Defi Technologies, Inc.

Hello everyone and welcome. I'll give some folks about 30 seconds here to filter in and then we'll get started. In the meantime, I'll just go ahead and do the opening remarks and read the disclaimer. Everyone, welcome to the DeFi Technologies first quarter. 2026 Financial Review and Shareholder Call. I'm Curtis Lossman, VP of Marketing and Communications. Joining me on the call today are Chief Executive Officer Johan Wattenstrom, Chief Financial Officer Paul Bozoki, and President Andrew Forsen. We'll begin with opening remarks from Johan, followed by a review of our first quarter 2026 financial results from Paul, and then an update on growth initiatives and strategic priorities from Andrew. After that, we'll open the line for Q&A. For investors, you can answer questions in the chat. I'll get those to those throughout the presentation, and then I'll answer some of those live, and then we'll bring on our coverage analysts on to ask questions live. Before we begin, I'd like to remind everyone that certain statements made during today's call may constitute forward-looking information under applicable securities laws. These statements include but are not limited to comments regarding expected financial performance, business development, strategic initiatives, market expansion, product growth, and future opportunities. Forward-looking statements are based on management's current expectations and assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied. With that, I'll turn it over to Johan.

Thank you, Curtis, and thank you, everyone, for joining us today. The first quarter of 2026 reflected a more challenging market environment across the digital asset sector, with softer market conditions impacting assets under management, staking related income, and overall investor activity during the period. At the same time, we believe the quarter reinforced the strength and durability of the business we have built. Even what we view as the most challenging quarter of this recent crypto market downturn, with enterprises reaching their lowest during the period, Deepak Technologies generated revenue of $11.2 million and positive net income of $4.9 million, while further strengthening the balance sheet through a significant improvement in working capital. More broadly, the quarter demonstrated the resilience of our business model and the discipline of our operating approach. We navigated a difficult market environment while continuing to manage costs carefully, support a product platform, and advance several important long-term growth initiatives. Average AUM during the quarter was approximately $533 million, with through levels through the period reaching approximately $427 million. While lower than prior periods, these levels were broadly consistent with market conditions and visible through our publicly reported AUM disclosures. Importantly, our model continues to demonstrate durability even during weaker market conditions. Our management fee profile remained relatively stable, and our diversified monetization approach across management fees, staking activities and trading infrastructure and institutional initiatives continue to differentiate the platform. Across the business, we have demonstrated that DFAC Technologies is not reliant on any single product, revenue stream or market environment. Our platform continues to benefit from multiple pathways for growth across asset management, trading and capital market infrastructure, and we believe the company has never been better positioned to capitalize on the convergence of decentralized finance and traditional capital markets. At the center of the group remains Valor. Today, the platform includes 103 listed products across multiple exchanges globally. We continue to believe the breadth of the platform combined with our ability to monetize AUM across multiple activities differentiates us in the market. We also strengthened our commercial leadership during the quarter with the appointment of Jakob Lindberg as Chief Revenue Officer. Jakob is focused on expanding distribution, deepening institutional relationships and accelerating revenue opportunities across our product platform. We believe this addition strengthens our ability to scale institutional engagement globally. In addition, we continue to evolve our institutional product initiatives, including our usage platform efforts, our hedge fund efforts, which we believe represent an important long-term opportunity to broaden access to regulated digital assets investment products across global fund platforms and institutional allocators. As we move through 2026, we remain focused on expanding institutional product structures and other regulated vehicles. while continuing to invest in the products and rails that support the future of digital assets investing. We also continue to see opportunities to increase monetization across the platform, particularly through the trading, hedging, and market-making infrastructure embedded across Valor's issuance stack, which supports our ability to earn additional income on AUM more efficiently. From a financial standpoint, we ended the quarter with more than $103 million in combined cash and USDT, USDC, approximately $23.5 million in treasury holdings, and a venture and private portfolio valued at $29.1 million. For total cash, treasury and venture portfolio value of approximately $156 million. We also ended the quarter with positive working capital of 47.3 million, a significant improvement from year end 2025. That fortress balance sheet gives us the ability to be proactive rather than reactionary, and to deploy capital deliberately into growth initiatives, strategic infrastructure, and potential acquisitions that deepens our capabilities and strengthens long-term earnings power. Overall, while Q1 was a soft recorder from a market standpoint, we believe the distance remains well positioned operationally and financially, with strong cost discipline, a resilient platform and multiple long-term growth initiatives underway. We are increasingly encouraged by improving market conditions as we move through 2026, which we believe would create a more favourable backdrop for the AEM growth, stronger ETP demand and revenue acceleration through the remainder of the year. We are already beginning to see early signs of that in the business with AUM now above $530 million and April 2026 net inflows of $14.6 million, representing the second strongest monthly inflow in the last 12 months after September 2025 inflows of $22.6 million, following a Q1 period in which flows were relatively flat. With a proven business model, expanding monetization, and the financial flexibility to operate from professional strength, we believe DeFi Technologies is exceptionally well positioned for the quarters ahead. With that, I'll turn it over to Paul to walk through the financial results.

Thank you, Johan, and good morning, everyone. I'll begin with an overview of assets under management. Average AUM for the period was approximately $533 million. At the low point during the quarter, AUM was $427 million. While market conditions were challenging, these levels remained within a manageable range for the business and were consistent with the market environment investors experienced across the broader digital asset sector. Our effective management fee yield was approximately 1% for the quarter, compared to approximately 1.2% in prior periods, primarily due to the larger relative weighting of Bitcoin-related products, which carried lower or no management fees. following the sharp decline in altcoin prices. Within Valor, our effective staking yield declined to 2.5% due to the significant price declines in the altcoins, which pay higher effective yields to Bitcoin. Compression in Bitcoin and Ethereum lending rates, combined with lower effective staking of the AUM given substantial market volatility, and the unstaked during Q1 of previously locked Solana coins that became unlocked and distributed from our equity investments directly to Valora on April 3rd. Notwithstanding the lower monetization of 3.5% of our AUM, total revenues for Q1 came in at $11.2 million, which is greater than $9.7 million in operating general expenses and fees and commissions, our primary cash costs, reflecting the cost display through the challenging crypto market conditions of Q1. The company continued to maintain its balance sheet strength with $87.6 million in cash and $13.1 million of USDT-USDC for a total of $100.7 million of cash in USDT-USDC on hand at March 31, 2026. Turning to product activity, we ended the quarter with 102 ETPs and structured products across our platform. During the period, we continued expanding our higher value offerings, including the leveraged bull and bear ETPs introduced in late 2025. We also continued expanding geographic distribution through cross-listings in markets such as London and Brazil. In terms of ETP flows, they remained relatively resilient during the quarter, with a small 0.7 million outflow given the challenging cryptocurrency price environment, which saw Bitcoin reach a low of $60,000 per token. Stillman Digital continued to perform well during the quarter and remains an important diversification component of our broader platform. Stillman generated approximately $2.9 million in revenue during the quarter, an increase in 38% from Q1 2020 with an actual revenue of $2.1 million, and is thus far on track to meet or exceed its planned 15% to 20% year-over-year growth. Turning to operating expenses, Our Q1 actual operating general and mid expenses and fees and commissions came in at $9.7 million, which on an annualized basis is $38.7 million, or slightly in excess of the $36 million target we set for ourselves. Management will continue to strive to keep core operating costs at levels that maintain cash-positive core operations. Based on our current cost structure and monetization profile, we continue to believe the business remains positioned to achieve profitability during fiscal year 2026. With that, I'll turn it over to Andrew.

Thank you, Paul. As we discussed last quarter, our focus remains on building the distribution relationships and operational infrastructure required to support broader institutional adoption of our products across global markets. This process is ongoing, and in Q1, we continued expanding our distribution and onboarding efforts across Europe, Latin America, and Asia following our launches in markets such as London and Brazil in late 2025. We continue to see these markets as important building blocks in expanding the global reach of the platform and strengthening access to new pools of investor demand. Our capital markets distribution work also continues to be executed with an eye towards supporting future USITS distribution. We believe USITS and other innovative fund strategies, as provided by our portfolio company, Neuronomics, remain an important opportunity to broaden access to our products through traditional fund platforms and institutional allocation channels. The beautiful thing about the use of CCAB structures we have been working on are their appeal to and accessibility by large institutional capital allocators worldwide. Progress on that front remains an important strategic priority, and we continue to position the business to meet the operational, regulatory, and distribution requirements needed to support broader institutional participation We have repositioned our Global Insights Symposia at the DeFi Technologies Capital Market Series in order to bring targeted visibility to our full range of investment products and OTC prime brokerage services via Stoneman Digital to institutional investors globally. The first in our capital market series is our institutional investor event being conducted at the Canadian Embassy in London in collaboration with the Canada-UK Chamber of Commerce in June. We've also proven our ability to onboard assets into our existing ETPs through our institutional outreach programs. One such institutional allocation into our Valor ETP was highlighted in a press release and is reflected in these Q1 2026 financials. The other tranche of investment will appear in Q2 financials. This shows a resilient flexibility to the underlying DeFi technologies business model, even in poor macroeconomic market conditions. We continue to build out the business intelligence infrastructure first referenced last quarter, including the launch and continued development of tools such as our Depth Velour Investment Opportunity Index, or DVIO. These systems are designed to provide more granular visibility into product consumption, regional demand trends, inflows, and competitive positioning across markets. This information helps us improve product targeting, identify areas where institutional demand may be developing, and better position both existing and future products across our distribution network. The depth view index and the analysis space visibility it provides was critical to our ability to close the investments into our ETPs. Just this week, we released an improved index calculation engine which updates daily. This lays the groundwork for our ability to create innovative instruments based on our Velour ETP platform. Other innovations that have made considerable progress in Q1 include the work we've done to restructure our venture capital portfolio to bring more value to DeFi technology shareholders, as well as the continued development of the in-house digital asset custody technology. We spent Q1 researching and building proprietary tech and scaling our sales and distribution networks. All of this hard work during weak market conditions is designed to help us minimize costs, enhance marginality, and deliver new products that have broader accessibility globally and within the world of DeFi. Our results reflect the resilience of our business model and operating approach, despite a challenging macro environment. Looking ahead, we will continue to build strong European and strategic global distribution networks and the necessary operating infrastructure to support wider adoption of our products. At the same time, we continue to believe the work underway today will better position DeFi technologies to capture institutional demand, improve monetization opportunities, and support long-term growth as market conditions improve. With that, I'll turn it back over to Curtis for Q&A.

Okay, we'll take some questions initially from the chat. So if you're an investor and you have a question, please type your question in the chat and we'll sort it appropriately. And then if you're an analyst, please raise your hand and keep it raised, and I'll invite you on one at a time per usual to answer or to ask questions of Management Life. Okay. First question, are you guys planning to buy back shares as a retail investor? We are so worried about the NASDAQ listing.

Johan? This is, I think, two different subjects. The buyback of shares is something we might do in the future. It depends on our cash flow. We don't buy back normally from our cash at hand, but rather from strong cash flow. And it has no connection to the listing on Nasdaq. There is no risk of us getting delisted from Nasdaq. We have 180 plus, 180 days to get over $1. If we're over in 10 days, I think, over $1, it resets. Also, obviously, we will do a reverse split if needed. Not if we don't need to do it, but if needed, we will do it. I know a lot of people are relist. about reverse splits, but I think that's uncalled for. The kind of statistics that shows bad performance after a reverse split includes all the companies that do reverse splits. Most of those are companies in distress. So if you sort those out, there's no actual negative impact. We can also, obviously, if we do a reverse split, make use of the buyback program to support through those days to make sure there's no negative impact. But, yeah, I guess in short, there's no risk of us being delisted. We have plenty of runway, and in the worst-case scenario, we can do a reverse split. When it comes to the buyback program, we have a lot of really, really – high potential investments and usage of funds to actually make more money. And that's the primary use. We obviously keep that as an option if we need to. So in worst case, we could do it, but it would never be for NASDAQ's purposes. That's not simply a real risk. And the information to the contrary is false information.

And I think just to add to that, we also would qualify for another 180-day extension if needed. So effectively, that gives us about a year to regain compliance. And hopefully, as we mentioned, we're growing more optimistic about coming out of this crypto winter. So if there's additional catalysts to underlying asset prices, that should push us in our AUM or AM much higher and us over a dollar. And on top of that, we do have growth initiatives coming up that would, you know, we hope help the share price. So there's, I would say nothing imminent right now in terms of risk or even a reverse split. But it's certainly like if any, everybody, if you're hearing that we're going to be delisted, that's absolutely not true. Number two, when do you plan to release your annual goals? I think, you know, we talk a lot about our institutional fund structures. that USITs, actively managed certificates, fund-to-fund programs, that's our primary focus for this year. I think I can let Andrew and Johan speak on that further, but we've talked at length over the past few months about what our goal is for this year in terms of diversifying our product sets towards more institutional focus.

Yeah, absolutely, Curtis. I might comment on that. I think people should take comfort in the work that the company is doing to launch these products. The fact that we're being so rigorous, meticulous, and doing it the right way to build out a full and complete fund platform, it's also an indication of the moat that there is in this industry. Some time ago, Johan indicated that one of the strategic objectives of DeFi Technologies and our Valor asset is to become one of the world leading asset managers. In order to do that, we have built an infrastructure for these broad range of fund products. And what makes me particularly excited about these fund products is it actually changes the revenue profile of the business in terms of being able to generate higher returns than a standard hurdle rate and also in terms of being able to distribute our products globally without needing any particular new type of listing. But the upshot of this is These are very valuable structured instruments in terms of the capital markets, and it means you've got to do it right. And this is something that DeFi Technologies and Velour has consistently done. I mean, in the heart of macroeconomic uncertainty with a lot of volatility in digital asset prices, I have to remind people that we generated nearly $100 million in revenue on a profitable basis when many in the Web3 industry either don't generate revenue at all or certainly don't do it profitably. So we're taking this same safe, consistent, structured approach to building out a new fund platform that will enable us to scale consistently and quickly and globally with a range of new instruments that will also provide us higher marginality and higher revenue potential.

Thanks, Richard. Next question. Hey, Curtis, team, hope you're doing well. If you guys are optimistic over crypto price action, how optimistic will guidance be for next quarter, full year? I'll start, and then, Paul, you can wrap this up. We've technically issued guidance for Stillman. We're guiding for 15% to 20% growth. Last year, they did just around just about $10 million in revenue, but 15% to 20% growth puts them at $11 million to $12 million. They had a really great first quarter with over 30% growth from year over year. So hopefully they can continue to execute at that level. In terms of Allure, from a technical standpoint, we haven't broken out through a bear market trend. I think that comes around breaking past $83,000 for Bitcoin. It's 200-day daily moving average. We'll see there. I think we're taking a more conservative approach this year in regards to guidance on that level. But if you look at Q1 and if you believe, like we're very optimistic about right now, that Q1 was the lows in the spare market, we came out profitable. So at these levels, you can assume that we'll continue to be profitable through the course of this year. Paul, if you wanted to add any additional color.

Yeah, thank you, Curtis. Okay, so for everybody, you know, again, let's start with Stillman because it's easier to get your head around. You know, they did about $10 million in 2025, and we've said 15 to 20. So 20% would be $12 million. People, if you look, they did $2.9 million in K1. So it is tracking to do $12 million this year. So there's 12. Then you look at Velour, and... There's velour.com has our AUM real time every day. Our monetization in 2025 was 5.2% for the full year. Q1 was low at three and a half. It was, we think a pretty crazy quarter in Q1 with crypto prices and in general, and we are crypto bulls. So we're suggesting four and a half percent as a conservative monetization rate for the year. And then put that on an AUM number and, for the year and our AUM has moved around a lot. It does generally move with crypto prices. We've been over a billion as people know. You know, now we're just over 530-ish and you hear about all the initiatives we've got Andrew, Johan and Jacob working on to bring in new money. In terms of providing guidance, like with those numbers, you know, you can kind of get to a core safe revenue. But we're declining on putting out a formal guidance for the entire company because we need a little bit more time on usage and the fund structures, which we think can really drive big numbers. And until there are a little bit more visibility, we're going to hold off on giving a consolidated kind of fixed number. But that is what I suggest people watch for, and that hopefully would really spark up the company once we get those things going. Thanks, Paul.

The investigation into share price manipulation issue has been around for almost a year. Shareholders need answers, no platitudes. Any meaningful update, please? This is an ongoing process. It's still ongoing, and it's something we will release updates about when there's material information. Due to the fact that it could be a legal process at all, we also cannot comment on it, because if we were to comment on something that is not public, and at privilege to the company, we would lose privilege on that information. So when we have further information on that particular topic, we will release it, and it is still currently an ongoing discovery process. And I think as a public company, too, we have to be very responsible and mindful of what we put out publicly, especially in matters that can be this sensitive. So unfortunately, we can't speak openly and freely about it publicly. Can you speak to your stablecoin strategy? You have small investments in a stablecoin and CNGM, the potential there of collaboration, integration into your stack. our last in-house development update. Andrew?

Yeah. Our strongest assets are part of our venture portfolio. And as the questioner correctly identified, we have investments in Continental Stablecoin, which is the CNGN, and in StableCorp. And we consider these very valuable. And they will be increasingly, their value will be increasingly accretive to DeFi as our fund structures come online. Now, one of the things I alluded to in my remarks is that we are working on innovative ways to generate more actually revenue-based value for the DeFi Technologies group from our venture portfolio. And you can believe having access to our stable coins, these stable coin projects on which we have, we sit on the cap table alongside Circle and Coinbase Ventures and both. The objective is to leverage these partnerships, leverage these companies, explore potential liquidity products. Of course, they are already in the process in both instances of working or onboarding to Stillman, which is significant being that these stablecoins need access to markets, need trading pairs in order to generate liquidity. And from our perspective, I think these are anchored products to the future of our venture portfolio, which we believe will be quite innovative and will actually leverage our core fund platform.

Thanks, Andrew. Have you all considered bringing custodial services in-house given the SOC 2 issue? I think one answer is yes, but I'll let Johan explain more about our custody plans.

Yeah, on the custody, obviously we have an internal custody technology stack, which we are developing now to productify and release to the public as a service. I think we have a very unique offering in this area, and one of the reasons I believe it's very important to build on this and release it is that we don't want to pay any other middlemen for this type of services, but also our needs are on a different level than what we can see the other offerings are in the market. It will provide a foundation for other things we're building in DeFi, in capital markets infrastructure in decentralized finance. Once we have this productified and launched, we will go off to both institutional, retail, deposit the money into this tech stack. And we have already quite a lot of infrastructure we will stack on top of the custody offering. So I think if you want to build and be active in building infrastructure in the centralized capital markets, you should have a really robust and innovative offering on the custody side. So that's what we're aiming to do. And I think we probably are aiming to have something ready end of Q3, definitely this year for public release. um and the q3 it would be ready for uh for uh using with all our internal needs for for custody for sure uh we it's a bit early to say when we have our dates for for public release but um it's not just about the custody stack it's because this is foundation for other things we think are unique and we can bring to the market for sure

We'll move on into some analyst questions. We'll get Alan Klee from Maxim. You're on, so go ahead and unmute yourself. Alan? I think I'm muted. Yeah, okay. Maybe he's stepped away for a second.

Oh, I'm sorry. Can you hear me?

Yeah, we hear you. Sorry.

Yeah, can you expand on your new institutional structures a bit and the feedback that you're hearing from potential customers?

Yeah, I'm happy to jump in on that. So basically, historically, as you might know, I think 90% of our AUM has been in the ETPs from the retail side. But I would say the last nine months we have – seen and heard a very strong demand from both institutional clients in our core markets, EU and UK, but also on a global scale from other types of funds and institutional platforms. And to meet this demand, we have accelerated our efforts to build globally available and more institutionally targeted type of products. Part of this is the usage fund, also Valor, the other funds, the Valor funds, which constitute quite a few hedge funds we have in the pipeline that will cover needs both from normal pension funds and alternative investment funds, but also from fund to fund, both in crypto and outside of crypto. And family offices, I would say, is also a strong driver So we have got some commitments and we have got some really strong demands from participating in this space. And obviously, I think the upside in terms of AUM is larger for this area than for the retail side. And obviously, every ticket price is much, much higher. So I think those products are the first to meet this demand. We're also looking to do a few more active amount of ETPs, but also some of the backed ETPs to meet another part of this demand that would be volatility-targeted ETPs, for instance, that have been seeked by a lot of asset allocators that do not want to reweight their allocation to crypto continuously. So, yeah, you will see innovation both on the fund side, normal hedge funds, CCAP funds, usage funds, but also in the asset-backed ETP side for this purpose. Also, I think maybe a little bit longer time horizon, a few of these will be well suited for tokenization as well.

Thank you. One last question. It didn't seem like you put too much into staking in one queue. I'm just wondering, how much of the AUM do you think can be put to work in staking and lending?

A comment, of course, and maybe let Paul comment on the levels then. So I think we are actually continuously increasing the levels, the percentage of AUM we put into staking. I think the important thing temporarily in Q1, where we already see improvements, is that with the lows of the crypto market, the Bitcoin dominance and also dominance for Bitcoin and Ethereum increased quite a bit. And as you've seen, the falling prices in SOL, SUI, all the other altcoins have been much deeper. So obviously then the overall AUM constitutes a larger proportion of Bitcoin Ethereum, where our margins are the lowest. So basically, once the market pop up back, we've seen a lot of movement already in SUI, in TONE. and the NDE and so forth. So we're confident that that market is bouncing back. And with that, you will see a much higher percentage of the AUM being in higher yielding, higher staking yielding assets. So I think it's mainly been driven by the relative speed contraction of the values in the altcoin markets.

Yeah, I want to add to that. Yohan gave you why the staking yield is down. It's just, you know, altcoins pay more than Bitcoin and Ethereum, but we staked 59%. Uh, it's a little bit on the lower side and it's because of this, there's a lot of volatility. There was, you know, February, there was some very sharp sell-offs. There is unbonding periods to get coins released so you can sell them. You know, we do, we do try to hedge. Uh, so, so the staking was driven a bit lower and in theory it could get up to about 80%. I think, uh, Low 70s would probably be more realistic in terms of if you were modeling it, but that's my view. So in a volatile market, it's in the high 50s, low 60s, in a normal market, 70s, and then in ideal times, up to maybe 80.

Yeah, we think that they come up now both with the market volatility, but also structurally as we're pushing how much we can stake safely without being in danger of not being able to hedge 100%.

Thank you very much.

And then Mike from Northland.

Hey, guys. First question, I'm just curious. You are sitting on this, you know, slightly over $100 million of cash. How much cash do you need to run your business? With all the trading, with new products, if you look out in 26 and 27, what is a minimum level of cash you need to run the business? Just trying to think through how much you truly need the next couple years.

Yeah, for sure. I can start with and leave over to Paul for extra comments afterwards. But for our own market making, where we also, by the way, will try to make it more visible, our profits on our own market making, it's now kind of hidden in the realized and unrealized P&L. For our own market making, I think the demand has been between 20 and 35 million dollars in that round. And there's obviously a scenario where we could go down to zero. We do have external market makers in all areas, but we think it's particularly important to hold the control of all the order books so we can have tighter spreads and high quality prices than all our competitors, which we do have. But I would say it's around, yeah, say 25, 35 million or so. that we need to have. Then obviously we have a few other needs for capital right now that will go down with time when we launching our funds. and other structures, we will use some of the cash to seed these funds to make it easier to go out and do road shows and sell it because we do need a substantial AUM to get big tickets in the beginning. It will be easier to accelerate that phase early on with seed money in those. And then we have been looking and we are looking at different acquisitions. We are very careful about it, so we don't see a lot of that, but there will probably be some good opportunities. And in this market still, it's some push against consolidation, and we are in a good position to take advantage of that. So we do not want to opt out of that opportunity to act quickly if there's a really great opportunity out there.

Got it. And then maybe just secondly, where should the market's expectations be on you guys showing a ramp in revenue from new products? Is that second half of 26, first half of 27? When should we expect to see some of that?

I would say the first half for sure, maybe towards the end of Q3, but Second half for sure. I would be very surprised if we don't see a significant contribution. Something I don't think we may have commented on, but something we were excited about in our venture into alpha type products with our funds and academic certificates. is that those will have at least the first fund, and I think the second, third one as well, will have the 1.5% management fee plus 15% performance fee structure. So besides our Valor core business and still none, this will be a third, I would say, very much uncorrelated leg of revenue streams. as the type of strategies we will launch can have some really great use. And if we look historically and simulate from that, the 15% performance rate could be something that's totally uncorrelated to market levels or activity, while still being significant even from not huge AUMs. because this strategy has a great shock ratio, very interesting performance dynamics, and low maximum drawdowns. So I think from how that return profile looks, it will actually give us a third uncorrelated way of earning potentially a lot of money for a lot of months so i'm really excited about that obviously it depends from us months when we see those returns monthly but i think anyhow from end of q3 we should see a significant the income start picking up got it thank you thanks mike uh any other analysts

Raise your hand and I'll invite you on. Okay. Then we'll go back to a couple questions in the chat in the meantime. This one for Andrew. Next steps in Brazil to get more Valor traffic on that exchange.

Yeah.

So the Q1s was a very tricky quarter in the digital asset space for starters. And what we did for most of Q1 was frankly focused on setting up a very efficient, lean capital markets team. So we weren't focused on selling in January and February, but I think we had our kickoff event. Any of you that follow us on X or LinkedIn, We'll see that we actually created a DeFi Tech Brazil. We had a kickoff event there. And then what followed in the next month was we ended up beating our next, I'll call them an expat competitor in terms of total turnover within that market. But what we want to do is make sure that we're really well positioned, not just for the ETPs, because the ETPs wrap our existing products. But we also want to make sure that they understand what is coming in terms of our institution-friendly products on the other fund platform. So right now, we have a team, effectively a capital markets, or I guess in fund parlance, an investor relations team, We also have PR and publicity. And we have met. I actually just returned from there where I did no fewer than three meetings a day, which were long meetings with institutional investors to build our brand, make sure people know that we are available, and also make sure people are aware of the services at Stillman, of course, our five ETPs that are listed, and our future fund products coming online. And with each visit that we make, with each month, we get more traction. But I want to highlight something. We're in this for the long term, and we're in this to build strong distribution for not only our existing products, but our future products, which may have higher marginality, and higher uniqueness. And Brazil is a market of 200 million people, but they currently have a very high risk-free rate of around 15%. And we are a new entrant into the market. So it's important that people get to know us. And in the process of getting to know us, they get more comfortable with our existing products and our future products. And we'll just be very steady But I was pleased with our first month results. But obviously, we need to get more. And we have to remember that a lot of the institutions that we're dealing with, they don't necessarily buy exclusively through the B3. So many of them get access to our European ETPs through offshore structured instruments and offshore buying. And so that might not show up on the B3, but we certainly – We certainly don't want to restrict how people decide to spend money on Velour or DeFi technology products. So we're just going to grow the business across the board.

Alan, did you have another question?

No, I don't know what that is.

You had your hand raised again. Let's see. Next question. Paul, I think I probably need your help with this. Please elaborate on what the next $150 million in AUM growth means to our bottom line and to our forward valuation of the company. Please also reiterate how swiftly a $150 million bump in AUM would mean since we are already profitable. And please outline our cash burn for the year.

Okay, thanks. So, yeah, for everybody, that's a great one. We have a ton of operating leverage in this business, okay? So, what operating leverage means is just our costs are relatively fixed. You know, last year, our operating general and fees and commissions were $40 million. We've told you we've targeted 36. On an annualized rate, we're at 38.7. And if we do $550 million of AUM and Stillman, we're positive. We're break-even to positive. So any additional AUM, it all flows to the bottom line. Assume 90%. There's a little bit of slippage on some extra fees and commissions for trading, maybe a little bit of SG&A to go with it, but we don't need to really roll out the team or add more bodies or rent more offices to manage another you know, a few hundred million dollars of money. Our existing infrastructure can do it. So, you know, put a 4.5% monetization on it, and I assume about 90% of it comes to the bottom line. Yeah.

And I think adding to that, as I think Paul discussed, Bitcoin – consisted of the higher allocation of our ATP makeup in Q1. Since we don't charge management fees on Bitcoin, that did decrease our monetization levels. But if we see alts run, which have much higher yield allocations, that will increase our monetization levels as well. So if we can continue to grow Solana, Cardano, XRP, and some of these longer tail alts, which offer higher yields, that will also help our monetization levels increase, just in case that wasn't clear. We agree. Thank you, Curtis. Another question, carbon monetization, any plan to accelerate the stock price? Again, I think if you listen to context, what we're talking about here, our current business model, looking to increase monetization where we can, new products, hopefully some help with the macro backdrop and Bitcoin and altcoin prices as well. And some other things that we haven't talked about at the moment. Again, typically in a bear market, crypto equities are hammered. But when we enter into a bull market, then crypto equities have consistently re-rated. And we are a crypto equity company. our primary business is a cyclical business. As of now, we are working on new fund products and structures that would be market agnostic, meaning they're not significantly impacted by the underlying crypto price movements. So that'll bring more stability to our AUM. That'll bring more stability to our revenue and ultimately more stability to our share price. Um, What do you think the biggest misconception to the market currently has about DeFi technologies? I think I have a lot of those. One of them, people think we're going to be delisted. We're not going to. People think we're a digital asset treasury company. We're not. We have two plus real operating businesses that produce real revenue. And we'll compound earnings year after year. I don't know if anybody from management wants to take a stab at that. Andrew, are you on? What are you hearing about misconceptions about the company, if you are?

Well, I think you hit the nail on the head. I guess I have a slightly different perspective. I think that the actual fundamentals of the platform and the company are quite strong. But the beauty of it is I don't have to just say that being optimistic. I can say it based on the money that we actually make. The reality is there will always be negative soothsayers. But at the end of the day, our focus is on keeping costs down, generating revenue, and being profitable. We had a war. We had spiking oil prices. We had absolutely everything bad happen. There had been currency fluctuations everywhere. macroeconomic factors, and we still made money. This is a platform that is being prepared for the future to be a real infrastructure company in the world of digital finance. I'll add something. Johan talked about custody. That custody represents more than just a service line. From an accounting perspective, it helps us minimize our costs without a doubt. We don't have to pay other people to store our digital assets. But from an infrastructure perspective, every time you see a news article that talks about an RWA, think Velour Custody. Every time you see a news article that talks about tokenization or securitization or stable coins, think Velour Custody. Because anything that lives on chain is going to need a quality custodian. And then the next thing is we are the predominant avenue for structuring instruments so that digital assets can get money from traditional capital markets. We're the best at that. Foundations come to us for that. Other institutional investors come to us knowing that we've done it for a long time. Johan, our CEO, created the world's first Bitcoin ETP back in May 2015. We just have to understand that, yeah, there's been macroeconomic volatility in Q1 2026. Well, we remember that in September 2025, when we're at 1.2 billion in AUM, if we had the infrastructure that we have now, our numbers, based on the improvements that we made, would be that much better. And we all know that the infrastructure and finance for tokenized assets, digital assets, It's just increasing. It's getting more and more. And we're going to be there to help it grow and to service that demand.

Thanks, Andrew. Do you all have any offering product plans to integrate into Tri-Fi institutions?

Well, yes. I mean, our funds, I think most of the institutions that would be consumers of our funds are actually the largest banks, the largest capital allocators that are looking for specific strategies to offer their private wealth management divisions or their proprietary trading desk. And then people have to remember, I think, people don't understand the power of film and digital. These prime brokerage OTC firms, are how these large institutions make bulk buys. This is why Stillman is growing, whether markets are good or not good. It's based on transaction fees, transaction volumes, and what they do is they enable large institutions, large holders of digital assets or stable coins to take bulk positions in and out with effectively predictable pricing. I'll leave the rest to Johan to elaborate.

Yeah, I can only agree with that for sure. I think all the new initiatives we're doing now are intended for institutional and traditional investors, but also for the traditional infrastructure in terms of banks, prime brokers, and so forth, from Stillman Services to these type of companies, to our funds, our usage funds, which all are instruments that they are used to to a service and product that they're used to use to uh utilizing and and uh to uh allocate into the new after closet crew so i think your whole new and not not to uh forget the um the custody side obviously that's the foundation for for building uh our integration with traditional finance and introducing new types of products from crypto to them in a form that they they can and will understand in in the way we will structure this so yeah i think we will covered everything i had in mind um yeah if i i didn't get your question

Let's see. Thanks, you guys, for the great call. I think it is less of a misunderstanding, but rather a historic change to the financial ecosystem. And DeFi technologies is on the inside line on the shift. I'm a grateful investor who knows that the path you want is the right one. You're a beacon to the industry, and I think there's a bright future for DeFi tech. You've made the right investments to fill in and fill over. Within the next cycle, we will see it's grown in returns and you're painting that great job. Oh, no question there. Thanks, Jason. Yeah, everything else in the chat has been basically effectively addressed. If you want something more specifically addressed, just email me, curtis at defi.tech. And thank you so much for your time today. Again, if there wasn't anything that you want addressed, please reach out, curtis.defri.tech or ir.defri.tech. And with that, we'll wrap up the call today. Thanks again, and see you guys on the next one. Thank you. Thanks.