Forum Markets, Incorporated

Hello and welcome to Forum Markets' fourth quarter and fiscal year 2025 earnings conference call. During today's discussion, all callers will be placed in a listen-only mode. Following management's prepared remarks, the call will be open for questions. This call is being recorded on March 31, 2026, and a replay will be made available on Forum's Investor Relations website later today. I will now turn the call over to John Kristof, Senior Vice President, Corporate Communications and Investor Relations.

Thank you, Catherine. Hello, and thank you all for joining Forum's fourth quarter and fiscal year 2025 financial results conference call. Joining me today on the call are McAndrew Rudisill, Chairman and Chief Executive Officer, and John Saunders, Chief Financial Officer. We hope you've had an opportunity to review our fourth quarter and fiscal year 2025 financial results issued earlier this morning. We've also posted an earnings presentation to our Investor Relations website. As a reminder, some of the matters we'll be discussing on this morning's call are forward-looking in nature. Please keep in mind that actual results could differ materially from what is expressed in these forward-looking statements. Forum assumes no obligation to update the information, and we encourage you to refer to our most recent filings with the SEC for a discussion of factors that could cause actual results to differ materially from these statements. During our call today, we may also reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of these non-GAAP measures to the corresponding GAAP measure can be found in our press release and presentation on our investor relations website. And with that, I'll turn the call over to McAndrew. Thank you, John, and good morning.

Thank you all for joining us. Since last year, we have executed against a single clear strategic objective, modernizing capital markets through the tokenization of institutional-grade real-world assets. Over the past several months, we've established the infrastructure, partnerships, and asset pipelines required to bring real-world credit on-chain, and we have done so with the discipline and speed that this opportunity demands. The opportunity in front of us is significant. The global market for tokenized real-world assets is projected to grow from approximately $20 billion today to $2 to $4 trillion by 2030, according to McKinsey. BlackRock, Franklin Templeton, and other leading asset managers have already moved tokenized portions of their portfolio, validating the infrastructure thesis we are building towards. The verticals we are targeting, including auto credit, residential lending, equipment finance, and commercial real estate, represent trillions of dollars of outstanding obligations, the vast majority of which remain untokenized and inaccessible to a broad investor base. These markets have historically relied on fragmented manual and batch processes for funding and distribution. These legacy processes result in higher fees, longer settlement times, and constrained access. We believe blockchain infrastructure can fundamentally improve that system by making settlement more efficient, more transparent, and more accessible. Our vision is to democratize access to institutional-grade high-yield products backed by real-world assets and delivered to investors on-chain. We are positioned at the very early stages of what we believe will be one of the most significant transformations in the history of capital markets. That economic model is central to how we think about building this business. We expect to create value through multiple complimentary channels. First, by generating revenue from yield on assets we acquire or finance prior to tokenization. Second, by earning economics from structuring and originating tokenized products. Third, by generating recurring revenue through managing these assets. And finally, over time, by benefiting from trading and market activity as secondary liquidity develops. This is a virtuous cycle that differentiates form and creates unique opportunities in the marketplace. We are applying TradFi processes while leveraging DeFi technology to democratize cash-generating assets to all investors. We are actively generating revenue from yield on our asset base today, and the tokenization we are perfecting will multiply the value of that model over time. That combination of immediate cash flow generation while building long-term scale is what makes Forum structurally different from a typical digital asset company. Since our last call, we have made substantial progress building the asset origination ecosystem that underpins our strategy. Our partnership with Arrow Engine Solutions and our strategic investments in Keras and Zippy are central to that effort. Because they give us access to asset pipelines, underwriting capabilities, and origination infrastructure across multiple categories of real-world credit. AeroEngine Solutions provides us with a strong pipeline of high-demand aircraft engines leased by some of the largest and most profitable airlines in the world, along with the asset management and aviation expertise underlying our aircraft engine token program. Keras brings AI-driven analytics and established relationships across the auto lending ecosystem, providing access to high-quality auto credit pipelines and underwriting infrastructure. Zippy provides a digital origination platform for manufactured housing finance, a segment we believe is significantly underserved and well-suited for tokenized credit products. Together, these relationships give us a scalable multi-category asset supply chain that we expect to be a durable competitive advantage as we grow the platform. Both Keras and Zippy are performing well within our expectations from an operational and investment perspective. Zippy is currently expanding from its initial build phase to a period of significant scale and margin expansion, expecting to double annual revenue and achieve EBITDA profitability by late 2026. Keras is prioritizing the optimization of its proprietary AI and machine learning models to enhance underwriting precision while rapidly expanding its network of lending platform customers and driving substantial originations growth. The company is in a steep growth trajectory, targeting over 50 million in monthly originations in the latter half of 2026 as it scales its enterprise platform and dealer network. Forum recently moved from RWA tokenization concept to actual execution with the launch in February of the EURUS Arrow Token 1 on liquidity.io. By structuring a product backed by contracted cash flows from jet engines on lease with a major US air carrier, we demonstrated our ability to bring real income producing assets on chain and offer it to qualified investors through a compliant institutional grade framework. That is exactly what we said we would do in our initial capital raise last summer and a few short months later, we did it. With that proof of concept established, our focus now turns to two clear priorities. expanding our menu of token offerings and building the distribution infrastructure to drive meaningful adoption at scale. I'll start with retail. On the retail side, liquidity.io serves as our primary distribution platform. Soon, we expect to begin ramping marketing for our tokens as liquidity.io grows their user base through expanded product offerings, including crypto trading and tokenized equities. We are actively working with their team to ensure Forum's tokenized products are prominently positioned with their user base as it grows. Institutional. On the institutional side, we are in discussions with a number of large financial institutions, family offices, and other private platforms that have expressed interest in accessing tokenized real-world credit products. We intend to establish direct distribution relationships as we bring additional token offerings to market across new asset categories. Institutional distribution channels will take time to develop, but we are working to build them deliberately and see a growing pipeline of interested counterparties. The successful launch of EURUS ERO Token 1 gives us both a proof point and a template. We know the infrastructure works. Now we scale it. As we build our distribution capabilities and partnerships, we continue to expand the asset base to support future tokenized products. Our acquisition of a manufactured and modular home loan portfolio provides direct ownership of a cashflow generating residential credit pool that we intend to use as a foundation for future tokenized products. Recently, the establishment of our auto loan warehouse facility added another important layer to the platform. That facility enables us to finance high quality, short duration auto receivables, support real-time settlement infrastructure, and generate about 12% yield on the entire pool of revolving loans in the warehouse. And that is before tokenization. This is an important distinction and serves as a key differentiator of our model. Our strategy is first to accumulate high quality income producing assets. Once those assets are on our balance sheet, they immediately begin generating yield, creating a revenue foundation that exists independent of tokenization timelines. Today, we anticipate all these activities to average a blended yield of approximately 10% before tokenization. Tokenization then adds a second layer of value, structuring and origination fees, capital recycling, and an expanding investor base. This creates a self-reinforcing flywheel that compounds over time. No Ethereum price exposure is required. No token price speculation is required. Just real assets generating real cash flows with tokenization as the scaling mechanism on top. We believe this is among the most differentiated business models in the digital asset space today. Our approach to capital allocation has evolved in lockstep with our strategy. This quarter validated our tokenization thesis, which represents Forum's highest return opportunity. Deploying capital into income, producing real world assets and bring them on chain to provide access to all. With that opportunity at hand, we have intentionally eliminated direct ETH price exposure on our balance sheet through ETH sales and derivative hedging of our remaining position. John will walk through the details, but the headline is this. We have repositioned our balance sheet from a passive digital asset treasury into an active yield generating operating platform. Form remains Ethereum first in our infrastructure and fully committed to the network as our segment layer, but we believe we will generate the strongest long-term returns for our shareholders by actively building on Ethereum rather than passively holding ETH. Let me be direct about our capital priorities. The pipeline of high-quality real-world assets available to us is growing faster than our current balance sheet can absorb. That is a good position to be in, and it reflects the quality of the origination network we have built. We expect to evaluate additional capital sources in 2026, and we approach that from a position of strength. Our future capital raise will be disciplined, purposeful, and structured to accelerate the revenue and cashflow growth of the platform. Looking ahead, we believe Form is a platform that is accelerating. In the near term, that means expanding the asset base and bringing additional tokenized products to market across multiple real-world asset categories. We are currently working on establishing two additional large high yield asset origination pipeline. One in AI data center equipment financing and the other in commercial real estate. We believe these will meaningfully expand our addressable opportunity. And as the RWA tokenization market matures, we expect to benefit from both the growth of assets under management on the platform and the expanding set of investors seeking access to tokenized yield generating products. We are early and we are exactly where we intended to be. In less than a year, we have built the infrastructure for our platform, proven our technology and thesis, established partnerships to expand the platform, and generated revenue from yield. As capital markets shift from traditional to blockchain-based systems, we believe the ultimate winners will be those that build and scale the optimal platforms first. Our strategy positions form to be one of those platforms. Thank you again for joining us today. We appreciate your interest in Forum and look forward to updating you on our continued progress. And with that, I'll turn it over to John.