with this LTV, that margin could be eaten out very quickly. So I think that there's a demand there, but from a risk management perspective, as I stress in my prepared remarks, at this environment, it's very important for us to make every loan donation, make sure that, you know, it doesn't blow up in us a couple of quarters down the line. So we're going to be looking at the current macro situation. As things get more stable and so forth, then what you said, there's more opportunity for us to do that.

Okay. Thank you, Ron.

Thank you. Thank you for the questions. One moment for the next question. Our next question comes from Devin Ryan from Citizens Bank. Please go ahead.

Hey, guys. This is Neo Elof on for Devin. Just kind of a quick question on policy and how you guys are thinking about it. So obviously the Clarity Act is kind of a big topic here in the U.S., but you could talk about various legislation around the world. I guess what do you see as the opportunities as some of this legislation kind of comes through for your various businesses? And what are some challenges you participate or expect as some of the incumbents potentially are more willing to get into this lending game as it becomes more institutionalized?

I think First of all, I think when you think about, you know, crypto with these new legislation and so forth, you're seeing a lot of the existing financial institutions going to it. Right. And you're seeing a lot of the, for example, asset management going to, you know, RWAs and so forth. So what that means, I think, is number one, access is going to open up. So I don't think in a market that even today is $2 trillion, you're concerned with competition because the size of $2 trillion is a huge market. But if you look at just our client right now, you have a crypto on their hands over three billion some dollars, there's a lot of things you could do for them to actually diversify in their investment. So I think the opportunity is there. I think number two is, as I mentioned earlier, when you think about first the mining business and outside of the mining, you gotta have a platform, you gotta have a brand, you gotta have all this situation worked out for risk management. Being able to deal with stable coin, being able to deal with, for example, like tokenized gold, because any type of these exchanges, you need a place of safety, right? If some of these investments have high volatility and so forth. So I think from that infrastructure stack, I think we're well set up over the last three years. And as these market opportunities arise because of our brand, because our customers currently have a lot of assets in their hand, that gives us kind of that foundation to go into these new businesses. I think whether it's Clarity Act or any other thing that gives it more clarity, it just means that there's more partners that we could work with. And because of our platform and the clients that we have, the current assets that we have, we could do a lot with these kind of opportunities.

Awesome. Thanks.

Thank you for the question. That concludes the question and answer period.

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